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How are dividend amounts determined for individual properties?
How are dividend amounts determined for individual properties?
Korin Hedlund avatar
Written by Korin Hedlund
Updated over a week ago

Properties start paying monthly dividends once they're generating income. Dividend payments represent the cash flow after expenses and reserves. Each monthly dividend may vary month to month and is determined by analyzing several factors, including rental status, the amount of cash in the property's reserves, last quarter's cash flow, projected expenses, and lease renewal timing.

Each property holds a cash reserve balance, which covers planned and unplanned operating expenses such as property tax, home insurance, repairs and maintenance, and vacancy costs. If the cash reserve balance decreases, it is replenished with rental income.

Below are the guidelines we follow to increase, maintain, or decrease the property dividends over time. These guidelines are directional and help us make informed decisions regarding the dividends of the property. We strive to ensure that these guidelines are followed consistently to maintain the overall fairness and equity of the process.

Possible reasons why property dividends are increased:

  • When a property exceeds its initial cash reserve

  • When a property is leased at a higher-than-expected monthly rent

  • When a property signs a second lease at an increased annual rate

  • When a vacation rental exceeds expectations or has ample cash reserves during high season

Possible reasons why property dividends are lowered or paused:

  • When a property's cash reserve falls below the initial amount, dividends are lowered until the reserve is replenished

  • When a property is leased at a lower-than-expected monthly rent

  • When a property is not currently generating income, either through extended vacancy or an issue with an eviction or unlawful tenant

  • When a property has long-running issues like a major expense or a major repair that is needed

  • Vacation rentals that are not yet booking-ready or not currently accepting bookings due to being taken off-line

  • Vacation rentals that are either performing under expectations or are going through the low season and are seeing reduced revenue

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