Property Moose

Our fees are as follows:

1. A 5% upfront fundraising fee. This is zero rated for VAT purposes and is taken with full transparency from the overall fund required. For example, on a £100,000 raise (£99k property and £1k costs), we raise £105,000 with £5,000 being our fee. This helps to cover our costs in structuring the deal and our ongoing platform and compliance costs. We don't make any money from this 5%.

2. We outsource the rental management of properties to local partners as they are the experts and can get the properties let quickly and for the optimum rent. We charge 10% of gross rent (plus VAT) for management fees which is used to pay these local agents.

3. We budget/predict for a range of other costs. For example we budget a standard 1.5% plus VAT estate agent's charge when the property is sold. If, in fact, we get a better deal, the savings are passed back to our investors . For example, we recently finished a renovation where we had been quoted a fixed fee for the work. The final price came in £200 below budget and the savings will be paid back to the investors as a return of capital with their first rental payment.

I note that the T&Cs states that rental fees are 12.5% plus VAT. This is out of date as we reduced the rental fees recently which you can see on the finance tab of each property. Thank you for pointing this out - it will be fixed on Monday.

3. Finally, we make our profit at the end of the investment terms through a share in the net rise in property value ('profit'). We take 15% of the net profit after deducting any sale costs but before any corporation tax in the SPV. This is due to the fact the 15% profit fee is contractual so is an allowable deduction for corporation tax purposes - reducing the amount of tax payable in the SPV. The fee is zero rated for VAT purposes too. As an example, if the property makes £10,000 profit and there are £2,000 of costs, our fee would be 15% of £8,000 leaving £6,800 subject to corporation tax giving £5,440 to the investors. You can see this calculation on the finance tab of each investment and more on the process here - goo.gl/s3ZGx7

It is worth mentioning that we also pay 3% interest (p.a.) on any investment in a property. So, if you invested £5,000 in a property that was brand new on the site, we would pay you 3% gross interest on the £5,000, calculated daily, from the 3rd day after your investment (when we receive the money in our account) until the day we complete the purchase of the property (not when it is fully funded). This is designed to give investors a return from day 1, encourage people to invest in properties early on and ensure that we are incentivised to get properties completed as quickly and efficiently as possible. We currently have two properties open for funding with a two year investment time-scale, and a pipeline of further opportunities, some of which will have longer time-scales, to follow.