When you invest in a property, there are additional costs included, like transaction fees, broker fees, and funds set aside for things that improve the property over time (such as refurbishing, furnishing, and service charges). These costs are "amortised," which means we spread them out over time rather than applying them all at once to the value of the stake.

For the first year, the costs aren’t included in the value of the stake. But after one year, we start amortizing them gradually. We begin by applying 20% of the costs once the valuation after 1 year of holding has been completed. Then we apply 10% of the costs every six months (each after every subsequent valuation).

With each revaluation of the property (done twice a year), we update your investment value based on both the property's appreciation and the portion of amortized costs. Occasionally, if property appreciation is low, these amortized costs may outweigh the growth, causing the investment value to appear negative. This is temporary and balances out over the longer term as the property appreciates more.

How does this benefit me?

If you decide to exit early, the unamortized portion of these costs will be taken on by the new buyer. This means that your sale price will be closer to the actual exit amount, as the costs are fairly distributed.

While it may look unfavorable at times, this process helps us balance the costs fairly over time. As the property appreciates more over the long term, you should see your investment value align more closely with expected returns.