Our fees are charged differently to every other Australian syndicator we know. Fees are broken into:
Establishment Fee (on acquisition): 3.50% of Purchase Price
Annual Asset Management Fee: 15% of Net Trust Income
Success Fee (on sale): 25% of any Net Capital Gain
Properties & Pathways’ managing director Cal Doggett explains our fees in detail in the below video:
Why are our fees charged this way?
Our fees are charged differently to most syndicators. Fees are not aligned to the property value, but aligned to the property manager – us.
This makes us accountable for every decision we make. And transparent in everything we do.
The 3.50% Establishment Fee is calculated on the property’s purchase price. This covers compliance costs to establish the Syndicate.
Rather than taking the Establishment Fee from the rental income or from the property value, we deduct the fee from the total capital we raise. This means our investors know what return they’ll receive upfront, with no unexpected charges to erode their cash flow.
Annual Asset Management Fee
The Annual Asset Management Fee is derived from the residual Net income of the trust, after deducting:
- Mortgage interest repayments
- Capital expenditure of the trust (if any)
- Leasing fees to independent agents (if any)
- Fees for independent consultants (if any)
Experienced investors will be used to seeing this fee charged on the trust’s property value. Instead, we charge our management fee on the trust’s net income.
Why is this an important difference?
Well, charging a management fee on the value of the property sounds acceptable. But what happens if the property is vacant? There’s no rent coming in the door, but you’re still charged a management fee.
We don’t believe in that structure. We want to be on the line with the return our investors see. So, we charge a management fee on the net income of the trust.
If we save a percentage point on the bank’s interest, that’s less money paid to the bank and more money for the syndicate. Much the same if we reduce our capital expenditure, increase the rental profile, or take advantage of initiatives (like renting solar panels to our tenants), that’s more money in our pockets.
We’re responsible for every single decision to maintain the property value and rental profile. This keeps us transparent and pushes us to find the best possible outcomes.
The Success Fee is a 25% fee on the net capital gain from the sale of the property.
Why do we charge this?
Quite simply, any value that we create for you on your investor journey, we want a part of. That’s where we bring our expertise to the table.
Take a look at our investment archives. Every total return we’ve made on the sale of an asset is net of all fees, commissions, break costs… We factor this into our investment modelling, so we can focus on exceeding your expectations.
Our fees are tied to our performance. Not your investment capital.
For more information on investing alongside us, get in touch with us today.