Return on Investment

Where an individual investor could purchase one apartment in Germany for €140,000 with a rental yield of 5.5% and with a 60% mortgage, Propfund Germany would bring all these investors together to purchase the entire building resulting in the same apartment being purchased for €100,000 with a rental yield of 8% with an 80% mortgage.

With this model Propfund investors make a lot more money with little or no involvement compared to investing privately themselves.

 Strategy is based upon acquiring off-market small to medium sized rental portfolios of, an average, 30 properties in one building. 

Each property needs to generate a cash surplus each year equivalent to 7% of the private equity which was required to purchase the property. In order to achieve this, Propfund has to acquire properties which are already generating an average of a 8% rental yield. Annual dividends are generated from surplus rent, leftover after all operation and finance costs. Propfund does not rely on capital appreciation and speculation, but generates returns using surplus rents generated from the strong rental market in Germany. 

Explanatory Notes for Illustration Above

• Equity invested: Invest from 30,000eur.
• Investment period: 10 years. Early exit options available.
• Total Annual Payments (70%): Cash surplus generated each year from the rental income, assumes 10 years at 7% per annum.
• Profit on year 10 (100%): Proceeds from the sale of the portfolio in year 11 will be returned to the Investors. Estimated profit- 100% of the initial equity invested.
• Total profit over 10 years (170%): Combined profir including annual dividend (70%) and the proceeds from the sale of the Portfolio (100%).
• Total returns over 10 years (270%): Combined profit including initial equity invested in the fund.

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