Key Risks

plotify investments

By investing in a Plot, you are taking on many of the risks and potential returns associated with direct property ownership, including changes in the capital value of the property which can go down as well as up, and variable profitability due to either lower than projected rental income, or higher than projected costs.  Additionally some risks are introduced, as by investing indirectly in the shares of the SPV you forgo  control over day-to-day operation of the property.

The information on this website/App does not constitute an offer to sell securities or a solicitation of an offer to buy securities. Further, none of the information contained on this website/App is a recommendation to invest in any securities. Past performance is no guarantee of future results. Any historical returns, expected returns or probability projections may not reflect actual future performance. All investments involve risk and may result in loss.

The following information relates to investments by UK investors in UK assets only.  These do not apply to investors or investments in other jurisdictions, for whom separate conditions and disclosures will apply.  In particular, details concerning the nature of US investments will only be made available to clients who have successfully completed Plotify’s onboarding process and fully satisfied all US regulatory conditions.

High risk

The investment can be considered to be high risk. Property investing is subject to various risks which may impact the expected returns of the investors. Any investment should only be made as part of a diversified portfolio and any investor needs to be in the position to lose part or all of the capital invested.

Loss of capital

Investing in property is a long term investment. The value of your Plotify investments can go down as well as up.  Past performance of similar investments is not a guide to future performance of Plotify investments.  The value of your investment may decline for a number of reasons including a fall in the value of the property, or a reduction in ongoing profitability.  You may lose your entire investment if you need to exit the investment whilst property values have fallen to significantly below their value at the time of your investment.

LiquiditY

Plotify provides you with the facility to list your Plot as available for sale on its platform and to set a price you will accept, subject to the conditions set out in the agreement entered into when you join Plotify. There is no guarantee that a buyer will be available for a Plot at the price you set or at any price.  You will continue to receive any attributable distributions whilst your plot is listed for sale.

Variable income and management of exceptional cost items

Plotify investments provide a periodic income which each SPV distributes as a dividend to the current shareholder.  Payment of a dividend depends on the SPV making a profit for that period, based on achieved rental income and net of operating costs and all applicable taxes.

Plotify applies an average charge to all SPVs to cover exceptional items, such as unexpected repairs, voids, arrears or capital works. This means the costs and income for each SPV are predictable assuming that the total costs across all SPVs do not exceed the amounts that Plotify has estimated. Over time, Plotify will review the average charges in light of actual historical costs, and may increase (or decrease) the average charge.  For example, this could be caused by an uninsured loss against a property, a change in tax legislation, or higher than forecast cost inflation. Additionally, rental values in an area could fall meaning lower rental income for an SPV.  

Either increased costs or reduced income would reduce the profitability of the SPV, and reduce the amount of the dividend.  In the event that the SPV does not make a profit in a given period then no dividend would be payable.

Diversification

Investments should only be made via Plotify as part of a diversified portfolio.  Splitting your investable assets into relatively small proportions, invested across a number of different asset classes will help spread your risk.  The majority of your portfolio should be invested in safer, liquid assets so that you can access your capital more easily.

Day-to-day control

Investing in Plotify is an investment in the shares of a property owning company (the SPV).  Whilst you are entitled to the beneficial interest in the company and its assets, you do not have the same day-to-day control that you would have if you acquired a property directly.  You will be given the opportunity to review, and confirm your understanding of the agreements each SPV holds for management services prior to making any investment.

Economic environmenT

Changes in general economic and market conditions including, for example, interest rates, rates of inflation, industry conditions, competition, political events and trends, tax laws, national and international conflicts and other factors could substantially and adversely affect the value of the asset.

Economic conditions

Global market uncertainty and economic conditions in the United Kingdom and elsewhere, and in particular the restricted availability of credit, may reduce the value of the asset once it has been acquired.

Currency risk

It is important for property investors to understand the risks associated with acquiring offshore assets. This is a form of risk that arises from the change in price of one currency against another. Your investment might decrease in value even though the underlying asset has not decreased in value.

Use of debt

The use of debt introduces the risk of default, which means that creditors may have the right to repossess the property in the event that debt payments were materially in arrears. In this case, the investor may lose all funds invested. Plotify will however make debt payments on behalf of SPVs where there are voids or arrears in rental income. If issues persist with the property Plotify is able to undertake a sequence of remedial steps, including but not limited to refinancing of the debt, and making a re-purchase offer to the client for the investment.  The details of these arrangements for a specific SPV and the related debt are set out in the contract documentation which you’ll need to confirm acceptance of at point of investment.

Tax

You remain responsible for your own tax affairs and the assessment of any tax liabilities you may incur as a result of your investments with Plotify.  This may include, but is not limited to taxation of income and of changes in the value of the investment. Plotify does not provide tax advice and you should seek qualified independent advice before investment if you are unsure of your tax position. It is your responsibility to ensure that your personal tax filings are correct and submitted in a timely manner and any tax due is paid accordingly. Tax legislation affecting your investment may change in future.

Regulatory & compliance risks

The regulation that applies to investments with Plotify and the associated compliance obligations may change and adversely affect the value and / or the profitability of the investment. This could include, but is not limited to changes to the eligibility to participate in the investments, the tax regime for investors, the tax regime relating to the business of an SPV, and changes impacting the Plot structure.

APPLICABILITY

SECURITIES DISCLOSURE