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Below you will find answers to some of the most common questions we receive about fractional property ownership and the Cahootz platform.
Cahootz is an online platform that allows investors to purchase fractional ownership in UK residential properties, making property investment more accessible and affordable. Eligible investors buy fractions in individual properties, earn income from rent, and any capital appreciation that may occur over the period in which they hold the fractions. Cahootz takes care of all the operating responsibilities.
Once you are registered on the platform, and passed the investment appropriateness test, you will be able to invest in fractions of residential buy to let property. These fractions entitle you to receive the proportional amount of rental income and capital value derived from the specific property in question. Through your account dashboard you will see all the relevant information regarding the property including the running costs, maintenance, and tenancy performance. Cahootz looks after all of this and provides you with a clear view of exactly what is going on with your property at any given time.
A fraction is one ordinary share in an SPV (Limited Company) that owns 100% of a specific property.
Whilst you can sell your fractions privately at any time, we also offer the ability to re-list your fractions via Cahootz every three years.
At that point, the property will have been independently valued and you will have the option to re-list your fractions for sale should you so wish to exit. If you decide to list the fractions, the following order of events will take place:
When you invest through Cahootz, your investment in property is made through a UK Limited Company called a Special Purpose Vehicle (“SPV”), which is established specifically for purchasing and holding the property. You own ordinary shares in the SPV that holds legal title to the property you have invested in.
There are no restrictions on the number of properties you can invest in through the platform.
You decide when you want to sell your fractions, however, Cahootz does not offer a secondary market. In addition, property should be viewed as a long-term investment, in particular during the first few years where it is necessary for the recovery of transaction expenses such as stamp duty and legal fees.
Rental income is distributed to investors in the form of dividends from the SPV that owns the property. These dividends are net of operating costs of running the property and corporate tax payable by the SPV.
Fractional investing is the process of investing in shares in a limited company which holds the legal title to a specific property. This shareholding entitles the owner to a proportional economic interest in the company such as rental income and any capital appreciation. Holding shares does not entitle the owner to live in the property or use the property for personal use.
The minimum initial amount you can invest is £5,000. Once you have invested this minimum initial amount, you are then free to purchase single fractions across properties.
To get started with Cahootz, investors must first create an account on the platform, confirm your investor categorisation and complete the client appropriateness questionnaire (a short set of questions with multiple choice answers designed to give us comfort that you understand the nature of the buy to let property investment, illiquidity and market risks of such and investment). There will then be a 24-hour cooling off period which you can use to browse properties and decide what could be interesting for you. Following this 24-hour period, investors can purchase fractions through their account subject to completing the necessary electronic identity verification checks.
To be eligible investors must be able to self-certify as either high net worth, sophisticated or restricted in accordance with the Financial Conduct Authority’s rules.
Cahootz does not provide tax advice to investors, and it is the investor's responsibility to report and pay any applicable taxes on their earnings.
Cahootz provides regular updates on the properties through the investor dashboard, and investors can also stay informed about the property market through industry publications and news sources.
Investing in property, like any investment, comes with risks, including the risk of market fluctuations and of property values decreasing. Cahootz also cannot guarantee that there will always be a buyer for fractions when investors want to sell. You are investing in property and as such you are exposed to all the risks that exist with respect to owning property. For example, vacancy periods where no rent will be paid or property prices falling for a period and therefore impacting the value of the property and therefore your fraction value. In addition, the property market is not a liquid market. Therefore, when it comes to selling your fraction, it may take some time to find a buyer. Also, it is important that you bear in mind the minimum initial lock in-period of 3 years. You will not be able to try and sell your fractions and get your money back during the first 3 years.
You cannot get your money back for 3 years. On the 3rd anniversary of your purchase, you will be given the opportunity to list your fractions for sale should you so want to liquidate your investment.
You have 14-days from when you have made the commitment to invest in the fractions to request your money back.
No. The value of your investment, at any point in time, is derived from the underlying property in the SPV.
No. As part of the fraction purchase price we have included an amount that will be kept in the contingency cash account of the SPV. This will be kept at close to six months’ rent and will be used to cover unforeseen circumstances. At the end of every twelve-month period, we will re-evaluate the cash reserve amount and top up, if necessary, from the rental proceeds.
Cahootz is initially offering newly built London apartments on the platform. However, our intention is to expand this offering over the coming months and years.
Cahootz cannot advise you on which properties to invest in. This is something you should take financial and investment advice on from your own financial advisor.
Cahootz will arrange for regular property valuations which will be displayed through your dashboard account on the platform. This will also show you a clear record of rental income paid and the performance of the property valuation.
Yes. You must complete a questionnaire and self-certification process before we can open an account for you on the platform.
The Cahootz property manager together with the appointed local lettings agent will be doing everything possible to find new quality tenants for the property as quickly as possible. During the vacancy period, all maintenance and running expenses will be covered from the vacancy and contingency cash accounts in the SPV.
No. Each property investment is structured so they continue to operate even in the event that Cahootz is no longer operating. Each property is ring fenced in its own SPV and separate ownership structure.
Gross rental income paid by the tenants into the property SPV account is used to fund the running, maintenance, taxes and insurance, Cahootz platform fee, local letting agent’s fee, contingency top up, refurbishment fund and service of the property. Once the monthly costs, contingencies and corporate taxes are accounted for the net rental amount is paid out in the form of dividends to the relevant fractional investors.
We are currently paying dividends out on a quarterly basis.
Cahootz adds a one-off commission fee of 3% of the property purchase price to the cost of your fractions at the outset. We then charge an annual platform fee of 3% of the gross rent received which covers our cost of running the platform and maintaining the platform. We do not charge any platform fee while the property is vacant. And we do not charge a fee to you upon the sale of your fraction.
Your Cahootz property manager will arrange for the best and most cost-effective local agent to let and manage the day to day running of the property. These costs are clearly displayed in your property dashboard view.
When you invest in fractions through the Cahootz platform, you are buying an ordinary share in an SPV that owns a single property. For instance, if you purchase 2% of the shares in the SPV, you would then be entitled to 2% of the economic interests of the property owned by the SPV, which may include income from rent and or property value appreciation.
Once you have answered the questionnaire, self certified under an investor category, and set up your account, we carry out an electronic identity verification process. This is an essential part of our due diligence process, and is something that’s required by the Financial Conduct Authority (FCA) for all customers.
An SPV stands for Special Purpose Vehicle. In the case of Cahootz, the SPV will be a UK limited company that will be established for the sole purpose of holding your property.
There are several costs that need to be added on to the list price of any property purchase including but not limited to, stamp duty, legal fees and in our case the Cahootz fee and contingency cash amount. The fraction price includes a proportional amount of these costs on top of the list price of the property.
No. Cahootz will manage all tenant interactions and will report these via your dashboard on the platform.
Cahootz will subcontract the management, lettings and maintenance to local agents and service providers for each individual property in question.
The Cahootz property manager works closely with the local appointed lettings and management agency to ensure care and maintenance is provided to the property on an ongoing basis.
As with all property purchases, Stamp Duty Land Tax (SDLT) is an amount payable to HM Revenue and Customs on the purchase of property or land in the UK. It is subject to change; for the most up-to-date information please refer to the UK Government guidance. When you purchase property through a Limited Company there is an additional 3% SDLT (the SDLT surcharge) due. On the sale of your shares in the SPV stamp duty will be payable at 0.5% of the consideration payable by the purchaser.
No. The Cahootz property manager through the appointed local agent will arrange for appropriate tenants to rent the apartment.
Our data hosting services are provided by Amazon Web Services (AWS) located in Ireland, and we employ technical measures to safeguard your data. However, we must acknowledge that transmitting information over the internet can be vulnerable to security breaches. Despite our best efforts to protect your personal data, we cannot guarantee the security of any data transmission to our website. This risk increases if you access the internet through an unsecured network. Once we receive your information, we take stringent measures and employ security features to prevent unauthorised access. We also encourage all users to enable two factor authentication of their account from their account settings to further provide additional security.
No, each investor is limited to one account on Cahootz. This is to prevent fraud and ensure compliance with regulatory requirements.
Cahootz is a web-based platform and is compatible with most modern devices and browsers. However, for the best experience, it is recommended to use the latest versions of Google Chrome, Mozilla Firefox, or Safari.
If you experience technical issues with the Cahootz platform, you can contact Cahootz customer support for assistance. They may ask you to provide additional information about the issue, such as screenshots or error messages, to help diagnose and resolve the problem.