What We Do
What does Property Monster do?
Property Monster is a real estate crowd investing platform, which allows investors to collaborate and invest on individual property assets, diversify their portfolio and manage their market exposure at the click of a button.
What are the different types of investment opportunities?
On Property Monster you have a choice between New Listing (primary market) and Subsale (secondary market) investment opportunities.
“New Listing” opportunities are properties that we have negotiated an option to purchase at an agreed price. The funds to purchase these properties are live funded on our platform within a specified time period.
New Listing opportunities are presented on the platform along with a Surveyor’s valuation and solicitor’s conveyancing report and forecast rental information.
When you commit funds to a “New Listing”, your Property Monster account balance will decrease but no money will actually leave the monies to an account until the live funding target is reached.
Property Monster will obviously not charge or receive any fees and any costs that have been incurred (for example, surveyors and solicitors) will be borne solely by Property Monster.
All “New Listings” are available in “Pre-Order” mode for a set period of time before our live funding process.
You can study the information in your own time and won’t miss the opportunity to invest. You will also be able to see the pre-order closing date in each property page.
So long as you invest in the Pre-order period you will not miss out on the chance to invest, but to accommodate everyone fairly we may need to scale-back orders if they exceed the Funding Target for a New Listing (see below).
What is scale-back?
Scale-back may be applied if pre-orders are oversubscribed. When investor commitments exceed the Total Investment Required in a New Listing, your commitment may be reduced on a pro-rata basis. For example, if the funding target is RM1,000,000 but we received pre-orders amounting to RM1,200,000 (excluding fees) then you would receive 75% of your initial order (in this scenario 90% of shares, equivalent of RM900,000, are available for Pre-orders and 10% for live funding).
“Subsale” opportunities appear on the platform when another Property Monster investor chooses to sell their investment.
The selling investor can choose the price in which they offer their shares for sale, but we will provide information to help both potential buyers and sellers to perform diligence, and determine whether they wish to buy or sell at a given price.
In addition, we provide an updated estimate of the valuation of each property half yearly. We update the valuations on or about the 5th of June and December. A comprehensive Surveyor’s physical inspection and valuation is completed every five years in connection with the 5-year exit protection plan.
However, ultimately it is your decision what price to buy or sell it. Our estimated valuations do not constitute, and should not be considered investment advice.
How are the investments structured?
Your investment in property on the platform is made via the purchase of shares in a Malaysian Limited Company, established specifically for purchasing that individual property.
Special purpose vehicle (SPV)
Each property listed on Property Monster will be owned by a special purpose vehicle (“SPV”), which is a Malaysian Limited Company. There is a different SPV for each and every property; therefore you will always know that you are investing in a specific property chosen by you.
Is there an ownership cap per SPV?
The maximum number of shares that you can purchase in any property is 200,000 which is equivalent to 20% of the SPV. The cap on percentage ownership is to ensure no individual owns a beneficial interest greater than 20%.
Your shares are held under a nominee arrangement, with the nominee being the legal shareholder of the relevant SPV. The nominee holds those shares on your behalf and you will be entitled to all the economic benefits as the ultimate beneficial owner. The nominee is a Malaysian Limited Company wholly owned by Property Monster. The purpose of this arrangement is to facilitate the electronic transfer of shares and for ease of administering operations as set out in the management contract.
Property purchase costs
As with buying property directly, purchase costs such as stamp duty, solicitor’s fees and survey costs are incurred. These costs are funded by the amounts raised from investors and shown on the platform before you make an investment. We amortize these costs over 5 years, which means we spread the costs over that period. We include the unamortized amount within the estimated valuation of investments i.e. the shares in property SPVs.
Standard investment documents
At the point of investment, you will be required to enter a set of investment documents. These are the standard form for each investment and sample documents can be accessed on the platform.
Why do we undertake customer identity verification?
After a customer sets up a Property Monster account, we complete an identity verification check. This is an essential part of our due diligence process.
In the event that we are unable to complete the identity verification check electronically, we may ask that you provide two identity documents that have been certified by an independent professional. Whilst we appreciate that this is can be an inconvenience, our objective and intention is ultimately a benefit that protects both our customers and ourselves.
How we select properties
Our Property team searches for property differently to the average buyer, focusing on properties that will give the best returns. We provide two types of insight: The Economic Perspective, and The Property Perspective.
The Economic Perspective
Historically, the majority of real estate returns have been delivered through capital appreciation. However, we look to balance income and capital returns when we choose our properties, to maximize the ‘total returns’ that this combination can bring to our investors over time.
The Property Perspective
When selecting properties, we focus on investment themes that we see as growth opportunities.
We will use our knowledge and buy power to engage with more complex purchases, such as those with complicated legal situations.
We also seek ‘wholesale’ discounts, through the purchase of entire blocks. Additional advantages come with such transactions, including enhanced yields and greater stability of income.
Who takes care of the letting and management?
When you buy a share in a property (through an SPV), you never need to worry about letting or management of properties. Brickvestor takes care of this on behalf of the investors.
The SPV which acquires the relevant property enters into a management agreement with Property Monster, which in turn delegates all property management decision-making and authority to a letting and management agent.
To facilitate this, we charge 10% (+6% GST if applicable) per annum of Gross Rent, which includes both advertising and managing the property but excludes certain costs such as maintenance.
How do I earn an income?
You beneficially own a portion of the individual property via a specific Malaysian Limited Company, (the SPV). You will receive a share of the Dividends from the SPV every month, in direct proportion to your ownership of the SPV that owns the property.
The Dividends available to property investors are calculated as the Gross Rent collected from tenants, minus property-related costs including purchase costs, furnishings, remedial cosmetic works, forecast maintenance, annual voids, corporate taxation, and all fees.
Under no circumstances will you be required to contribute further capital, e.g. during vacant periods or to cover defaults.
Estimates of future Dividends will be provided to you prior to you making an investment. These estimates are based on consultation with third parties, such as local estate agents and surveyors. We then apply estimates for void periods, on-going maintenance, and any other costs. Our estimates are available for review as part of the investment process. However, it is important to note that this information is based on estimates and Property Monster does not provide investment advice in this regard. It may be that lower Gross Rents are secured and/or higher costs incurred. See also Key Risks
How do I calculate my monthly income?
Every property has a different projected dividend yield and every property has different opportunities for capital growth as well.
As an example, If you invested RM10,000 in a property on the platform with an estimated dividend yield of 4.05%, you would expect to receive RM405 per year in dividends (i.e. RM10,000 x 4.05%). This would mean an estimated income of RM33.75 a month, which would be paid directly into your Brickvestor account. You are free to then reinvest or withdraw those funds.
Any capital gains would be in addition to this dividend yield. The combination of income, capital gains and our charges would give you a total return.
Each property page has a Calculator to help you calculate your total returns based on different scenarios.
When will Dividends be paid?
Your share of Dividends will start accruing from the date the property is purchased, or a later date if specified in the property description. Dividends for any given month will be paid on the 5th of following month, directly into your Property Monster account. If the 5th of the month falls on the weekend or a bank holiday, dividends will be paid on the next business day.
The first payment will typically follow the first full month from purchase – for example, if a property is purchased on 15th December, the first disbursement will be on 5th February for the period 15th December to 31st January.
In addition, we provide an updated estimate of the valuation of each property half yearly and we update the valuations on or about the 5th of June and December so that you can monitor any capital returns. You can view all this on your dashboard.
Where do I find my monthly returns?
We email you once the property you have invested in has successfully been funded. You will then receive a monthly email with a breakdown of dividends received for the property(s) you have invested in.
You can also view your ‘current investments’ tab and see any dividends received.
Will I need to put in the further capital?
No, investors will not have to contribute further capital. All costs including bills and fees are funded from the Gross Rent. The risk of most large unexpected costs, such as flood or fire, is mitigated through property insurance.
If further information relating to costs becomes available later, we will communicate this clearly via our website so that all Investors (current and prospective) are aware.
It is possible that a cost is incurred that is larger than Gross Rent, and may be unexpected and also uninsured. In such a scenario Property Monster reserves the right to take out a loan which is secured against the property, to fund the expenditure. That loan is repaid from Gross Rent, and this will impact the investors’ returns accordingly. If this situation were to occur, the matter would be communicated clearly to existing and prospective investors alike in a clear, fair and transparent manner.
Exit and Capital Return
How do I exit my investment?
Capital appreciation or depreciation (see Key Risks) is realised when you exit your investment. There are two principle ways to exit:
Offer your investment for sale via Property Monster’s platform
You can do this at any point. You can choose the price at which you offer your investment for sale. Your investment is then listed as a Subsale opportunity to other investors.
We provide you and prospective purchasers of your investment with an estimated valuation (on a per share basis) which is updated half yearly.
However, ultimately it is your decision what price to buy or sell at, our estimated valuations do not constitute, and should not be considered investment advice.
Depending on the price you are offering your investment for sale, the opportunity may or may not appear attractive to prospective buyers (and therefore may or may not sell). You can adjust the price to make it more attractive to buyers. However, there is no guarantee that anyone will be willing to buy your investment from you, whatever the price. In this scenario, your opportunity to exit is limited to (2) below.
Exit after five years at market value
On each fifth anniversary of the completion of the transaction on the platform, each investor in the property has an opportunity to sell their holdings at fair market value. This process is outlined as follows:
- The property is inspected and valued by an independent Surveyor with reference to factors such as recent transactions and the condition of the property, adjusted for any potential liabilities that the SPV may have, such as taxation. This is then divided by the number of shares the SPV has issued (1,000,000 in each case) to create a per share market value.
- Investors that would like to exit at this point will be aggregated into a block which will be relisted on the Property Monster platform at the per share market value for up to 4 weeks. This process is similar to the initial fundraising of a New Listing.
If this process is unsuccessful for whatever reason, Property Monster will commence proceedings to sell the underlying property. The property will be advertised for sale on the open market at the valuation determined by the Surveyor. Property Monster will administer this process and is obliged to act in the interests of investors to maximise financial return. On successful completion of the sale, all Investors in that property will be exited and net proceeds will be distributed to investors. Note that third-party costs, such as legal fees, will reduce the proceeds available for distribution to investors.
It should be noted that if the underlying property is sold, this process will take as long as required and typically the sales process is between 3-4 months. However, there is no guarantee of this as the sale could take longer.
Are there any fees when buying or selling on the ‘Subsale’ market?
When purchasing shares on the ‘Subsale’ market a 2% fee applies, same as with our New Listings properties. There are no fees for successfully selling shares.
When you purchase shares on the ‘Subsale’ market you are automatically offered the cheapest shares first until the number of shares proportionate to how much you want to invest has been purchased.
What is ‘premium on purchase’?
The Premium/Discount on Purchase is the percentage difference between the amount paid for a ‘Subsale’ investment and its Latest Valuation at the time of purchase. It is positive (a ‘premium’) when the amount paid is greater than the Latest Valuation at the time of purchase and negative (a ‘discount’) when the amount paid is lower.
For example, if you purchased a ‘Subsale’ investment for RM10,500 (share price of RM1.05) but the Latest Valuation of the shares acquired was RM10,000 (share price of RM1.00), then the Premium paid would be 5%.
Can I delist my shares from the ‘Subsale’ ’ market?
Yes, the shares you have offered for sale can be delisted, adjusted and relisted at anytime up until the point another customer opts to buy them i.e. if you list them and someone accepts that price and acquires the shares the transaction is complete and you cannot unwind that transaction – however you can delist or adjust any time up until that occurs.
Do I still earn a monthly income when I list my shares for sale on the ‘Subsale’ market?
You will still receive monthly dividends for the shares you have listed for sale as long as you still own them on the 5th of the month when the rent dispersal is paid.
The funding target of a New Listing, which forms the basis for the share price, consists of:
- The property’s purchase price. (see the definition below)
- Plus all third-party purchase costs and additional funds required for furnishings and repairs.
The purchase price for a New Listing is the price paid to acquire the property, which in turn is supported by a Surveyor’s physical inspection and valuation.
The Latest Valuation is the estimated valuation of the SPV (all the shares combined) that holds the property.
The Latest Valuation of the shares is updated when the property is initially made available on the Subsale market. Valuations reflect:
- The change in property value (i.e. the Latest Property Value), if any
- The amortization of purchase costs
- A change in the deferred tax provision, if any
Valuation updates are published on or about the 5th of June and December. If the 5th falls on a weekend or a bank holiday, then the valuation updates will be published on the next business day.
Every five years we arrange a Surveyor’s physical inspection and valuation process to provide a further update on valuation. This valuation is the basis for the five-yearly exit process. You can find further information on the 5 yearly exit protection plan here.
Amortization of Purchase Costs
Purchase costs are amortized (depreciated) over the period to the first five year anniversary of the property’s listing on our site. This means we spread the cost over five years, gradually reducing the total purchase costs over that period in equal monthly amounts. For example, if total purchase costs were RM6,000, this amount would reduce by RM100 each month until the ‘five year anniversary’ at which point the outstanding balance would be zero.
Purchase costs include Stamp Duty Land Tax, third-party professional fees (including any brokerage fees), pre-letting expenses (including furnishing), and other third-party costs relating to the purchase of a property. These purchase costs are unavoidable and are incurred by all individuals and companies that acquire buy-to-let properties.
Should the property value increase, corporation tax be payable on the gain on disposal? This is because all properties listed on a Property Monster reacquired through a Special Purpose Vehicle (SPV), which is a Malaysian limited company. This future corporation tax liability is recognized in the valuation of the SPV (the Latest Valuation) and is called a deferred tax. When we revalue the properties, as described above, we adjust the Deferred Tax provision accordingly. The Latest Property Value has to increase by an amount greater than the purchase price plus certain incidental purchase costs before any deferred tax is recognized.
Deferred Tax only becomes payable if and when the property is sold, and is considered a potential “liability” until that point. For example, if the property valuation increased by RM10,000 over and above the purchase price and certain purchase costs, then RM 500 (RM10,000 x 5%) would be recognized as a deferred tax liability.
How does the referral offer work?
Everyone who signs-up for Property Monster has their own referral invite link, which can be found on the dashboard. If the referee clicks on the invite link and subsequently signs-up, then the referral offer will be applied to the referee’s account. In order for the referrer and referee to receive the reward, the referee must reach a cumulative portfolio size of RM 12,000.
At the point, both the referrer and referee will be eligible for RM 250 cashback.
When will the referral offer payments be made?
The payment will be made on the 15th of each month or the nearest working day.
Can I refer people who have already invested?
No, they cannot have already signed-up to Property Monster.
How do I fund my Property Monster account?
There are two ways you can fund you are a Property Monster account:
- Debit card. We accept Visa and Mastercard. The funds appear in your Property Monster account immediately.
- Bank transfer. The funds will take up to three business days to appear in your Property Monster account.
If you fund your account in a currency other than RM, your bank will convert the amounts at their specified exchange rate.
Please note our minimum investment is RM500.
Why do you verify bank accounts?
This is a standard anti-money laundering procedure and is only needed the first time an investor makes a withdrawal.
Property Monster will undertake bank account verification of both private and corporate customers on their first withdrawal from their Property Monster account. If for any reason bank verification cannot be completed electronically, Property Monster will request a bank statement or bank letter that confirms the account name and details belong to the respective customer or business.
How do I withdraw funds from my Property Monster account?
You can withdraw funds at any time from the “Account” page. Withdrawals to Malaysian bank accounts take up to 3 business days to clear, but this can take a little longer for non-Malaysian accounts.
All withdrawals are in RM and your bank will convert the amounts at their specified exchange rate.
In order to protect your funds, the first time you make a withdrawal we may verify that the account details entered belong to you. Where possible we will perform this electronically, but we may require further information such as a copy of a recent bank statement.
Why do I have to verify my bank details for withdrawals?
This is a standard anti-money laundering procedure and is only needed the first time an investor makes a withdrawal. We also do this for your protection; to ensure that money from your Property Monster account goes to your bank account.
Typically we complete this verification electronically, however where this is not possible we may request further information such as a copy of a recent bank statement. Property Monster will only transfer money to a bank account in the name of the Property Monster account holder.
Is there a minimum withdrawal?
Yes, the minimum withdrawal is RM500.
Fees and Taxes
What are Property Monster’s fees?
The fees relate to Property Monster’s two primary services:
- A technology platform that allows investors to make indirect investments in property, and subsequently sell those investments, for which we charge a one-off fee of 2% at the point funds are invested. This fee is not annually recurring and there is no charge for disposal. The 2% fee applies, whether it is a New Listing or Subsale investment that you’re making. Transaction fees on all markets shall be rounded up to the nearest cents and the minimum fee per transaction shall be RM 1.
- The advertising, letting and full management of those properties, for which we charge 10% (+6% GST if applicable) of Gross Rent. The amount is deducted from gross rental income and reduces the amount distributed to investors. Property Monster may choose to outsource all or part of this service to a third party but will, of course, bear the costs of this.
What are the tax implications of investing via Property Monster?
Corporation Tax (payable by SPVs)
With Property Monster, your investment in property is made through a Malaysian Limited Company, via the purchase of an interest in shares. We call this a Special Purpose Vehicle “SPV”, which is established specifically for purchasing that individual property.
The taxable profit made by the SPV is subject to corporation tax, which the SPV will pay directly to the Malaysian tax authority, LHDN. Companies incorporated in Malaysia with a paid-up capital of RM 2,500,000 or less is taxed 18% on the first RM 500,000, with the balance taxed at 24% rate.
In addition, should the property price increase, Corporation Tax is payable on the gain on disposal. This future Corporation Tax liability is recognized in the valuation of the SPV and is called ‘Deferred Tax’.
For example, if the property valuation increased by RM 10,000 over a 5 year period, then RM 500(RM 10,000 x 5%) would be recognized as a Deferred Tax liability, which in turn is reflected in the estimated value that we publish for that property’s shares on the platform.
Recognizing Deferred Tax is important for ensuring that the investors who have benefited from any property price increases are the same investors that incur the related Corporation Tax.
Personal taxation (payable by investors whether individual or corporate)
All investors should seek independent tax advice, an overview of the personal tax implications.
We provide all our investors with tax statements, which can be accessed in the Accounts section of the Property Monster platform. These are to assist you with any tax returns and provide a summary of dividends received and capital gains generated over a specified period.
Please note that tax rates are subject to future change, and the above does not constitute tax advice.
Does Property Monster pay interest on client monies?
No, Property Monster does not pay interest on client monies (i.e. those funds that are within your account but not invested in property).
What happens if Property Monster ceases to exist or falls into financial distress?
Each property investment is separately ring-fenced from the assets and liabilities of Property Monster, as well as any other property investments on the platform.
If Property Monster were to fall into financial distress an alternative manager could be appointed to continue management of the assets in accordance with the terms of investment.
Any funds that are held in your account, but not yet invested in property, are held in a clients monies account. This is a separate bank account and will be returned to investors in the event of Property Monster falling into financial distress.
Is Property Monster authorised and regulated by the Securities Commission of Malaysia?
No, Property Monster is not authorized or regulated by Securities Commission Malaysia.
What is the Complaints Procedure?
We take complaints very seriously. Please e-mail us at firstname.lastname@example.org