Home General Help SecondaryDAO Property Metrics Guide for Investors

SecondaryDAO Property Metrics Guide for Investors

Last updated on Sep 03, 2025

SecondaryDAO Property Metrics Guide for Investors

Overview

This guide explains how all property statistics are calculated on the SecondaryDAO platform. Understanding these metrics will help you make informed investment decisions when buying, selling, and holding tokenized real estate.

Key Investment Metrics

1. Token Yield (Current Yield) 📊

What it means: The annual return you receive from holding tokens, based on rent distributions.

How it's calculated:

Token Yield = (Annual Distributable Cash ÷ Market Cap) × 100

Example: 123 Main St

  • Annual Distributable Cash: $24,300 (rent minus expenses)

  • Market Cap: $282,400 (all tokens at current price)

  • Token Yield: 8.6%

Why it matters: This is your actual cash return rate from holding tokens. Higher yields mean more monthly income.

2. Gross Yield 🏠

What it means: Total rental income relative to the property's value, before any expenses.

How it's calculated:

Gross Yield = (Annual Gross Rent ÷ Property Value) × 100

Example: 123 Main St

  • Annual Gross Rent: $30,000 (12 × $2,500 monthly)

  • Property Value: $250,000 (fair market value)

  • Gross Yield: 12.0%

Why it matters: Shows the property's income potential. Compare this to other real estate investments.

3. Cash-on-Cash Return 💰

What it means: Your cash return on the actual money you invested.

How it's calculated:

Cash-on-Cash = (Annual Cash Flow ÷ Your Investment) × 100

Example: 123 Main St

  • Annual Cash Flow: $24,300 (after all expenses)

  • Total Investment Raised: $282,400

  • Cash-on-Cash: 8.6%

Why it matters: This is your true return on investment. In SecondaryDAO, this often equals Token Yield since all cash flow is distributed.

4. Cap Rate (Capitalization Rate) 📈

What it means: Industry standard metric for comparing property investments.

How it's calculated:

Cap Rate = (Net Operating Income ÷ Property Value) × 100

Example: 123 Main St

  • Net Operating Income: $24,300 (rent minus operating expenses)

  • Property Value: $250,000

  • Cap Rate: 9.7%

Why it matters: Higher cap rates typically indicate higher income relative to property value. Compare to other markets.

5. NAV Premium/Discount ⚖️

What it means: How much the tokenized investment trades above or below the actual property value.

How it's calculated:

NAV Premium = ((Market Cap - Property Value) ÷ Property Value) × 100

Example: 123 Main St

  • Market Cap: $282,400 (what investors pay for all tokens)

  • Property Value: $250,000 (actual property worth)

  • NAV Premium: +13.0%

Why it matters:

  • Positive (+13.0%): You're paying a premium above property value

  • Reason: Premium includes reserves, listing fees, and initial operating capital

  • Consider: Whether the premium is justified by income potential

Income Distribution Metrics

Per-Token Monthly Distribution 💵

What you receive: Actual cash payments to your wallet each month.

How it's calculated:

Monthly per Token = (Annual Distributable Cash ÷ Total Tokens) ÷ 12

Example: 123 Main St

  • Annual Distributable Cash: $24,300

  • Total Tokens: 5,648

  • Monthly per Token: $0.36

For 100 tokens: $35.85 per month = $430.24 annually

Expense Ratio 📋

What it means: How much of rental income goes to operating the property.

How it's calculated:

Expense Ratio = (Operating Expenses ÷ Gross Rent) × 100

Example: 123 Main St

  • Operating Expenses: $5,700 (taxes, insurance, management, DAO fees)

  • Gross Rent: $30,000

  • Expense Ratio: 19.0%

Why it matters: Lower is better. Well-managed properties typically have 15-25% expense ratios.

Advanced Metrics

Projected IRR (Internal Rate of Return) 🚀

What it means: Total expected return including both cash flow and property appreciation.

How it's calculated:

Projected IRR = Cash-on-Cash Return + Expected Appreciation

Example: 123 Main St

  • Cash-on-Cash Return: 8.6%

  • Expected Appreciation: 3.0% annually

  • Projected IRR: 11.6%

Why it matters: Your total investment return over time. Consider this against other investment options.

Market Cap 🌐

What it means: The total value of all tokens at current trading price.

How it's calculated:

Market Cap = Token Price × Total Token Supply

Example: 123 Main St

  • Token Price: $50

  • Total Supply: 5,648 tokens

  • Market Cap: $282,400

Why it matters: Shows the total investment size and liquidity of the token.

What These Numbers Mean for Investors

🟢 Strong Investment Indicators:

  • High Token Yield (8.6%): Good monthly income

  • Reasonable Cap Rate (9.7%): Competitive with real estate market

  • Low Expense Ratio (19.0%): Efficiently managed property

  • Positive Cash Flow: Property generates income after all expenses

⚠️ Things to Consider:

  • NAV Premium (+13.0%): You're paying above property value

  • Why Premium Exists: Includes reserves for vacancies, maintenance, and platform fees

  • Income Stability: Depends on tenant occupancy and rent collection

📊 Comparison Benchmarks:

  • Traditional REITs: 3-6% dividend yields

  • Direct Real Estate: 6-12% cap rates

  • Bonds/CDs: 2-5% yields

  • 123 Main St Token Yield: 8.6% (competitive)

How Data is Verified

Data Sources (in priority order):

  1. Master Spreadsheet: Verified property financials and projections

  2. Actual Rent Payments: When available from smart contracts

  3. Property Management Reports: Monthly operational data

  4. Market Comparables: Local real estate data

Calculation Updates:

  • Real-time: API provides current calculated metrics

  • Monthly: Updated with actual rent and expense data

  • Quarterly: Reviewed and adjusted for market changes

  • Annually: Full property revaluation

Transparency Features:

  • Tooltips: Show exact calculation formulas

  • Data Quality Tags: Indicate if metrics are "Estimated," "Projected," or "Actual"

  • Audit Trail: All calculations are logged and verifiable

Risk Considerations

Metric Limitations:

  • Projections: Based on current market conditions and assumptions

  • Actual vs. Estimated: Early properties may use estimated expenses

  • Market Risk: Token prices and yields can fluctuate

  • Vacancy Risk: Lower occupancy reduces actual distributions

Due Diligence:

  • Review expense breakdown - Are costs reasonable?

  • Check market comparables - How do yields compare locally?

  • Understand the premium - Why are you paying above property value?

  • Consider liquidity - Can you easily buy/sell tokens?

Reading the Platform

Marketplace View:

  • Token Price: Current cost per token

  • Token Yield: Expected annual return rate

  • Gross Yield: Property's income potential

  • Status: "Live Sale," "Trading," etc.

Property Details View:

  • Real Estate Metrics: Gross yield, cap rate, NOI, expenses

  • Crypto/Market Metrics: Token yield, market cap, NAV premium

  • Buy/Sell Widget: Per-token income projections

  • Performance Tab: Trading history and volatility

Your Dashboard:

  • Portfolio Value: Total token holdings at current prices

  • Monthly Income: Expected distributions from all properties

  • Performance: Gains/losses and yield over time

Smart Contract Integration

Actual Rent Tracking:

Once properties are operational, the platform will display actual rent collected from smart contracts:

  • Monthly Deposits: Property managers deposit actual rent collected

  • Distribution Events: Smart contracts log all rent payments

  • Yield Updates: Metrics update based on real performance vs. estimates

Transparency Benefits:

  • Verifiable Income: All rent payments recorded on blockchain

  • Automated Distributions: Smart contracts handle monthly payments to token holders

  • No Trust Required: Blockchain ensures transparent income distribution

Investment Strategy Implications

High-Yield Focus (8.6% Token Yield):

  • Good for: Income-focused investors seeking monthly cash flow

  • Risk level: Moderate (depends on property management and market)

  • Compare to: Traditional dividend stocks (2-4%) or REITs (4-6%)

Premium Consideration (+13.0% NAV):

  • Trade-off: Pay premium for professional management and liquidity

  • Benefits: No landlord responsibilities, instant liquidity, fractional ownership

  • Cost: Higher price than direct property ownership

Portfolio Diversification:

  • Geographic: Different markets and property types

  • Yield Range: Mix high-yield and stable properties

  • Liquidity: Balance long-term holds with trading opportunities

Frequently Asked Questions

Q: Why is Token Yield different from Gross Yield? A: Token Yield (8.6%) is after expenses; Gross Yield (12.0%) is before expenses.

Q: Why do I pay a NAV Premium? A: The premium covers reserves, platform fees, and provides instant liquidity vs. buying property directly.

Q: How often do I receive distributions? A: Monthly, based on actual rent collected and distributed through smart contracts.

Q: Are these returns guaranteed? A: No. Returns depend on actual rent collection, property performance, and market conditions.

Q: How do I track my investment performance? A: Use your dashboard to monitor token values, distributions received, and total returns.

Getting Started

Before Investing:

  1. Review all metrics for each property

  2. Understand the calculations using this guide

  3. Consider your risk tolerance and income goals

  4. Start small to test the platform and returns

After Investing:

  1. Monitor monthly distributions in your dashboard

  2. Track property performance vs. initial projections

  3. Compare actual vs. estimated metrics as data becomes available

  4. Rebalance portfolio based on performance and goals

Disclaimer: All metrics are estimates based on current data and market conditions. Past performance does not guarantee future results. Consult with financial advisors before making investment decisions.

Last Updated: September 3, 2025
Platform Version: SecondaryDAO v2.0
Example Property: 123 Main St (Multifamily, $250K FMV)