🏠 Understanding Property Yield Calculations: Data Source Precedence Guide

🏠 Understanding Property Yield Calculations: Data Source Precedence Guide

Overview

SecondaryDAO uses a sophisticated 4-tier data source precedence system to calculate the most accurate property yields for investors. This system ensures transparency and helps you understand the reliability of the financial metrics you see for each property.

📊 The 4-Tier Source Precedence System

1. 🔗 On-Chain Data (100% Confidence)

Highest Priority - Verified Blockchain Data

• Source: Smart contract transactions and blockchain records

• What it includes: Actual rent payments, expense disbursements, token distributions

• Why it's most reliable: Immutable, transparent, and cryptographically verified

• When available: Once properties are operational and using smart contracts for transactions

Example: If a property received $2,500 in rent payments through the smart contract in January, this becomes the definitive rent figure for that month.

2. 🧾 Receipt-Backed Data (85% Confidence)

Second Priority - Documented Evidence

• Source: Bank statements, invoices, receipts, and verified financial documents

• What it includes: Property manager reports with supporting documentation

• Why it's reliable: Physical evidence of transactions, auditable trail

• When available: When property managers provide documented proof of income/expenses

Example: Property manager submits bank statements showing $2,400 rent received, along with a $150 repair receipt.

3. 📋 Seller Statement Data (60% Confidence)

Third Priority - Self-Reported Information

• Source: Property seller or operator statements without full documentation

• What it includes: Reported rent rolls, estimated expenses, occupancy claims

• Why it's less reliable: Self-reported, may lack independent verification

• When available: During property onboarding or monthly reporting without full documentation

Example: Property owner reports "$2,500/month rent typically collected" during initial listing.

4. 📈 Estimate Data (30% Confidence)

Lowest Priority - Projections and Market Analysis

• Source: Market rent estimates, comparable property analysis, projections

• What it includes: Market-based rent estimates, projected expenses, industry averages

• Why it's least reliable: Based on assumptions and market conditions, not actual performance

• When available: For new properties or when no actual data is yet available

Example: Market analysis suggests similar properties rent for $2,300–2,700/month in the area.

🏆 How Data Quality Status is Determined

The system analyzes the trailing twelve months (TTM) of rent data to assign an overall quality rating:

✅ VERIFIED Status

• Criteria: 75%+ of TTM data comes from On-Chain or Receipt-Backed sources

• Confidence Score: 90%

• Badge Color: Green

• What it means: Highly reliable data with strong documentation

🔄 BLENDED Status

• Criteria: 50–74% of TTM data comes from On-Chain or Receipt-Backed sources

• Confidence Score: 70%

• Badge Color: Orange

• What it means: Mix of verified and reported data, moderately reliable

📋 ESTIMATED Status

• Criteria: Less than 50% of TTM data comes from verified sources

• Confidence Score: 45%

• Badge Color: Gray

• What it means: Primarily based on estimates and projections

💰 How This Affects Your Investment Decisions

Token Yield Calculation

Token Yield = (Net Operating Income ÷ Market Capitalization) × 100

• Higher data quality = more reliable yield projections

• VERIFIED properties show actual historical performance

• ESTIMATED properties show projected potential performance

Gross Yield Calculation

Gross Yield = (Annual Rental Income ÷ Property Value) × 100

• VERIFIED: Based on actual collected rent

• BLENDED: Mix of actual and reported rent

• ESTIMATED: Based on market rent projections

📈 TTM (Trailing Twelve Months) Analysis

What TTM Shows You

• Rolling 12-Month Window: Always shows the most recent 12 months of performance

• Monthly Breakdown: See which months have actual vs. estimated data

• Source Attribution: Each month shows its data source and confidence level

• Seasonal Trends: Identify patterns in rent collection and expenses

Reading TTM Tooltips

When you hover over yield metrics, you'll see:

• Month-by-month rent breakdown

• Data source for each month (On-Chain, Receipts, Seller Statement, Estimate)

• Confidence percentage

• Total verified vs. estimated months

Example TTM Tooltip:

Token Yield: 8.2% (BLENDED - 70% Confidence)

Jan 2024: $2,500 rent (On-Chain) ✅  
Feb 2024: $2,500 rent (On-Chain) ✅  
Mar 2024: $2,400 rent (Receipts) 🧾  
Apr 2024: $2,500 rent (Seller Statement) 📋  
...  
9 months verified, 3 months estimated

🔍 Data Source Evolution

How Data Quality Improves Over Time

1. Property Launch: Starts with ESTIMATED data based on projections

2. Initial Operation: Moves to BLENDED as some actual data comes in

3. Full Operation: Achieves VERIFIED status with consistent on-chain transactions

4. Ongoing Updates: Newer verified data replaces older estimates

Source Upgrading

• Higher-quality data automatically replaces lower-quality data for the same period

• On-chain data will override receipt-backed data if both exist

• System maintains audit trail of all data sources and changes

⚠️ Important Investment Considerations

VERIFIED Properties

• ✅ Most reliable for investment decisions

• ✅ Historical performance clearly established

• ✅ Lower risk of yield surprises

• ❌ May have higher token prices due to proven performance

BLENDED Properties

• ⚠️ Moderate reliability, some uncertainty remains

• ⚠️ Mix of proven and projected performance

• ✅ May offer good value if trending toward VERIFIED

• ❌ Some months may have inaccurate data

ESTIMATED Properties

• ❌ Highest uncertainty in projections

• ❌ Yields may not match actual performance

• ✅ Potentially undervalued if estimates are conservative

• ⚠️ Higher risk investment requiring careful monitoring

🛡️ Transparency & Trust

Why This System Matters

• Informed Decisions: You know exactly how reliable each property's data is

• Risk Assessment: Higher data quality typically means lower investment risk

• Performance Tracking: Watch properties improve from ESTIMATED to VERIFIED over time

• Fair Pricing: Token prices should reflect data quality and associated risk

Questions to Ask Before Investing

1. What percentage of the TTM data is VERIFIED vs. ESTIMATED?

2. How long has the property been operational with on-chain transactions?

3. Are the estimated months based on conservative or optimistic projections?

4. What's the plan for moving from ESTIMATED to VERIFIED data?

📞 Need Help?

If you have questions about a specific property's data quality or yield calculations:

1. Check the TTM tooltip - Hover over any yield metric for detailed breakdown

2. Review the data quality badge - Look for VERIFIED, BLENDED, or ESTIMATED status

3. Contact support - Reach out through this chat system for property-specific questions

4. Request documentation - Ask for supporting documents for any claimed figures

Remember: Higher data quality generally means more reliable investment projections, but also potentially higher token prices due to reduced uncertainty.