# Rent Distribution Flow

At Liquid Estate, rental income doesn’t just sit in a black box. Every dollar of rent collected flows transparently and efficiently — prioritizing long-term value for token holders. Every property generates rental income, which is distributed in a structured and optimized way.

### Step-by-Step

#### **1. Loan Downpayment First**

If the property was financed with a bank loan, a portion of the rental income goes toward paying down the principal.

→ This reduces debt and increases the equity backing each property token — a form of **leveraged yield** for token holders.

#### **2. Taxes & Compliance**

We take care of all applicable taxes — property tax, income tax, and any jurisdictional fees.

→ You're never on the hook for surprise deductions or liabilities.

#### **3. Ongoing Operations**

Administrative costs, property management, legal, accounting — all paid out of rental income.

→ Keeps the engine running smoothly without external funding.

#### **4. Future-Proofing**

**20% of all net rent** is automatically reserved for future **repairs, renovations, and capex**.

→ This creates sustainability and avoids sudden cost burdens.

#### **5. Yield Distribution**

The remaining profits are streamed directly into the **on-chain yield vault** (ERC4626) connected to the property token.

→ Token holders can claim or compound their rewards seamlessly.


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