InvestBay's multi-layered fee structure represents one of the more complex cost frameworks in the fractional real estate space. For investors evaluating European property exposure through tokenized ownership, understanding exactly what InvestBay charges, and how those fees accumulate over time, is essential before committing capital.
With fractional real estate investing gaining traction across global markets, platforms vary dramatically in how they monetize their services, and InvestBay's project-specific approach creates cost considerations that differ substantially from US-based alternatives.
Disclaimer: The information provided in this guide is for educational purposes only and does not constitute financial, tax, or legal advice. Always consult with a licensed professional before making any financial or investment decisions.
Key Takeaways
InvestBay's acquisition-related fees are project-specific, with historical documentation describing 3-5% and annual operating fees of 0.5-2% of gross asset value (plus applicable VAT), creating a multi-layered cost structure that varies by property
Project-specific charges documented in historical materials may include success fees of 0-20% on profits at exit, which can significantly reduce net returns on appreciated properties
InvestBay's historical annual operating fees were calculated on gross property value, not automatically on invested capital, a methodology that differs from US platforms using other calculation bases
Applicable VAT may increase certain InvestBay charges depending on the service, jurisdiction, and relevant offering terms
mogul offers property-specific LLC membership interests, potential monthly net rental income distributions, and conditional first-year loss protection for eligible new members
Understanding InvestBay's Position in Fractional Real Estate
What Is InvestBay?
InvestBay operates as a European fractional real estate platform that launched approximately in 2023, giving it roughly three years of operational history. The platform has attracted 6,500+ registered investors across 16 funded projects totaling €2.45 million in invested capital across properties in Austria, Croatia, Spain, Indonesia (Bali), and Cape Verde. Based in the Czech Republic and founded on May 12, 2022, InvestBay focuses on resort and vacation properties, including ski resorts in Austria, coastal properties in Croatia and Spain, and emerging market opportunities.
The platform uses tokenized ownership through IBUNIT tokens on the Polygon blockchain. InvestBay issues these tokens under a framework it describes as subject to EU Markets in Crypto-Assets Regulation. Its January 2025 white paper claimed an exemption from issuer authorization under Article 16. The Czech National Bank became the relevant national competent authority in February 2025, though its crypto-asset guidance makes clear that regulatory oversight does not equal product approval or guaranteed investor protection. This structure differs fundamentally from US platforms that typically use membership interests in property-owning LLCs.
InvestBay's white paper confirms that the issuer owns the underlying tokenized asset. Token holders have contractual rights connected to rental income, sale proceeds, redemption, and specified governance decisions, rather than direct property title.
Why Fee Structure Matters for Long-Term Returns
Fees in fractional real estate operate differently than traditional investment fees because they layer across multiple stages:
Acquisition phase: One-time costs embedded in your initial investment
Holding period: Recurring annual charges that compound over time
Exit phase: Disposition or success fees that reduce final proceeds
For a platform like InvestBay with projected 6-13% target returns, fees charged during acquisition, operation, and sale can reduce net returns substantially. Understanding each component helps investors calculate true expected returns rather than headline numbers.
InvestBay's Complete Fee Structure Explained
Acquisition Fees: Project-Specific, Historically 3-5%
InvestBay's acquisition-related fees are project-specific. Its historical white paper described a 3-5% fee on the property's gross purchase price, incorporated into the offering amount, while more recent public explanations indicate that acquisition-related costs are included in the total investment amount, with the exact percentage varying by property and jurisdiction. The applicable investment documentation determines the final charge.
Because these fees vary by project, the offering materials for each property determine its precise acquisition-related cost.
Key consideration: The project-specific nature means no universal fee schedule applies to every property.
Annual Operating Fees: Typically ~1% Per Year Plus Applicable VAT
InvestBay's annual operating fee has been described as approximately 1% for some projects, while historical documentation described a possible range of 0.5-2% per year, charged monthly based on the property's gross value. Under those historical terms, fees were assessed on the property's purchase price or latest valuation, not automatically on your invested capital; newer terms may differ by issue.
What this means in practice:
If a property appreciates, your annual fees may increase proportionally depending on the fee calculation basis specified in the offering terms
The fee accumulates over multi-year holding periods
Applicable VAT may increase certain charges depending on the service, jurisdiction, and relevant offering terms
On a hypothetical €10,000 investment representing 10% of a €100,000 property's economics, a 1% fee on the initial property value would equal €1,000 at property level, or €100 allocated to the investor. If VAT applies at 20% (as an illustrative example), the total annual cost would be €120. Over a 5-year hold, this would total €600 in operating fees alone before any other charges.
The actual fee percentage, calculation basis, and VAT treatment depend on the specific project and jurisdiction.
Collateral Agent Fee: Project-Specific
InvestBay's historical white paper described a possible collateral agent fee of approximately 0.2% annually. This jurisdiction-dependent charge, when applicable, covers the legal structure maintaining investor rights to the underlying property. The presence and amount of this fee varies by project.
Success Fee: Project-Specific, Historically 0-20% of Profit at Exit
InvestBay's historical documentation described a possible success fee ranging from 0-20% of profits at property sale. When applicable, the profit calculation uses the difference between sale price and original purchase price, with the fee deducted from investor proceeds.
Example calculation (hypothetical):
If a property purchased at €100,000 sells after 5 years for €130,000, the profit would be €30,000. A 15% success fee would equal €4,500. For an investor entitled to 10% of the property economics, this represents €450 deducted from the €3,000 profit portion.
The presence, rate, and calculation methodology of any success fee depends on the specific project's contractual terms.
The VAT Consideration for International Investors
Applicable VAT may increase certain InvestBay charges depending on the service, jurisdiction, and relevant offering terms. Under EU VAT rules, standard rates across member states vary, including 20% in Austria, 21% in the Czech Republic and Spain, and 25% in Croatia as of 2026.
The treatment of specific services under VAT rules differs by jurisdiction and service type. Some financial and real estate-related services may receive different VAT treatment than others.
US-based property investments generally do not incur EU VAT on domestic operations, though other taxes and expenses depend on structure and jurisdiction.
Breaking Down the Total Cost of Ownership
Hypothetical 5-Year Scenario: €10,000 Investment
To illustrate InvestBay's potential cost structure, consider a hypothetical €10,000 investment held for five years with moderate appreciation. This example uses mid-range assumptions and should not be interpreted as a representative or typical outcome.
Hypothetical assumptions:
The €10,000 investment represents 10% of a €100,000 property's economic interests
Acquisition-related fee: 4% (mid-range of historical 3-5%)
Annual operating fee: 1% on initial property value, with 20% VAT applied (illustrative)
Collateral agent fee: 0.2% annually (if applicable)
Property appreciates 30% over five years (€3,000 gain on proportional share)
Success fee: 15% of profit (if applicable)
Rental income assumptions excluded for simplicity
Hypothetical cost breakdown:
For the €100,000 property, a 4% acquisition fee would equal €4,000, with €400 allocated to the investor. The investor's assumed 10% share of annual operating fees of 1%, plus 20% VAT, would total €120 per year, or €600 over five years. If a collateral agent fee of 0.2% applies, that would add approximately €100 over five years (10% of €100,000 × 0.2% × 5 years). On a €3,000 appreciation gain, a 15% success fee would equal €450.
Total hypothetical fees: €400 (acquisition) + €600 (operating) + €100 (collateral) + €450 (success) \= €1,550.
Important caveats: This scenario is purely illustrative and assumes that property-level fees and returns are allocated proportionately; actual token allocations may differ because offerings also fund costs and reserves. Actual costs depend on the specific project's contractual fee structure, VAT treatment, calculation methodology, property performance, and holding period. The 30% appreciation is a hypothetical assumption, not a projection or expectation. Property-level operating expenses (management, utilities, repairs, taxes) would be deducted from gross rental income before investor distributions, separate from the platform fees illustrated above.
How Fee Methodology Differs from Some US Platforms
InvestBay's historically disclosed operating-fee calculation on gross property value contrasts with approaches used by some US platforms:
InvestBay approach (based on historical documentation):
Annual fees may be calculated on property's gross value
Fees may increase if the property appreciates, depending on terms
Multiple possible fee layers including operating, collateral, and applicable VAT
Approaches used by some US platforms:
Some calculate fees on invested capital or net asset value
Some platforms charge 0% annual AUM fees on investor equity
No European VAT layer
This methodological difference means InvestBay's stated percentage rates may translate differently when compared across platforms using different calculation bases and fee structures.
Hidden Costs Beyond the Main Fee Schedule
Property Operating Expenses
InvestBay's documentation discloses additional costs deducted from gross income before net distributions:
Management fees: Day-to-day property operations
Utilities and insurance: Ongoing property expenses
Repairs and maintenance: Capital preservation costs
Property taxes: Jurisdiction-specific levies
These expenses reduce the rental income investors receive, separate from the platform fees detailed above.
Legal and Professional Services
Additional professional costs disclosed in offering materials may include:
Accountants and tax advisors
Construction consultants for renovations
Property and rent valuation services
Legal counsel for transactions
Exit Transaction Costs
Beyond any applicable success fee, property sales incur:
Due diligence costs for buyers
Brokerage commissions
Land registry and notary fees
Escrow charges
Transfer taxes (jurisdiction-specific)
Currency Conversion Exposure
InvestBay generally prices investments in EUR and may pay proceeds in EUR or Czech koruna, creating foreign exchange exposure for investors using other currencies. Currency fluctuations can amplify or offset investment returns independent of property performance.
When InvestBay's Fee Structure May Be Appropriate
Unique European Property Access
InvestBay offers resort and vacation property exposure in markets outside mogul's US residential focus:
Austrian ski resort properties
Croatian coastal vacation rentals
Spanish resort communities
Emerging market opportunities in Bali and Cape Verde
For investors specifically seeking European vacation property exposure, InvestBay provides access to different property markets and legal structures.
Project-Specific Contractual Arrangements
Some specific InvestBay projects include project-specific contractual arrangements such as developer commitments. For example, the Tarafo Bay 2 project page describes a developer repurchase commitment tied to a stated minimum resale value after an operating period.
Such arrangements are project-specific and depend on the terms and financial ability of the relevant counterparty. When contractual arrangements offset fee considerations, the net cost-benefit calculation may differ from projects without such features.
Targeted Investment Timelines
For projects with specific timelines and contractual distribution terms, the fee structure may be acceptable if the underlying return profile compensates for the cost layers, though investors should calculate net expected returns after all applicable fees.
Comparing InvestBay to US Platform Fee Structures
Front-Loaded vs. Recurring Fee Models
US fractional real estate platforms generally follow one of two fee philosophies:
Front-loaded structure:
Higher upfront fees (typically 3-5%)
Little or no annual AUM fees on investor equity
Costs amortize over longer holding periods
Recurring fee structure:
Lower upfront costs
Annual fees of 0.5-1% or more
Costs accumulate over time
InvestBay combines elements of both, with acquisition-related fees plus ongoing annual charges, creating a hybrid structure whose total cost depends heavily on the specific project terms and holding period.
The Impact of Different Fee Calculation Methods
Platforms that charge 0% annual asset-under-management fees on investor equity allow investors to hold positions without ongoing platform fee considerations. The specific calculation basis (gross property value vs. invested capital) and fee percentage create different cost dynamics over multi-year holding periods.
US Tax Treatment Differences
Depending on their legal structure, US-based platforms may offer:
K-1 tax reporting: Pass-through entity treatment
Depreciation allocations: Potential tax considerations on rental income
Established US real estate tax frameworks: Familiar rules for US tax advisors
InvestBay's tokenized structure may create different tax considerations. As explained in IRS reporting guidance, FBAR applies to qualifying foreign financial accounts above applicable thresholds, while Form 8938 depends on reportable asset classification and other requirements; owning a token does not automatically trigger either filing.
Critical Consideration: US Investor Exclusion
InvestBay explicitly excludes US citizens from participating on its platform according to its official FAQ. This exclusion makes the fee analysis primarily educational for US citizens, who cannot participate under the stated eligibility rules regardless of fee competitiveness.
For US citizens seeking fractional real estate exposure, domestic platforms offer:
Regulatory frameworks established under US law
Tax structures familiar to US advisors
Fewer foreign-currency considerations for domestic properties
Potential secondary market pathways developed for US participants
Why mogul Offers a Different Approach to Fractional Real Estate Fees
mogul was founded by Goldman Sachs real estate alumni with over \$10 billion in collective deal experience, bringing institutional-grade underwriting to individual investors. The platform's fee philosophy prioritizes alignment and simplicity over complex multi-layered charges.
mogul's fee structure:
mogul charges a one-time 5% platform fee calculated on property purchase price and capitalized into the investment, with no recurring mogul platform fees. Ordinary property operating expenses still affect the net income available for distribution.
This front-loaded approach means investors understand the platform fee at purchase. No compounding annual platform charges on investor equity accumulate over multi-year holding periods.
What sets mogul apart:
Institutional selection standards. mogul accepts less than 1% of reviewed properties using a 12% minimum projected IRR hurdle before offering to investors. This rigorous selection process applies institutional underwriting standards, although projected returns are not guaranteed.
First-year downside coverage. mogul covers up to \$10,000 in qualifying first-year losses on eligible investments made during a new member's first seven days, subject to the program's terms. Coverage depends on the promotion's terms and is not an unconditional guarantee against losses.
Platform co-investment alignment. mogul invests in every property alongside users, creating shared exposure that aligns platform interests with investor outcomes.
Direct LLC ownership. Each mogul property is held in a state-registered LLC, with investors receiving membership interests and governance rights set out in the operating agreement. Tax pass-through treatment depends on the entity's classification; LLC interests are not direct property deeds.
US market focus. mogul concentrates on US single-family rental properties in growth markets including Houston, Dallas, and select California locations selected through mogul's institutional underwriting process. The platform's 18.8% historical average IRR reflects past performance, which does not guarantee future results.
mogul's free investment property calculator and Airbnb calculator allow investors to analyze potential returns on any US property using data and tools employed in institutional real estate analysis.
Disclaimer: The information provided in this guide is for educational purposes only and does not constitute financial, tax, or legal advice. Always consult with a licensed professional before making any financial or investment decisions.
Frequently Asked Questions
What happens if I need to exit my InvestBay investment early?
InvestBay's secondary market remains under development with limited public data on trading volume, spreads, or completion rates. The platform's current FAQ describes the secondary marketplace as offering shares held by InvestBay itself, while automated investor-to-investor token trading remains under development. Additionally, InvestBay's white paper permits qualifying requests for redemption but allows financial settlement within two years. The redemption amount is linked to valuation after applicable costs, rather than an unconditional immediate return of the initial investment.
How does mogul's LLC ownership differ from InvestBay's tokens?
InvestBay's IBUNIT tokens represent contractual rights to proceeds from issuer-owned assets, not direct property title. The issuer owns the tokenized asset, while investors own tokens carrying rights to rental distributions and sale proceeds according to the contractual terms. In comparison, mogul investors own membership interests in property-specific LLCs, with governance rights established under their operating agreements rather than individually deeded title. These structures provide different contractual rights under different legal systems.
Are there any circumstances where InvestBay's fee structure makes sense for eligible investors?
InvestBay explicitly excludes US citizens from investing, making this question moot for American investors. However, for eligible non-US investors, the fee structure may be appropriate when seeking specific European property exposure, when project-specific contractual arrangements address fee considerations, or when project-specific expected returns after all fee layers meet the investor's objectives. Net outcomes depend on the applicable project terms, fees, and property performance.
How does mogul's one-time platform fee compare with InvestBay's fees?
InvestBay's historical documents describe acquisition, annual operating, and possible success fees, with exact current charges set by project. mogul charges a one-time 5% platform fee on property purchase price, capitalized into the investment, with no recurring mogul platform fees. Because these fees use different calculation bases, comparing headline percentages alone does not establish total cost.
Does mogul offer monthly income and first-year loss protection?
mogul offers potential monthly distributions when properties generate sufficient distributable net rental income, although payments are not guaranteed. Eligible new members can also qualify for up to \$10,000 in first-year loss protection for qualifying investments made during their first seven days. Coverage is based on the aggregate total return after one year and is subject to promotional terms.