Property Investment Model

Candelaria believe that the need to adopt an all in one approach for property investors is the key to successful property investments. We believe this is due to two factors.

Firstly it is clear that investors have been frustrated by the need to deal with numerous expert parties in order to reach their objectives whereby they had acquired a property at fair value had it refurbished on budget, furnished to suit the market and let swiftly and managed efficiently.

Secondly, in order to achieve strong investment performance, it was essential that each of the key areas of expertise became an integral part of the process. The Investment Model is based on internal market intelligence with an integrated team working to a proven formula and a seamless process that connects each discipline by way of a constantly updated analytical investment appraisal.

1. Appointment and Coordination. The process of purchasing property requires the coordination of various professional parties covering conveyancing, raising off finance, forward tax planning and consideration structural and planning implications.
2. Tender Process. The tender process includes the collation of all prepared detailed plans and drawings such as lighting, joinery and plumbing, plus structural calculations, suppliers items and subcontractors estimates.
3. Design and Refurbishment programme. The Rental Income from a property must cover all expenses including interest costs, management charges, and allowances for void periods and on-going maintenance. The higher the initial yield the more comfortably a property can be geared. A low yielding property will allow less debt to be serviced, which means more equity will be needed, which means that the Return on Equity is likely to be lower.
4. Post Work Evaluation. On completion of works third party opinion is sought to assess the property’s value in the prevailing climate. The lenders valuer may be invited back to reappraise the property for refinancing.
5. Letting. The speed by which a let can commence, once terms have been agreed, is dictated by the effective coordination of various parties. Consents usually have to be obtained from the freeholder   and, where applicable, the mortgage lender. Often a tenant will insist on his or her own agreement format and the landlord’s solicitor would be involved.
6. Each investment is continuously appraised to assess its market position, relative performance and financial status. Consideration is given to cost of borrowing, debt, repayment and potential equity release fro further investment. An essential part of the activity is to look and plan ahead. As tenancies end, this acts as the trigger to undertake improvements and upgrades.

For more information on property investments in Greater China please contact Managing Director, James Carstairs.