Investing in real estate used to be a tough nut to crack – lots of complicated steps, big costs and enough headaches to make anyone think twice.

But at Wahed, we've revolutionised this process. We've taken property investment and turned it into something simple, transparent and accessible for everyone.

While investing through the Wahed app might seem effortless, there’s actually a frenzy of activity unfolding in the background. We've taken on the complex work so you don't have to.

To give you a glimpse behind the scenes, we’ve put together a brief 8-step guide that walks you through the journey of a Wahed Real Estate investment, from property selection to your potential returns.

Stage 1: Identifying Prime Properties that Meet our Standards

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Our journey begins with an exhaustive search for properties that fit our investment mandate, primarily through our extensive network of specialist real estate agents and auction houses, and occasionally by scouring the internet.

What’s on our mandate?

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Location:

We look for properties in prime localities in major cities like London and emerging cities such as Manchester. Why? Because these areas demonstrate a track record of strong property performance.

Price range:

We target properties between £200k to £600k.

Rental yield:

We’re after properties with a net rental yield of more than 5%. This means higher rental returns for our investors.

Condition:

We prioritise properties in good condition that require minimal to no major renovation work.

Besides initial screening, we also perform a preliminary financial assessment at this stage. We verify the potential rental yield to make sure it delivers strong dividends and assess whether the property is being offered at a discount to its market value. If a property passes this high-level screening, we move on to a more detailed analysis.

Stage 2: In-depth Property Analysis

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We shortlist properties that meet our requirements during the initial screening and go over them with a fine-tooth comb. We’re talking about both a detailed qualitative and quantitative analysis using our Wahed financial model. It analyses things like:

• Rental income projections: How much can we expect tenants to pay based on comparables found in the area?
• Property capital appreciation: How much might the property be worth in the future?
• Projected costs: What are the anticipated expenses to maintain and manage the property?

The qualitative review aims to go beyond the numbers and we analyse the following:

• The size of the property and the price per square foot
• The location and proximity of the property
• The local amenities that may make it more desirable for residents, thus increasing the potential demand
• Other qualitative factors that may indicate the property value could potentially grow over time

Along with the analysis, we also conduct in-person property visits to ensure each property fits our criteria. During these visits, we:

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All this information is then compiled and graded using our playbook, which factors in price, size, condition, location etc. Only properties that achieve a high enough grade make it to the next stage.

Stage 3: Investment Committee Review

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The next step is presenting the property to our Investment Committee. This committee consists of experts in the real estate investment field who provide feedback and ultimately decide whether to approve or reject the property.

The committee reviews all the data from the in-depth analysis. They determine if it’s a viable investment opportunity for our investors and confirm if the property is compliant with Wahed’s investment goals and shariah standards.

If the property is approved, we move forward. If not, well, we’re back to the drawing board!

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Stage 4: Professional Assessment

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At this stage, we get down to the nitty-gritty. We work with a network of RICS-certified surveyors to carry out a survey of the property.

RICS, or the Royal Institution of Chartered Surveyors, is a globally recognised professional body that accredits property professionals and sets the standards for quality and integrity in valuation, property and construction.

Why is this important? It gives us (and you) peace of mind that the property is everything it claims to be. This detailed survey allows us to:

• Confirm our valuation
• Identify any potential issues
• Provide leverage for price negotiations
• Determine an appropriate sale amount

This analysis helps us to negotiate the best possible deal for our investors. Following the survey, if we reach an agreement with the seller, the conveyancing process begins.

Conveyancing is the legal transfer of property ownership, where lawyers handle all the necessary paperwork and formalities.

Stage 5: Making the Deal Ready for the Platform

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Once the property exchange is finalised and we’re given a green light from our lawyers, it’s time to get the property ready for our investors.

First things first, we appoint an experienced property manager who will be responsible for day-to-day operations, including tenant management, processing rental payments, and handling any maintenance and repairs.

Next, we create a detailed deal page on the Wahed app. This is where you can find all the information you need to know about the investment opportunity – from our analysis and expected rental yield to the property’s appreciation potential and the disbursement timeline.  

Finally, we prepare all the necessary marketing material to present the deal to our investors. We believe in full transparency so you can make an informed decision.

Stage 6: Your Time to Invest

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But here’s a pro tip: If you want to invest, you’ll have to act quickly as our properties get fully funded within hours!

Stage 7: After the Property is Funded

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Once a property is fully funded, we move swiftly to finalise the purchase and transition of ownership. The funds are transferred to the property owner, and the legal ownership is shifted to the Special Purpose Vehicle (SPV) set up specifically for this investment, in which you and other investors hold shares.

From this point on, you can sit back and relax. The property manager takes care of everything related to the property, meaning you don’t have to worry about chasing rent or fixing broken handles.

During this time, the manager tries to ensure that the property remains occupied and keeps generating rental income throughout the investment period. 

Every quarter, you’ll receive your share of the rental income based on the property’s occupancy rate and proportional to the amount you’ve invested. The more you invest, the more you could earn.

Stage 8: Fast Forward – Selling the Property

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After five years, we take the property off the rental market and put it up for sale. The idea is that over those five years, the property’s value will have increased, allowing investors to profit from the appreciation in value.

Once the property is sold, you receive your share of the sale proceeds. This final payout wraps up your investment journey with this particular property. But don’t worry – there are always new and upcoming opportunities with Wahed Real Estate.

And that's a wrap!

Want to learn why you should consider Wahed Real Estate for your real estate investments? Check out our blog on the topic.