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Wahed 101

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How to Complete Your Real Estate Onboarding

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How to Complete the Appropriateness Questionnaire

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How to Consent to Marketing (and Why it Matters for Real Estate Investors)

Ali Ahmed

Real Estate Acquisitions

Safdar Alam

Director of Wahed Ventures

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Webinar

7th August 2025

Introduction to Wahed Real Estate:

Real Estate without Debt

An overview of fractional real estate investing with Wahed, focusing on our 0 debt, equity-based model. The session walked through the full investment journey from onboarding to property selection, with a live example of how to review deals in the app, followed by a Q&A.

Real Estate basics

A Muslim’s Guide to Halal Real Estate Investing

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Glossary

AAOIFI (Accounting and Auditing Organization for Islamic Financial Institutions)

AAOIFI is an international body that sets standards for Islamic finance. Its guidance is often used by Shariah boards when reviewing investment structures to ensure compliance with Islamic principles.

Glossary

Acquisition Costs

The total costs involved in buying a property, in addition to the purchase price. These usually include Stamp Duty Land Tax (SDLT), solicitor or conveyancing fees, survey costs and related charges. For fractional investors, acquisition costs are built into the overall funding target.

Glossary

Allotment of Shares

The process by which a company (the SPV) issues new shares to investors in exchange for their investment. Once shares are allotted, the investor gains rights such as voting, dividends and a proportional claim on the SPV’s assets.

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Annual Appreciation

The percentage increase in a property’s market value over one year. For example, if a flat priced at £200,000 rises to £210,000 after 12 months, it has appreciated by 5%. For investors, appreciation is one of the main drivers of potential returns, realised when the property is sold.

Glossary

Annualised Return

Annualised return shows the steady percentage an investment grows per year, assuming compounding, even if it was held for several years. It allows fair comparison between investments of different lengths. For example, if £1,000 grows to £1,229 over three years, the annualised return is about 7.1% per year.

Glossary

Anti-Money Laundering (AML)

Anti-Money Laundering refers to the laws and procedures that prevent criminals from making illegal money appear legitimate. It includes verifying investor identity, checking the source of funds, monitoring transactions and reporting suspicious activity. In real estate investing, AML ensures all money used to buy property shares comes from legal sources.

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Appropriateness Assessment

A short test required by the FCA to check whether an investor understands the risks of higher risk products, such as fractional real estate. Passing the assessment is mandatory before being allowed to invest.

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Arrears

Arrears are unpaid rent that is overdue under a tenancy agreement. If tenants fall into arrears, it reduces rental income and can affect the dividends distributed to investors. Property managers are responsible for addressing arrears through reminders, legal notices or tenant replacement.

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Articles of Association

The rulebook of a company that sets out how it is governed, including shareholder rights, voting powers, dividend rules and the responsibilities of directors. Each SPV created for a property deal has its own articles that govern how investor rights are protected.

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Asset-Backed (Equity-backed) Investment

An investment supported by a real, physical asset. In fractional real estate, the property owned by the SPV is the asset. Unlike debt-based structures, investors hold shares in the SPV, giving them ownership linked directly to the property’s value and rental income.

Glossary

Assured Shorthold Tenancy (AST)

The most standard form of residential tenancy in England and Wales for most private lettings. It sets the tenant’s right to live in the property for an agreed period while paying rent and gives the landlord a legal framework to regain possession if required.

Glossary

Average Annual Return

Average annual return shows the simple mean of an investment’s yearly returns, without considering compounding. It is useful for a quick sense of performance but can overstate growth if returns vary. For example, if £1,000 grows +12% in the first year, +2% in the second year, and +8% in the third year, the average annual return is about 7.3% per year.

Glossary

Below-Market Value (BMV)

A property bought for less than its current market value, based on recent comparable sales or a professional valuation. Example: if a property is bought at £450,000 and the current market value is £500,000, it is £50,000 below market, i.e. 10% BMV.

Glossary

Beneficial Ownership

The person who ultimately owns or controls an asset, even if it’s held through a nominee or another entity. In UK company records this links to the “person with significant control” (PSC) regime.

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Board Resolution

A formal decision of a company’s directors recorded in minutes or passed in writing. In an SPV, resolutions authorise actions such as acquisitions, contracts or dividend declarations.

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Break Clause (tenancy)

A clause that allows the landlord or tenant to end a tenancy early by giving notice under the terms of the agreement. Breaks can affect cash flow forecasts and should be factored into yield assumptions.

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Build-to-Rent (BTR)

Homes built specifically to be rented long-term and professionally managed, rather than sold. Returns are driven by occupancy, rents and operating costs.

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Building Regulations

Legal standards for design and construction covering safety, structure, energy efficiency and accessibility. They are separate from planning permission; some projects need both.

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Buildings Insurance

Insurance that covers the structure and fixed parts of a home (walls, roof, fitted kitchen/bathroom). In flats, the freeholder usually arranges the building’s policy and recovers the cost through the service charge.

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Buy-to-Let (BTL)

Buying a property with the intention of letting it out rather than living in it.

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Buyer’s Premium (auctions)

An additional fee payable by the winning bidder on top of the hammer price, set in the auction’s terms. Where a deal is sourced at auction, the premium should be included in the total acquisition costs.

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Capital Appreciation

The increase in a property’s value over time, realised when the property is sold. For example, if a property is bought at £400,000 and sold five years later at £500,000, the capital appreciation is £100,000 (25% overall), which equates to an annualised growth rate of about 4.6% per year.

Glossary

Capital Expenditure (Capex)

Money spent to buy, improve or extend a property that provides benefits beyond the current year. Typical capex includes a new roof, extension or major refurbishment. It is different from routine repairs, which are incorporated in day-to-day costs.

Glossary

Cash Flow (Net Cash Flow)

The money left from rent after subtracting all SPV/property expenses paid in that period. For example, if monthly rent is £1,600 and total expenses (service charge, management fee, insurance, maintenance) are £500, net cash flow is £1,100 for that month.

Glossary

Commodity Murabaha

Commodity Murabaha is a type of Islamic financing where a financial institution buys a real commodity on behalf of a customer and sells it to them at a pre-agreed, mark-up price, which the customer then pays back over time. It creates a receivable similar to debt finance and is not used in Wahed’s equity-only model.

Glossary

Comparable Evidence (“Comps”)

Recent sales of similar properties used by valuers to estimate market value. Good comps are recent and closely match location, size, condition and tenure. This is a core part of professional valuation practice.

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Completion

The legal point when ownership transfers from seller to buyer and funds are paid. It happens after exchange of contracts; keys are usually released on completion day.

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Completion Statement

A financial breakdown from the conveyancer showing the purchase price, taxes, fees, apportionments and amounts already paid or still due on completion.

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Contingency Fund (Reserve)

A cash buffer set aside by the SPV for unexpected items, for example urgent repairs or short rental voids.

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Conveyancing

The legal process of transferring property ownership. A solicitor or licensed conveyancer handles contracts, searches and the movement of funds, then registers the new owner with HM Land Registry.

Glossary

Cooling-Off Period (FCA)

For first-time investors in certain high-risk investments, firms must wait at least 24 hours before allowing investors to invest. The 24-hour period starts when you complete your appropriateness questionnaire and only after it ends you may proceed to invest.

Glossary

Council Tax

A local tax charged by councils on residential properties in England and Wales. Each home is placed in a valuation band and the council issues a bill for that dwelling. Liability usually sits with the people living in the property under a single tenancy, but the owner is liable when the home is vacant or when it is let as an HMO with separately rented rooms.

Glossary

Crowdfunding

Raising capital by pooling investments from a large number of investors online, who contribute a relatively small amount. In real estate crowdfunding, investors buy shares in an SPV that owns the property; each investor receives shares in proportion to their investment, giving them a stake in the property’s rental income and value appreciation.

Glossary

Debt

Money borrowed that must be repaid with interest and usually secured against the asset.

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Deferred Maintenance

Repairs or replacements that have been delayed, creating a backlog (for example, worn carpets or an ageing boiler). Deferred maintenance can affect capex planning and future cash flow.

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Deposit

Money held as security against tenant damage or unpaid rent. In England and Wales, deposits must be protected in an approved scheme and returned at the end of the tenancy minus any agreed deductions.

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Deposit Protection Scheme (DPS)

An approved scheme that safeguards tenancy deposits and helps resolve end-of-tenancy disputes. Using a scheme is required where deposits are taken.

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Dilapidations

Tenant breaches relating to the condition of a property at the end of a lease, often involving repair, redecoration or reinstatement. Costs reduce net income if not recoverable from the tenant.

Glossary

Discounted Cash Flow (DCF)

A valuation method that estimates what a property or project is worth today by projecting future cash flows and discounting them back at a chosen rate. Useful for comparing deals with different timelines.

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Diversification

Spreading investments across multiple properties or locations to reduce the impact of any single asset’s performance on your overall returns.

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Dividend

A payment from the SPV’s profits to its shareholders, usually funded by net rental income after costs. The number of shares you hold determines your share of the dividend.

Glossary

Dividend Yield

The annual dividends you receive, divided by the value of your investment, shown as a percentage. If you receive £60 in dividends on a £1,200 holding, the dividend yield is 5%.

Glossary

Due Diligence

Detailed checks carried out by the investment team before a property is listed on the platform, to confirm the asset’s value, risks and key assumptions. This typically covers title and ownership, leases and tenants, building condition and surveys, insurance and service charges, valuation comparables and financial modelling, plus a Shariah compliance review.

Glossary

ERV (Estimated Rental Value)

The market rent a property could reasonably achieve at the valuation date, based on comparable evidence and typical terms. ERV is used to underwrite deals and to compare with the current passing rent.

Glossary

Energy Performance Certificate (EPC)

A government-required rating of a property’s energy efficiency from A (most efficient) to G. An EPC is needed when a property is built, sold or let and can influence refurbishment plans and running costs.

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Enquiries

Questions raised by the buyer’s solicitor before exchange to clarify title, leases, consents, warranties, fixtures and ongoing costs. Clear responses reduce legal and operational risk for the SPV.

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Environmental Search

A conveyancing search that screens for risks such as contaminated land or flood risk at or near the property. Findings can affect insurance, refurbishment plans and valuation assumptions.

Glossary

Equity Multiple

The equity multiple is the ratio between the total cash received from a property investment and the initial equity contribution. For example, if you invest £2,000, receive £400 in dividends over five years and £2,200 when the property is sold, your total cash back is £2,600. EM = £2,600 ÷ £2,000 = 1.3x. which means you got back 1.3 times your original investment (30% more).

Glossary

Equity-Based Model

An investment approach where investors buy shares in an SPV that directly owns the property, with no interest-bearing debt. Returns come from rental income (paid as dividends) and any capital appreciation at exit.

Glossary

Exchange

The stage in a property purchase when buyer and seller sign and swap binding contracts and a deposit is paid. Completion follows on the agreed date when ownership transfers.

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Exit

The sale of the property and winding-up step for the SPV at the end of the holding period. Investors receive their share of the exit proceeds after costs.

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Exit Proceeds

The money available to distribute to shareholders after a sale, calculated as sale price minus selling costs and any remaining liabilities. Distributions are proportional to each investor’s shareholding.

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Expense Ratio (Operating Expense Ratio)

Annual operating expenses divided by gross rent, shown as a percentage. Example: if gross rent is £24,000 and expenses are £6,000, the expense ratio is 25%.

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FCA (Financial Conduct Authority)

The Financial Conduct Authority (FCA) regulates the financial services industry in the UK. Its role includes protecting consumers, keeping the industry stable and promoting healthy competition between financial service providers.

Glossary

Fees and Costs

The charges associated with sourcing, buying and running the property and the SPV. Typical items include acquisition costs, legal and conveyancing fees, platform or administration fees, property management, insurance, service charges and maintenance. Returns shown to investors are calculated after these costs.

Glossary

Fire Risk Assessment (FRA)

A review of fire hazards and safety measures for a building, required for most residential blocks. Findings can affect insurance, compliance work and operating budgets.

Glossary

Fractional Ownership

A model where many investors own a single property indirectly by buying shares in a special purpose vehicle (SPV) that holds the asset. Each investor’s shareholding sets their proportion of rental income and their share of any gain at sale. Example: if an SPV has 100,000 shares and an investor owns 1,500 shares, they hold 1.5% of the deal.

Glossary

Freehold

A form of property ownership where the owner holds the land and the building outright, subject to planning and legal restrictions. In flats, the building is usually freehold while individual apartments are held on leasehold.

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Fully Funded

The point at which an investment round reaches its funding target and no further subscriptions are accepted. After being fully funded, the deal proceeds toward completion and share allotment.

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Funding Target

The total amount of money required to be raised in order to complete the purchase of the property. Example: a £480,000 house with £20,000 acquisition costs may have a £500,000 funding target.

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Governance

The rules and oversight that guide how an SPV is run, including directors’ responsibilities, shareholder voting, articles of association, reporting and Shariah oversight where applicable.

Glossary

Gross Rent

Total rent received before any costs or fees. Gross rent is the starting point for calculating net income and yields. For example, if a property is rented for £2,000 per month, the annual gross rent is £24,000.

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Gross Yield

Projected annual percentage return before deducting any expenses (e.g. management fees, maintenance). For example, if a property is priced at £350,000 and rented for £24,000 per year, the gross yield is 6.8% (24,000 ÷ 350,000).

Glossary

Gross-to-Net (Income)

The movement from gross rent to net income after deducting operating costs such as management fees, service charges, insurance, maintenance and voids. Understanding gross-to-net helps explain why net yield is lower than gross yield.

Glossary

Ground Rent

A periodic payment due from a leaseholder to the freeholder under a long lease. For an SPV that owns a leasehold flat, ground rent is an operating cost and is separate from the service charge.

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Guarantor

A person who agrees to pay the rent or other tenancy liabilities if the tenant does not. Letting agents may require a guarantor to reduce arrears risk.

Glossary

Guide Price (Auctions)

An indicative price set by the auctioneer to guide bidders. It is not a formal valuation and the final sale price can be higher or lower.

Glossary

HM Land Registry (HMLR)

The government register of property ownership and interests in England and Wales. Searches and registration with HMLR confirm the SPV’s legal title.

Glossary

HMO (House in Multiple Occupation)

An HMO is a property rented out by at least 3 people who are not from 1 ‘household’ (for example a family) but share facilities like the bathroom and kitchen. It’s sometimes called a ‘house share’.

Glossary

HMRC (tax authority)

His Majesty’s Revenue and Customs, the UK tax authority. It administers taxes relevant to property transactions and ownership, such as Stamp Duty Land Tax and corporation tax for SPVs.

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Halal Investing

Investing that follows Islamic principles by avoiding interest, excessive uncertainty and prohibited sectors. In our model, investors buy equity in an SPV that owns the property with zero debt.

Glossary

Holding Costs

The ongoing costs of owning the property during the holding period, such as service charges, insurance, management, maintenance, ground rent and council tax during voids.

Glossary

Holding Deposit

A holding deposit, usually up to one week’s rent, reserves a property before the formal tenancy starts. It must be refunded or transferred to the tenancy deposit under conditions set by law.

Glossary

Holding Period

The planned length of time we intend to hold the property before aiming to sell and distribute proceeds. It sets how long investors should be prepared to stay invested and when an exit may be considered.

Glossary

House Price Index (UK HPI)

The official monthly measure of UK residential price changes. It uses actual registered sales (cash and mortgage) to publish average prices and monthly/annual change, often down to local authority level.

Glossary

Housing Health and Safety Rating System (HHSRS)

A framework used by local authorities to assess housing hazards and require improvements where needed. It is relevant for landlord compliance and may influence refurbishment plans and budgeting.

Glossary

Ijarah (Lease)

An Islamic lease structure where one party (lessor) leases a tangible asset or property to another party (lessee) for an agreed period of time and at an agreed rental price.

Glossary

Illiquidity

The difficulty of converting an investment into cash quickly. Fractional property shares are typically held until exit, so investors should be prepared for a multi-year hold.

Glossary

Indemnity Insurance

An insurance policy taken out on completion to cover a specific legal risk (for example, missing building- regs sign-off). It protects the owner/SPV against losses from that defect.

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Independent Valuation

A valuation prepared by a qualified valuer to professional standards, used to assess fair market value for purchase or review.

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Inflation

The general increase in prices over time. Inflation can lift rents and nominal property values, but also increases costs such as maintenance and insurance.

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Inspection

A scheduled visit to check condition, safety and compliance during a tenancy, used to plan maintenance and protect rental income.

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Inventory

A written and photographic record of a property’s condition and contents at the start and end of a tenancy. It helps resolve deposit deductions fairly.

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Investment Committee (IC)

An internal group of experts that reviews each deal’s due-diligence (valuation, legal, cash flow) and approves or rejects a deal before it is listed for investment.

Glossary

Investment Memorandum (IM)

A concise deal presentation for investors that summarises the property, structure, key metrics, sensitivity analysis, fees and costs and expected returns.

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Investment Minimum

The smallest amount an investor can invest in a deal (for example, £500).

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Islamic Finance

Islamic finance is a way of managing money and doing business while adhering to the moral principles of Islam.

Glossary

Joint Tenancy (Ownership)

A form of co-ownership where two or more people own the whole property together. If one owner dies, their share passes automatically to the other joint tenants.

Glossary

Joint Venture (JV)

A deal structure where two or more parties agree to co-invest in, develop, or manage a property project under agreed terms on roles, costs, and profit share. Some fractional deals may partner with a local developer via a JV at the SPV level.

Glossary

Jurisdiction

The legal area whose laws apply to a matter. Most landlord-tenant and conveyancing terms in this glossary refer to England and Wales unless stated otherwise.

Glossary

KPI (Key Performance Indicator)

A metric used to track deal performance, such as occupancy rate, rent collection rate, net yield, expense ratio or dividend yield.

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KYC (Know Your Customer)

Identity and source-of-funds checks completed before you can invest. KYC helps confirm who you are and that investment money comes from lawful sources.

Glossary

Kafalah (Shariah-Compliant Guarantee)

A contract of guarantee where a guarantor (kafil) agrees to assume responsibility for an obligation if the primary party fails. It is conceptually similar to a tenancy guarantor.

Glossary

Key Dates

The critical milestones for a deal, such as exchange, completion, rent start date and planned dividend or reporting dates.

Glossary

Landlord

The person or organisation that owns the property that someone else pays rent to use. In our model the SPV is the landlord, and a managing agent handles day-to-day tasks.

Glossary

Landlord Insurance

An insurance policy for rented homes. It typically bundles buildings cover, landlord liability and optional loss-of-rent. For leasehold flats, the block’s buildings insurance is usually covered via the service charge; the SPV may still hold separate landlord liability or contents cover if needed.

Glossary

Lease

A legal agreement that gives a tenant the right to occupy a property for a set time in return for rent. It sets out rights, obligations and notice rules for both parties.

Glossary

Lease Term

The length of time a lease runs. In residential tenancies this often means the fixed period of an AST; in long leasehold it is the remaining years on the lease (for example, 120 years).

Glossary

Leasehold

A form of ownership where the buyer owns the property for a fixed term under a lease but not the land beneath it. The freeholder owns the land and common parts; the leaseholder pays ground rent where applicable and service charges.

Glossary

Legal Pack (Auctions)

A bundle of documents provided before an auction sale, typically including title documents, searches, special conditions, leases and an EPC. Buyers should review or have a solicitor review the pack before bidding.