Property can be a brilliant way to build wealth. But the bit that trips people up is usually not the property itself. It’s the structure of the deal. The fees. The assumptions. The exit plan that exists in theory but not in real life.
So before you wire any money, sign anything, or even mentally commit, here are the five questions I think you should ask. I’ve kept it practical and a little blunt, because that’s how these conversations should be.
And yes, this is specifically about dealing with property investment companies and the way they package opportunities.
1) “Exactly how do you make your money on this deal?”
This sounds obvious, but it’s the question most people skip because it feels awkward. It shouldn’t. If you can’t clearly explain how a firm gets paid, you’re basically investing blind.
A lot of property investment companies are not just earning one fee. They can earn multiple fees at multiple stages, and each one can quietly chip away at your actual return.
Ask them to break it down like you’re five:
- Sourcing fee: Are they charging for finding the property?
- Project management fee: If there’s refurbishment, who runs it and what do they charge?
- Finance/broker fee: Are they arranging finance and taking commission?
- Lettings fee: Who finds tenants, and what’s the ongoing cost?
- Management fee: Percentage of rent? Fixed monthly amount? Both?
- Exit fee: If they resell for you, what do they take?
- Developer margin: If it’s a new build, who is the developer and what’s baked in?
Then get specific. Ask:
- “What is the total fee load in pounds, not percentages?”
- “What do I pay even if the property sits empty for 3 months?”
- “If the refurbishment runs over budget, who covers the overspend?”
- “Are any fees paid to a connected company?”
The last one matters more than people think. Some property investment companies have sister companies that do the refurbishment, the management, the lettings, the legal referrals. That isn’t automatically bad. But you need to know, because it changes incentives. To evaluate structures and risks, click here for property investment companies.
If they hesitate, dodge, or tell you “it’s all standard”, push again. A good deal survives transparency. “
2) “What assumptions are behind your yield and growth numbers?”
This is where deals often get… kind of dreamlike.
You’ll see “8 per cent net yield” and “strong capital growth forecast” and it all sounds lovely. But you need to see the working. Because yields are extremely sensitive to assumptions.
When property investment companies present numbers, ask to see:
The rent assumption
- What rent figure are they using?
- Is it based on current comparable lets, or a future estimate?
- Is it based on a specific tenant type (students, professionals, corporate lets)?
- Are they assuming a fully furnished premium rent?
Ask them to show at least 3 local comparables. Real ones. Not just “market average”.
The voids assumption
- What void period do they assume per year?
- Do they assume zero voids? Because that is basically fantasy.
- What’s the plan if tenant demand is lower than expected?
A lot of projections quietly assume full occupancy forever. Real life is messier.
The costs assumption
- Management fees: are they included?
- Maintenance: is there a realistic allowance?
- Service charge and ground rent: included or “to be confirmed”?
- Insurance: included?
- Compliance costs: gas safety, EICR, EPC upgrades?
If it’s leasehold, service charge can move. If it’s an apartment, major works can happen. If it’s an older terrace, maintenance is not optional.
The finance assumption (if relevant)
If they’re showing leveraged returns, check:
- Interest rate used
- Product fees
- Stress test rate
- Whether they assume interest only
I’ve seen property investment companies present best case mortgage assumptions as if they’re normal. They are not.
The capital growth assumption
This is the one people want to believe. But you should ask:
- What growth rate are you using?
- Why that number?
- What happens to returns if growth is flat for 5 years?
A good operator will show sensitivity tables. If rent drops 10 per cent, what happens? If interest rates rise 2 per cent, what happens? If the refurb costs go up, what happens? Learn more about financial modelling and scenario analysis for property investments.
If they can’t show downside scenarios, they’re selling you a story, not an investment.
3) “Who actually controls the asset, the bank account, and the decisions?”
This question is about structure. And structure is everything.
Some property investment companies sell you a straightforward property you own directly. That’s simple.
Others place investors into SPVs, joint ventures, fractional ownership, rent-to-rent structures, or lease agreements. Again, not automatically bad. But you must understand who has control, and who carries risk. Learn more about property investment structures and governance models.
Ask, very plainly:
- “Do I own the property on the title register at Land Registry?”
- “If not, what exactly do I own?”
- “Who signs the contracts and has legal authority to make decisions?”
- “Where does rental income go first?”
- “Who controls the bank account the rent lands in?”
- “Do I need anyone else’s permission to sell?”
- “If there’s a dispute, what is the mechanism to resolve it?”
If it’s an SPV:
- Who are the directors?
- What voting rights do you have?
- What happens if other shareholders want different things?
- Can they raise more money and dilute you?
- Can they take on debt?
If it’s a managed deal:
- Can you change the managing agent?
- Are you locked into a management contract for years?
- What are the break clauses and penalties?
Some property investment companies tie investors into long management agreements where the firm is basically paid whether you’re happy or not. You want alignment, not handcuffs.
Also ask about reporting:
- Monthly statements?
- Photos and invoices for refurb?
- Clear rent schedule and arrears reporting?
- Year end tax pack?
If they can’t produce a simple sample report, that’s a warning sign.
4) “What due diligence have you done, and what can I independently verify?”
This is where you shift from listening to checking.
A good firm welcomes verification. A bad one relies on urgency and confidence.
Ask property investment companies for a due diligence pack. Not just a one-page summary. You want things you can take to your solicitor, accountant, or just sanity check yourself.
Here’s what I’d ask for depending on the deal:
For a standard buy to let
- Title plan and tenure details
- EPC rating (and recommendations)
- Gas and electrical safety status
- Comparable rent evidence
- Local sold prices evidence
For leasehold and apartments
- Service charge history (at least 3 years)
- Ground rent terms (and review clauses)
- Managing agent details
- Any planned major works
- Building insurance details
- Fire safety documentation where relevant (and yes, ask)
For refurb or development style deals
- Schedule of works
- Itemised budget
- Contractor quotes
- Timeline
- Contingency allowance
- Warranty or guarantees if applicable
For “hands off” investments
- Management agreement
- Lettings approach, tenant selection criteria
- Arrears process
- Eviction process
- Who pays legal costs if a tenant stops paying?
Now the key part. Verification.
Ask:
- “Which parts of your numbers can I verify independently?”
- “Can I speak to the letting agent you used for rent estimates?”
- “Can I see completed case studies with addresses so I can check sold prices?”
- “Can I talk to an existing investor?”
Some property investment companies will provide testimonials that are vague, first name only, or clearly scripted. Push for real references. And if they say “privacy”, that’s fine, but then ask for anonymised data you can still verify.
Also do your own checks:
- Look up sold prices on Land Registry or portals.
- Check rental listings in the immediate area.
- Google the development name plus “snagging” or “issues”.
- Check Companies House for the company, directors, and any related entities.
You’re not trying to catch them out. You’re trying to avoid being the person who realises later that the “up and coming area” has been “up and coming” for 15 years.
5) “What is the exit plan, and what happens if things don’t go to plan?”
Every pitch has an implied exit. “Hold for 5 years.” “Sell into a rising market.” “Refinance after stabilised rent.”
But you need the explicit version.
Ask property investment companies:
- “What is the most likely exit route for this specific asset?”
- “Who is the buyer on exit? Owner occupiers, other landlords, institutions?”
- “What fees apply on exit?”
- “Is there a minimum holding period?”
- “Can I exit early if I need to?”
- “If I can’t sell quickly, what’s Plan B?”
Then ask the uncomfortable follow-ups:
If the rent is lower than expected
- Can costs be reduced without harming the asset?
- Are there alternative tenant profiles?
- Would they advise a rent cut to reduce voids?
If interest rates rise or refinancing fails
- What happens if a refinance is not available?
- Can the deal continue without refinancing?
- Do you have contingency for higher repayments?
If capital values drop
- Are you forced to sell at a loss?
- Is there any covenant that triggers action?
- If it’s a group structure, can other investors force a sale?
The “forced sale” risk is real in some pooled deals. Make sure you understand it.
A good answer sounds like someone who has actually lived through a rough patch in the market. Because they probably have. Property cycles happen.
Also, ask them to state the worst case in plain English. If they refuse, that tells you something. Serious property investment companies know that honest risk discussion builds trust.
A quick bonus: “What would make you say no to this deal?”
I like this one because it flips the script. Ask: “If I were your friend or your sibling, what would make you tell me not to do this?” The response is revealing. If they say “nothing”, that’s usually not true. Every property has trade-offs. Every deal has risk. If they can’t name any, they’re not thinking like an investor. They’re thinking like a salesperson. https://tiffanycitylighting.com/investment-property-management-what-does-it-include-for-large-australian-portfolios/
How to use these questions in a real call (without it getting weird)
You don’t need to interrogate them like a detective. Just be calm and methodical.
I’d literally say:
“I’m interested, but before I proceed I need to understand fees, assumptions, control, due diligence, and exit. Can we go through that?”
Good property investment companies will be fine with this. They might even be relieved, because it signals you’re serious.
And if they get defensive, rush you, or try to overwhelm you with jargon. That’s useful information too. It means you slow down.
Wrap up
Property investing can work brilliantly. But only if you understand what you’re buying, what you’re paying, and what you’ll do when the plan hits real life.
So before you commit, ask the five questions above. Make them answer clearly. Get it in writing where possible. Verify what you can. Sleep on it, even if they say you can’t.
That’s the difference between buying an asset and buying a promise.
And when you’re dealing with property investment companies, you want assets. Not promises.