Frequently Asked Questions
What makes Heritage Capital Different?
We offer a number of property services which include portfolio management for individuals and property companies. The entry level of investment in some of the property companies we advise is just £1,000 which is substantially lower than most and we therefore deal with a large number of clients and investors. All of our clients receive quarterly and annual reports about the market and their specific portfolios.
Do I get a choice of properties in the portfolio?
For individual clients with £250,000 or more to invest there is the option to chose the location of properties within a portfolio - although we always offer expert advice on this. However with the property companies/ funds we advise, it is possible there could be 1000 investors per company and for that reason it is impossible to offer everyone a say as to the choice of properties. Heritage Capital always advise a strategy to purchase property which offers a balance of high discount, best rental yields and best resale potential – ie: properties which offer a sound investment.
Can I come and talk to you face to face?
Clients are more than welcome to visit our offices (by appointment) to meet with their property consultant and the rest of the team. We also inform clients when we are due to attend any shows or events to ensure that those who are unable to come to our office get the chance to meet us at more accessible locations across the country.
Do I earn interest on my money?
With property investments your money does not earn interest (as it might in a savings account) as it is invested into UK residential property and becomes an asset. Once the properties have been sold, typically 3-5 years later initial investments along with any profit achieved is returned to clients. This means that your investment earns profit, not interest.
What is the level of risk?
As with any investment there are associated risks with property, however because we implement a strategy of purchasing property at depressed prices with further discount on top and selling after the market has recovered and prices have increased and properties will only have a maximum of 50% finance against them the risks are substantially reduced.
What are property funds?
Broadly there are three types of property fund. These are:-
- large listed property funds - these tend to be open ended investment companies which operate as funds. These can be accessed through funds supermarkets and the like, and tend to be listed on the London Stock Exchange;
- unregulated collective investment schemes - these are very specialist products which are not intended for the retail market and which may only usually be accessed via IFAs;
- unlisted property companies - these again tend to be smaller companies with specific investment aims.
For which type of Property Fund does Heritage Capital manage portfolios’?
Heritage Capital manage the diverse portfolios on behalf of a number of smaller unlisted property companies which concentrate on portfolios of between 3 and 12 properties which will be held for a period of 3 to 5 years. It is Heritage Capital's strategy for those companies to source properties at genuine discounts and achieve high rental yield on behalf of each property company.
How do property funds raise money?
Smaller unlisted property companies will issue Information Memorandums which contain basic information about the investment including risk factors and potential returns. Sometimes these will be addressed only to high net worth individuals and sophisticated investors and on other occasions these may be approved by an authorised person such as a stockbroker so that they can be offered to retail investors.
What is the difference between close ended and open ended?
Open ended funds tend to take money at any time, whereas close ended funds tend to raise funds over a limited period of time (for example 3 to 6 months) to take an investment pool which is then used, often in conjunction with bank debt, to buy properties.
How do I get a return from funds?
Listed funds provide a return through the fund being managed so that it's net asset value increases and sometimes these funds will pay dividends. Unlisted funds tend not to pay dividends, and your money will often be locked up for a longer period of time, but the idea behind unlisted funds is that the returns should be higher in the long run. However, it should be noted that unlisted funds are generally considered to be riskier than listed funds as your money is locked up and they do not have such a wide spread of property investments.
If I do buy investments in listed or unlisted funds do I become liable for anything?
Generally the answer to this is no. Once you have made your investment into any sort of fund, because that fund has its own legal personality it is separate from you and while your investment is not guaranteed you will not be asked to contribute anything further if the fund doesn't work. Some types of partnership do not work on this basis so you do have to be careful before you make any investment.
Can Heritage Capital advise me on buying investments in either close ended or open ended funds?
No, because we are not authorised by the FSA we cannot do so. You should speak to an IFA if you have any questions about investment in either listed or unlisted property funds.
