How the Taylor Made Group mitigates risk

Investing with the Taylor Made Group (TMG) means we are doing all the risk analysis on your behalf. Knowing how to reduce risks when investing in property is vital to get the best possible return on investment – each and every development we commit to is put through a rigorous risk analysis.

What are the risks that we consider?

• Location
• Condition of the building
• Market conditions
• Tenants
• Business closures (commercial)

This is by no means an exhaustive list but it does highlight some of the key risks that we consider.

Some risks are worth taking, some are not. It’s all about calculating the risk/reward ratio and then going for the risks that make the most sense.

Here is what we do to ensure that risk is worth the investment:

1) Research, research, research

We have an extensive network that will inform us when an opportunity arises. From that we’ll conduct a thorough analysis of the development potential and yield. You might be surprised that very few opportunities get past this stage with TMG. We only take on developments that sit well with our company ethos and portfolio.

2) We view the opportunity in person

Each and every development can be visited several times before we decide on whether it is for us. It’s only when you see it in the flesh that we get a true understanding of the complexity, difficulties – or opportunity on offer.

3) The legalities

The gives us great insight into the potential of spaces. A commercial building may be ripe for renovation but there may be limitations on the land. Our legal team pour over the details to ensure that nothing is missed and so no costly mistakes are made.

4) Geography

Another good method for reducing risk is to develop in different geographic areas.

By doing this we spread our risk so that if one area experiences a downturn in property values, we still have investments in other areas to cushion the blow.

It’s not uncommon for one area to experience a downturn if a major local employer closes or moves from the area or if a lack of investment causes an increase in crime. For that reason, buying in different areas is very much part of our risk mitigation strategy.

5) Range of property types

From flats to houses to HMOs, there are a wide range of types of property available.

We protect you from any changes in regulations or popularity by having diversification.

For example, the rules for HMO properties regularly change but if we don’t have any then we could miss out on substantial income.

6) We develop buy to let and buy to sell

The income we create from our buy to let properties, enables us to grow our business through long term value increases. Whereas, property sales enable us to release equity and pay our investors.

Doing both enables us to better respond to changing market conditions and secure both a short and long-term income.

7) Residential and commercial

The value of residential properties and commercial properties do not always rise and fall at the same rates. Our ever-changing high streets mean that commercial properties can quickly rise or fall in value. For instance, the recent closures of stores like Debenhams can impact the value of the surrounding buildings positively or negatively. This can happen entirely independently of what the residential market is doing.

Equally, residential property can change in value based on many factors that don’t affect commercial ones.

This is why we have a combination of residential and commercial investments.

9) Our contractors

We have built up an extraordinary team of contractors who understand our high standards and quality of build. We just can’t afford to expose ourselves to the world of cowboy traders that are out there. All our contractors are expected to agree to our terms before any work is carried out, and there is a constant assessment throughout the build.

10) Market conditions

It is our job to keep our ear to the ground and continually understand the fluctuations in the economy and how that might impact on our sector.

The UK market has a great track record of growth, but, along the way, there have been numerous sudden falls in prices. We understand where average prices are at the moment and where they may might fluctuate in the months and years ahead. We will help you stay one step ahead.

Of course, predicting the future is much easier said than done but we hope it offers peace of mind to prospective investors that we understand the current factors affecting the market.

In summary, it’s never possible to completely remove all risks but we do spread our risk and mitigate as much as humanly possible so that you have peace of mind.