Have you ever wondered how the rich got their wealth and then kept it growing? Do you dream of retiring early (or of being able to retire at all)? Do you know that you should invest, but don’t know where to start?

If you answered “yes” to any of the above questions, you’ve come to the right place! The world of finance can be extremely intimidating, but we firmly believe that the best investments are those that are engaging, compelling and of course, highly profitable. You don’t have to invest your hard-earned capital in products that you don’t understand – after all, no-one is in a better position than you to know what is best for you and your money.

UPI has an ethos of sourcing the very best and most valuable real estate investment opportunities and making them accessible to retail investors by keeping entry levels as low as possible. That means you can invest as much or as little as you feel comfortable with and stack the building blocks of your wealth in your own time.


Absorption rate

Absorption rate can be divided into gross absorption and net absorption. Gross absorption refers to a measure of the total square feet leased over a specified period, with no consideration given to space vacated in the same geographic area. Net absorption equals the amount occupied at the end of the period minus the amount occupied at the beginning of the period.

Acceleration (relating to loan payments)

The process whereby a loan is declared due and payable prior to its scheduled repayment date, usually following the occurrence of an ‘event’ of default.


Authorized investment funds: Tax-exempt unlisted UK funds


Alternative Investment Market of the London Stock Exchange


Amortisation refers to the spreading out of expenses over a specific period of time. In real estate, amortisation can refer to paying of debt (such as mortgage or other type of loan) with a fixed repayment schedule in regular instalments over a period of time. In contrast to repaying interest-only loans, a loan featuring an amortisation schedule requires regular monthly payments that contribute not only towards interest, but toward principal as well. With an interest only loan, principal is repaid fully at the end of the loan period and a borrower makes interest only payments over the loan period.

Annual Percentage Rate (or APR)

The APR is the actual effective rate of interest charged on a loan expressed on a yearly basis and represents the full cost of all elements associated with obtaining this loan. This standardised computation provides borrowers a bottom-line number they can compare to rates offered by other loan products.


An appraisal is the evaluation of a property to determine its price. Property is evaluated or appraised usually by an RICS-approved surveyor and based on previous sales or comparable properties.


Appreciation relates to the increase in the value of a property or an asset, such as stocks, bonds or currency holdings over time. For real estate, appreciation usually refers to an increase in value of a property net of any physical improvements to the property.

Appreciation is the most common source for real estate profit, and is only realised through selling or refinancing a property.

Appreciation potential refers to the possibility or probability that a real estate investment will increase in value during the holding period. The opposite of appreciation is depreciation, which is a decrease of value over time.


Assignment is the process by which a right or contract is transferred from one party to another.

Mortgages and leases can be assigned contracts.

Authorised Investment Fund (AIF)

Tax-exempt unlisted UK funds

Averaging method

A technique used to forecast data by reducing or cancelling the effect of random variation in past data to reveal more clearly the underlying trend, seasonal and cyclical components. For instance, an averaging method is used to forecast next period‘s vacancy rate by averaging vacancy rates in the previous years.

Base rate (in lease terminology)

This refers to an amount that is usually used as a minimum, or initial, rent. Depending on the lease provisions, it may change over the term of the lease. In commercial properties, the base rent is the minimum due each month, with extra payments due based on, for instance, percentage of sales.


The total amount paid for a property, including equity capital and the amount of debt incurred.

Basis Point

A basis point, or bp, is a common unit of measure for interest rates and other percentages. One basis point is equal to 1/100th of 1%, or 0.01% (0.0001). Basis points are used to measure a change in financial interest, often less than 1%. For instance, an increase of 30 bps in interest rates means a bump of 0.3%.

Break-Even Point

This is the point at which the income from sale of a product or service equals expenditure. For real estate, break-even refers to a stage at which the next cash flow becomes positive (gross income is equal to normal operating expenses, including debt service).

Bridging Loan

A bridging loan is a loan for a short duration of time. It can be used when one is purchasing one property but is dependent on the equity from another property that has not yet been sold. Once the property is sold then the bridging finance is repaid.

Buy/Rent Threshold

Buy/rent threshold refers to the point at which, as a result of market conditions there is a shift of expenditure away from owner-occupied housing to the rental housing market or vice-versa.

Capital Gain

This refers to an increase in the value of a capital asset. A capital loss is incurred when there is a decrease in the capital asset value compared to an asset’s purchase price. A capital gain is realised when an asset, such as property is sold and usually results in capital gains taxes paid. Capital gain is usually taxed as varying rates depending on investment maturity and local tax legislation.

Capital Improvement

Capital improvements (or capital expenditures) are expenses which aim to add value to a property, adapt the property to new uses, or prolong the life of a property. Maintenance expenditures, on the other hand, are typically routine fixes.


Capitalization (Cap) Rate

A capitalisation rate (or “Cap rate”) is an estimate of an investor’s potential return on investment and is often used as a starting point to compare opportunities. It is calculated by dividing yearly income the property will generate by total value of an investment (Cap rate = Yearly Income/Total Value). Other factors, however, such as the growth or decline of the potential income, the increase in value of the property, need to be taken into account to make a fully informed decision when considering investment opportunities.

Cash Flow

Cash flow is the income produced by an investment property after deducting operating expenses and debt.

Cash-on-Cash Rate

It is a basic calculation to estimate the return from an asset that generates income. The cash-on-cash rate is calculated as cash flow before taxes divided by the initial equity investment.

Common Equity

Common equity refers to a measure of equity, which takes into account common stockholders and disregards preferred stockholders. Common equity is calculated as shareholders’ equity minus preferred equity. In real estate and when making other investments, common equity stakeholders receive proceeds after debtors and preferred equity stockholders.

Comparables (Comps) or Comparative Market Analysis

Comps are used in assessing or establishing the fair market value of a property. Comps usually refer to another property which has been sold recently that is similar in size, condition, location and other features to the property being evaluated.

Consumer Price Index

CPI is an index indicating the change in prices of various commodities and services, providing a measure of the rate of inflation.

Cost Approach

In real estate, it is an appraisal method for estimating the value of properties that have few, if any comparables (please also see ‘comparables’). The process usually involves evaluating the costs of building a property exactly like the subject.


Debt refers to amount of money borrowed by one party from another, under the condition that it is to be paid back over a debt instrument’s lifetime and at maturity. Bonds and loans are examples of debt products. In real estate, debt is senior relative to equity investments, which means that debtors or creditors are first in line to receive payments resulting from, and in the event of, a liquidation. Debt service refers to the cost of carrying a loan, usually through monthly payments, including the payment of interest and principal.

Companies with high debt/equity ratio are generally considered more risky to both creditors and investors. Debt financing requires debt servicing or regular interest payments, and can be a more expensive form of financing than equity financing.


Debt-to-Equity Ratio

The debt-to-equity ratio is a measure of company’s financial leverage and indicates the proportion of shareholders’ equity compared to debt used to finance company’s assets. In other words, the ratio shows the percentage of company financing that comes from creditors and investors – a high debt/equity means that a company high usage of creditor financing (i.e. bank loans) is used to finance growth than investor financing.

Debt-to-Income Ratio or Debt-Service Ratio

The debt-to-income ratio is the percentage of a borrower‘s monthly payment obligation on long-term debts divided by gross monthly income. It is also known as the ‘bottom ratio’.


In real estate, ‘development’ refers to the building of a new structure, or improving existing structures of a property with a view to increase its value. A real estate developer may be an individual, but is often a partnership or a corporation.

Discount Rate

This is the percentage rate at which money or cash flows are discounted. The discount rate reflects both the market risk-free rate of interest and a risk premium.


Distributions of capital gains or income refer to payments made to investors periodically during the year.

Due Diligence

Due Diligence refers to an investigation or audit of a potential investment. Due diligence process involves reviewing financial records plus any other aspects deemed material to the potential investment.

Efficiency ratio

Efficiency ratios are typically used to analyse how well a company uses its resources. For real estate properties, efficiency ratio frequently refers to the relationship of useable area (please also see useable area) to rentable area on a given property. Efficiency % = useable square feet/rentable square feet. Efficiency ratio can also be referred to as add-on factor or load factor.

Electronic Signature

An Electronic Signature or e-Signature is an “electronic sound, symbol, or process, attached to or logically associated with a contract or other record and executed or adopted by a person with the intent to sign the record.”*

* As defined in Uniform Electronic Transactions Act (UETA).


Equity represents an ownership interest in an asset. Equity investments in real estate carry greater amounts of risk compared to debt. However, they usually allow investors to gain from unlimited upside increase in the value of the property. Debt, however, has a fixed principal amount and is limited in its upside potential. Please also see “common equity” and “preferred equity” definitions.


A state where consideration, benefits, legal rights, document, or a sum of money is held by one person in trust for another, for the purpose of assuring performance under an agreement. Normally in a residential real estate sale, the attorney for the seller is the escrow agent for the deposit money securing the deal until closing. The money is held in an escrow account.


EURIBOR refers to the rates offered to banks on euro interbank term deposits, considered among the most important in the European money market.

Fair Market Value

The fair market value is the price for property agreed upon between a buyer and seller in a competitive market.

Feasibility analysis

An analysis and evaluation of a proposed project to determine if it is technically feasible, will be profitable and satisfy all the objectives set forth by the parties involved (including owners, investors and developers). Feasibility analysis is almost always conducted real estate property developments.

Financial Conduct Authority

The FCA (Financial Conduct Authority) is the financial regulatory body in the UK. It operates independently of the UK government.

Financial leverage

Financial leverage refers to the degree to which a company uses debt and preferred equity in its capital structure – the more debt financing a company uses, the higher its financial leverage.

Financial risk

Financial risk usually refers to an uncertainty in an investment’s ability to return funds invested and the potential for financial loss.

Free Cash Flow (FCF)

Free cash flow (FCF) is a measure of how much cash a business generates after accounting for capital expenditures such as buildings or equipment. In terms of real estate, free cash flow is a measure of a property’s ability to generate cash after setting aside reserves for capital expenditures such as future development, tenant improvements, and leasing commissions.

Gross Lease

A gross lease is a lease in which the lessor pays all costs of operating and maintaining the property, including property taxes.

Hard Asset

A tangible and physical item or object of worth that is owned by an individual or a corporation. Hard assets refer to such items as buildings, cash, gold and other tangible assets. Opposite to hard assets are intangible assets, such as a patent or goodwill. When calculating a company‘s intrinsic value, analysts derive company‘s underlying value from the value of its hard assets.

Income capitalisation approach

Income capitalisation is a method used to estimate the value of an income-producing property by converting net operating income into a value. The cap rate is divided into the net operating income to obtain the estimated value. Value = net operating income/capitalization rate.


Instalment Sale

An instalment sale is a property sale in which the purchaser pays the purchase price over a period of years. The seller recognizes gain for tax purposes by the proportion of the profit (determined by the profit divided by the nest sales price of the asset) received on each payment as it is received.

Internal Rate of Return (IRR)

Internal Rate of Return (IRR) measures the profitability of an investment – the higher a project‘s internal rate of return, the more desirable it is to undertake the project. IRR is calculated as the discount rate that makes the net present value of cash flows of the project equal to zero.


Stands for “London Interbank Offered Rate“, and is the average yield of interbank offered rates for one-year US dollar-denominated deposits in the London market. LIBOR is a common index used as a benchmark for adjusting mortgage interest rates in adjustable-rate mortgages.

Liquidation value

This is the likely price that a property would bring in a forced sale. Used when a sale must occur with limited exposure time to the market or with restrictive conditions of sale.

Loan-to-Cost Ratio (LTC)

A ratio used in commercial real estate construction to compare the amount of the loan used to finance a project to the cost to build the project. A high LTC ratio represents increased the risk of providing construction finance. The loan-to-value ratio compares the amount of the loan to the fair-market value of the project.

Loan-to-Value Ratio (LTV)

This refers to mortgage finance. Typically, assessments with high LTV ratios are generally seen as higher risk and, therefore, if the mortgage is accepted, the loan will generally cost the borrower more to borrow, or he or she will need to purchase mortgage insurance.

LTV is calculated as Mortgage amount/Appraised Value of the Property.


The monthly charged levied on owners by a cooperative corporation to cover the building‘s operating costs, real estate taxes, and the debt service on the building‘s underlying mortgage.

Market analysis

The process of examining market supply and demand conditions, demographic characteristics, and opportunities; identifying alternative locations/sites that meet specific objectives or satisfy various criteria; and assessing the financial feasibility of those locations/sites to facilitate decision making regarding the commercial potential or suitability of various locations/sites to support a given activity or use.

Market value

Market value is the most probable price that a property would bring in a competitive and open market under fair sale conditions. Market value also refers to an estimate of this price.



In real estate, the number of units in a building that have been rented out as compared to the total number of units in the building. Occupancy rates are important to real estate investors because they provide an indication of anticipated cash flows – for instance, occupancy rate of 10% indicates that only 1/10th of available space has been used. Conversely, the vacancy rate is the number of units in a building that are not rented out as compared to the total number of units in the building.

Occupancy Cost

The actual cash paid out by the tenant to occupy the space (including rent, property taxes, maintenance, etc).

Passive Loss

A passive loss is a loss generated by investment real estate when real estate is not the taxpayer‘s primary business. Loss in excess of income may not be fully recognised for tax purposes in the year it was incurred.

Phantom Gain

A sale of real estate in which income is recognised for tax purposes but no money has been received correlating to the gain amount. This can occur when the property‘s basis has been depreciated below the property‘s mortgage amount.

Potential Rental Income

The total amount of rental income for a property if it were 100% occupied and rented at competitive prices.

Preferred Equity

Preferred equity is usually considered a hybrid instrument, and is a type of stock which may have any combination of features not possessed by common stock including properties of both equity and debt instruments. Typically in a preferred equity investment, all cash flow or profits are paid back to the preferred investors after all debt has been repaid until they receive the agreed upon “preferred return.”

Preferred Return

Preferred return refers to a fixed payment received by holders of company’s preferred stock. The fixed payment is in the form of a dividend that is paid out quarterly, monthly or yearly depending on company’s policy, and will be the basis of the valuation method for a preferred share.


Pro-forma usually refers to projected financial statements or a financial model often based on past data points to predict future cash flows and total investment returns. Investors should take into account that pro-forma is an estimation as hence cannot be relied as a fact.

Probabilities and Expected Value

This is a quantifiable method of risk analysis that assigns probabilities to specific, possible investment outcomes, calculates an expected outcome for the investment based on these probabilities and measures the likelihood that actual results will differ from the expected outcome. This method of risk analysis can be applied directly to real estate investments. It also can be used in conjunction with the forecasts generated through sensitivity analyses.



Real Estate Investment Trust (REIT)

A REIT is an investment vehicle that allows investors to purchase certificates of ownership in the trust, which in turn invests the money in real estate such as buildings, land and real estate securities. REITs sell on the major stock market exchanges just like common stock


When investment real estate has been depreciated for “tax purposes“, the gain on the sale includes a “recapture” of the previously written-off depreciation as gain. In certain cases, this can result in a tax liability that exceeds the case received. See also “Phantom Gain”


The return of an investor’s principal in a fixed income security, such as a preferred stock or bond, the sale of units in a mutual fund, or the sale of property shares.

Secured Position

A secured position retains the right to foreclose on a property in the event of a default, or non-performance. Unsecured creditors do not have the right to foreclose on the property, and therefore have less collateral backing their investment claim.

Senior Debt

Senior debt is a loan that a company must repay first if it goes out of business. Senior debt holders are most likely to be repaid in distress, followed by junior debt holders, preferred stock holders and common stock holders. Senior debt thus is considered lower risk and carries a relatively low interest rate.


Underwriting process involves the satisfactory review of the issuers property appraisal and examination of the borrower‘s ability and willingness to repay the debt and sufficiency of collateral value of the property.


Yield refers to return on investment. The return could be in interest or a dividend received from an investment and is usually expressed as a percentage based on the investment’s cost, face-value or current market value.