Property Risk Scoring on AireVest

(High, Medium, Low Risk – What It Actually Means)

When you invest, the first question is not "How much can I make?" but "How much can I lose and how likely is that?"

AireVest's Property Risk Score is designed to answer exactly that – in simple, comparable terms:

Low Risk, Medium Risk, High Risk.

Each label appears clearly on the Property Detail page and in the KIIS / Investment Memo, so you can instantly see how "bumpy" the journey is likely to be before you start reading the rest of the deal.

1. What the Property Risk Score Is (and What It's Not)

What it is:

• A simple, three-step indicator of the relative risk of each property on the AireVest platform

• Based on a structured, multi-factor assessment (location, tenants, strategy, renovation intensity, exit liquidity, etc.)

• A way to compare two AireVest deals with each other – not with the whole universe of investments

What it is not:

• A guarantee of performance or protection from loss

• A personal suitability assessment or investment advice (AireVest does not give personalised recommendations; investors must do their own due diligence).

Think of it as a risk label on an appliance: it does not tell you how to use it, but it tells you roughly how powerful (and potentially dangerous) it is.

2. The Three Risk Bands at a Glance

🔵 Low-Risk Properties

Typical profile:

• Prime or established neighbourhoods with strong, diversified demand

• Stable long-term rental or mixed (mid-term) strategy

• Limited or no heavy renovation; building is structurally sound and modern

• Deep resale market and relatively predictable price behaviour

What to expect:

• More stable income, lower vacancy volatility

• Lower probability of major negative surprises, but also more modest upside compared to higher-risk plays

• Suitable as "core" holdings in a portfolio, especially for first-time investors and those prioritising capital preservation

🟡 Medium-Risk Properties

Typical profile:

• Good locations with some cyclical or seasonal exposure (e.g. strong tourism, emerging districts)

• Short-term or flexible rental strategies where occupancy and pricing can fluctuate

• Moderate renovation or repositioning needed to unlock full value

• Exit market is healthy but more sensitive to macro cycles and buyer sentiment

What to expect:

• Higher projected returns than low-risk, but with more income variability

• Exposure to tourism trends, regulatory shifts or neighbourhood gentrification (both upside and downside)

• Suitable for investors comfortable with some bumps in exchange for better upside potential

🔴 High-Risk Properties

Typical profile:

• Heavy Fix n' Flip or major renovation projects; more things must go right

• Locations that are still transitioning, or with narrower buyer/tenant pools

• Strong dependence on timing (e.g. selling into a favourable market window)

• Higher exposure to regulatory, construction or market risks

What to expect:

• Highest upside potential if the business plan executes well (price uplift, yield compression, value-add)

• Higher probability of delays, cost overruns, market downturns or lower-than-expected sale prices

• Suitable only for investors who understand they can experience volatility and potential capital loss, and who treat these as the "growth" or "opportunistic" slice of their portfolio

3. How AireVest Builds the Risk Score

Each property is scored across several core dimensions, then bucketed into Low / Medium / High.

3.1 Asset Fundamentals

• Location quality (city, micro-neighbourhood, access, amenities)

• Building quality & age (structural risk, common-area condition, technical systems)

• Unit type (liquidity and depth of buyer/tenant pool in that segment)

Stronger fundamentals push a property towards Low Risk; weaker or highly specialised ones may push it towards Medium or High Risk.

3.2 Income Profile

• Rental strategy: long-term, mid-term, holiday home, or pure flip

• Tenant/guest profile (stability, seasonality, cyclicality)

• Historical or market occupancy patterns, including seasonality

Stable long-term leases in strong locations tilt towards Low Risk. Heavy reliance on short-term tourism or variable demand pushes the dial towards Medium or High Risk.

3.3 Strategy Complexity & Execution Risk

• Is it turnkey, "light value-add", or a heavy renovation / Fix n' Flip?

• Size and complexity of the Renovation Scope and budget

• Number of third parties: contractors, project managers, specialised vendors

The more the outcome depends on delivering a complex project on time and on budget, the more likely the property will fall into High Risk territory.

3.4 Exit & Liquidity Risk

• Depth of the resale market for similar properties (domestic + foreign demand)

• Likelihood of selling at or near Estimated Valuation under normal conditions

• Sensitivity to macro factors (interest rates, local credit conditions, regulatory changes)

Highly liquid, in-demand segments move towards Low or Medium Risk; niche assets or markets with thin buyer pools tilt towards High Risk.

3.5 Legal, Operational & Counterparty Risk

• Regulatory and documentation profile of the asset

• Reliability and track record of Property Managers, Project Managers and Contractors

• Complexity of any special structures (e.g. Shariah-compliant, mixed-use buildings, co-living setups)

If everything is standard, fully documented, and run by reputable partners, the property will generally lean to Low / Medium Risk. New structures, complex compliance, or unproven operators increase risk.

4. How the Score Shows Up for You as an Investor

On the Property Detail page and in the KIIS / Investment Memo, you will see:

• A clear risk label: "Low Risk", "Medium Risk" or "High Risk"

• A short one-paragraph explanation summarising why

• A breakdown of the key risk drivers specific to that property (e.g. "tourism seasonality", "heavy renovation", "dependence on single tenant", "emerging district", etc.)

Over time, as AireVest updates valuations and operating performance, the risk view may also evolve – for example, a project can move from High Risk (during heavy renovation) to Medium or Low Risk once it is fully stabilised and rented.

5. How to Use the Risk Score in Your Own Strategy

You can use the AireVest Property Risk Score to:

• Balance your portfolio: e.g. more Low and Medium Risk properties as a base, with a smaller allocation to High Risk opportunities for upside.

• Match your horizon: if you may need liquidity sooner, you might prioritise Low/Medium Risk assets in stronger, more liquid markets.

• Check alignment with the story: if a property is labelled Low Risk but the story feels speculative, dig deeper; if it's High Risk but you expected "bond-like" stability, reconsider.

But always remember:

Risk labels help you compare properties. They do not replace your own judgement, independent advice, or the detailed information in the KIIS / Investment Memo and Terms & Conditions.

In Summary

Every AireVest deal comes with a Property Risk Score: Low, Medium, or High. The score is built from a multi-factor analysis of asset quality, income stability, strategy complexity, exit liquidity and operational/legal risk. It's meant to be simple, honest and comparable across deals – a clear view of "how bumpy" each journey might be. It does not guarantee outcomes or replace your own due diligence – those stay in your hands.