New research shows that an average of £1.2 million is being spent by investors to purchase full property portfolios.
These ready-made property packages come with an average of 6.4 bedrooms, that’s an average cost of £196,000 per bedroom. This offers an average yield of 2.9% on these pre-packaged portfolios.
Octane Captial reveals that investors are leaning towards full portfolios that have been sold as a bundle because they offer better value for money than individual homes that are pieced together over time.
The specialist property lending experts break down which parts of England are the most active when it comes to full property portfolios.
Where investors are purchasing property portfolios
England's capital is the most active area for pre-made property portfolios. London is home to the highest price per bedroom at an average of £556,000 per room. These are estimated to have an average yield of 1.4% and account for 18% of the national total.
Investors interested in ready-made property portfolios also flock to the West Midlands. Although these cost a hefty £1,027,722 on average, they contain around 5.1 bedrooms worth around £201,000 per room.
Those hoping to make a bit of a saving can look no further than the North West of England where portfolios with an average of 9.7 bedrooms (£104,000 per room) can invest in a portfolio for just over £1 million.
In the West Midlands, investment portfolios cost an average of £1,027,722 and contain an average of 5.1 bedrooms, which works out as £201,000 per room, and in the South East, investors pay £1.4 million for an average of 7.7 bedrooms, equivalent to £178,000 per room.
The most affordable investment portfolios can be snapped up in England’s North East where investors are paying a little over £1 million for portfolios that contain an average of 9.7 bedrooms which works out at just £104,000 per room. As a result, the North East is home to the highest yield for a ready-made investment portfolio at 4.5%.
In Yorkshire & Humber the average portfolio has the second highest average yield at 4.4%.
Chief executive officer of Octane Capital, Jonathan Samuels, explains: “Portfolio investment offers advanced investors a far quicker path to scaling their portfolio and, as is often the case when buying in bulk, doing so can result in securing a greater level of value per unit.
"But it’s also the convenience of this approach that appeals to many, allowing them to acquire multiple properties in a single transaction."
"Doing so also allows them to complete any modernisation and to bring these homes to market within a similar timeframe, so that they can start to earn a consistent return across the board."
"Of course, not all investment portfolios are created equally and investors should ensure they carry out the proper due diligence on each and every property to avoid purchasing a bad batch."
"Even a singular bad apple amongst an otherwise strong portfolio can tip the scales of profitability in the wrong direction.”