"Most investors start their journey with a single buy-to-let property, but for those who are looking to take the next step, ready-made portfolios can be the perfect option as much of the groundwork has already been done"
- Jason Ferrando - easyMoney
Research by easyMoney reveals that London is the hotspot for investors who are looking to purchase ready-made property portfolios, but the area with the highest yield potential is found elsewhere in the country.
easyMoney has looked at the current availability of ready-made property portfolios for sale in Great Britain; analysing where the highest proportion of portfolios are located; the average number of properties contained within each portfolio, the average sale price, and the subsequent rental income potential across all British regions.
Ready-made property portfolios are usually targeted at advanced, experienced investors. They are often put together and placed on the market by other investors and provide purchasers with the chance to buy multiple assets in a single transaction. It is common for the buyer to go on to collect rental income from the portfolio.
easyMoney’s analysis reveals that there are currently 884 portfolios for sale in Great Britain at an estimated average price of £1.2 million.
The average number of bedrooms per portfolio is 6.9, which means the average price per bedroom is £180,429.
If a purchaser is hoping to generate rental income from their new portfolio, they can expect an average yield of 3.4% based on an average monthly rental value of £507 per bedroom creating a total portfolio income of £3,494 per month.
A regional analysis shows that London is Britain’s hotspot for ready-made portfolios with 166 currently for sale. This is equivalent to 19% of the national total.
However, the nation's capital is likely the reserve of ultra-wealthy buyers due to an average portfolio price of almost £2 million (£1.97m), making it by far the most expensive region in the country.
With an average portfolio size of 4.9 bedrooms - the smallest of all regions - the expected rental yield for London is just 2.1%. This is second only to Wales (2%) as the lowest in Britain.
In the South East, the average portfolio costs £1.4 million; in Scotland, the price is £1.2 million; and in the East of England it’s £1.1 million.
The most affordable region is the East Midlands where portfolios cost an average of £879,012.
This buys investors an average of 9.2 bedrooms which is the second-most of all regions, and results in an expected rental yield of 5.7% which is, again, the second-highest across all regions.
The only place where yields are higher is Yorkshire & Humber where an average portfolio size of 11 bedrooms and an average purchase price of £898,415 means landlords can expect impressive yields of 6.1%.
Jason Ferrando, CEO of easyMoney says: “Property investment is extremely popular due to its reliable returns over the long-term and the repeated monthly rental income available in the short-term.
"Most investors start their journey with a single buy-to-let property, but for those who are looking to take the next step, ready-made portfolios can be the perfect option as much of the groundwork has already been done, and it’s much faster than building a portfolio piece by piece.
"Of course, buying a portfolio requires the investor to have large amounts of money up-front, and the ongoing requirements after purchase can be a lot for some investors to deal with, forcing landlords to work very hard for their monthly yield.
"That’s why lots of property investors are instead choosing to put their money into Innovative Finance ISAs (IFISAs) which essentially enable investment across a wide range of property projects and opportunities while maintaining a hands-off approach.
"Whatsmore, the returns available from IFISAs are often as good as, if not superior, to the rental yields one can expect to get from managing a full portfolio by themselves.”