Where property investors buy properties in bulk

Experienced investors are spending big on full portfolios rather than individual properties, with the North East proving to be a particularly profitable region.

According to property firm Octane Capital, which found that investors are spending an average of £1.2 million on these portfolios, typically sold as a job lot.

These ready-made property packages come with an average of 6.4 bedrooms, meaning they cost an average of £196,000 per bedroom. This amounts to an average yield of 2.9% on these ready-made portfolios.

Jonathan Samuels, chief executive of Octane Capital, said: “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.”

While it’s the costliest region, London is the most active market for ready-made property portfolios, accounting for 18% of the national total.

Indeed, in the capital the price per bedroom comes to £556,000, so this is only for wealthier investors.

The North East is the most profitable area, where investors typically pay just 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 region offers the highest yield for a ready-made investment portfolio at 4.5%.

Unfortunately for aspiring buyers however there are few portfolio investments available in the region, as the North East accounts for just 2% of the national total.

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.

In Yorkshire & Humber the average portfolio costs £1.1 million for an average of 10.1 bedrooms meaning each room costs £106,000, with the second highest average yield at 4.4%.

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