Fund manager Managing Partners Limited (MPL) has announced that the typical yield from its portfolio of residential properties in its British Property Opportunities Fund has increased from 7.8% in April last year to 9.2% today. This is bucking the market trend of falling market rates. Furthermore, 74% of its property portfolio is successfully rented out with only one tenant three months or more behind with their rent.
Jeremy Leach, Managing Director, MPL said: "Many homeowners who cannot sell their properties are now trying to rent them out and this has had a negative impact on rental yields. Indeed, rental asking prices are down by as much as 6% in some parts of the country. However, there are things you can do to make your property more attractive in the rental market and in doing so, increase your occupancy levels and rental yields. In recent months, we have placed as much focus on this as we have on identifying which new properties to buy.
"For example, before renting them out, we have ensured that all of the properties we own are in a good state of repair. We have also ensured that we have bought the right properties for the right areas. For example, buying an attractive family home is not really suitable for an area dominated by students."
MPL's British Property Opportunities Fund, which aims to take advantage of the deep discounts that are appearing in the market as a result of forced sales, is increasingly buying properties from landlords at up to 40% below their list price. As a result of these 'bargain' purchases and their strong rental yield, the fund, which was launched in February 2008, has provided a return of 9.62% in its first year.
MPL's British Property Opportunities Fund targets an annual return of 10% plus by investing in both residential and commercial property, including distressed portfolios, high yield rental units, development opportunities, leasebacks and reversionary gains schemes.
The minimum investment in the fund is £50,000, or £2,500 if an investment is made via an insurance bond or SIPP wrapper.
Source: Citigate Dewe Rogerson