Portfolio Property is real estate that is completely developed, built and already in use. A new construction on the other hand, is a newly developed and not yet inhabited building. It can be both residential as well as commercial.
MaIN CHARACTERISTICS OF A PORTFOLIO PROPERTY
Ideally, all or most residential and commercial units are rented out. The value of the real estate can be determined accurately since all of the building’s works have been completed. The only remaining factors are possible loans, calculable expenses and maintenance costs. These can be offset with the rental income for a monthly profit, which in turn will determine the real estate value. With an increasing occupancy rate the profit and value of the real estate will also increase.
Debts to capital providers are due to financing the real estate development. Most property developers or project promoters do not have adequate equity to fully finance the development of the property unaided. Loans will be extinguished by the monthly rental income.
THE OCCUPANCY RATE OF A PORTFOLIO PROPERTY
The actual/target value for rental income can be determined with the help of the property’s occupancy rate. The target value indicates the rental income once all units are rented out. The actual value indicates the rental income based on the current occupancy rate. The more units are rented out, the closer will the actual value come to the target value.
THE VALUE OF A PORTFOLIO PROPERTY
In addition to the target rental income and the costs of the loans, there are additional factors determining the market value of a portfolio property. Factors such as location, state of the building, possibilities of use all effect the real estate’s market value. Appraisers can determine the value. This market value reflects the price in case of the real estate’s sale.
INVESTING IN A PORTFOLIO PROPERTY WITH EXPORO
In addition to investment in real estate under construction, you can also invest in exclusive portfolio property in Germany with Exporo. Since 2014 the company has successfully raised more than € 60 m for 47 real estate projects in Germany and already paid back almost € 11 m to their crowd investors. The Investment Rating is Exporo’s newly developed and standardized risk assessment systems. Investors are now able to compare projects with each other according to their investment rating. Prior to enabling investment in portfolio properties, Exporo will assign all projects according to their key data into a specific Exporo investment rating. In addition to our own experts, we also rely on the experienced team headed by Nick Brand, providing Exporo with advice and assistance for the valuation of property and any other questions.