Your Complete Guide to Mortgaging Your Property Portfolio

When it comes to building up a property portfolio there is lots to learn, especially if you’ve never managed one before. The first thing you need to understand is why you would need a property portfolio, and that’s if you have more than one property. Essentially, a property portfolio will tie together all of your mortgages into one easy-to-manage framework making repayments much easier to manage. Here’s absolutely everything you need to know:

Where to Start?

So what kind of property can I include in portfolio commercial mortgages? Anything that isn’t a residential property can be included in this type of portfolio, from buy-to-let flats, to office space and even factories. There are several different types of property portfolios available to choose from, and while some may favour having a single type of property included, generally they will be more than happy to include all types of property.

Buy-to-Let Portfolio

Even if you only have one or two buy-to-let properties under your belt, a portfolio can give you more flexibility in repayments and can make your financing much easier. The larger your buy-to-let portfolio is, the easier it will be to manage as you mortgage the portfolio rather than each individual property, allowing you to shift finances around to meet the repayments.

Commercial Property Portfolio

If you own many shops and office premises, then a commercial property portfolio can help to bring all your finances together. Even if the properties you own are on different ends of the country, a commercial property portfolio can tie together your mortgages and make it much easier for you to make cash-flow projections based on the repayments and rental yields.

Mixed Property Portfolio

You don’t have to take out a specialist portfolio mortgage for multiple properties – it is possible to have mixed portfolios which cover all types of property. This is ideal in situations where you have your hands in many pies, as you can include all your investment properties under one easy-to-manage portfolio.
It is even possible to have a property portfolio that includes both local and overseas investments – to find the best mortgage for your needs talk to a portfolio broker. They will have an in-depth knowledge of the market and can help you make the most out of your investment.

Choosing the Right Mortgage Portfolio

It is essential that you choose a commercial mortgage portfolio that is well suited for your needs. To do this you will need to ensure that you correctly balance your portfolio to maximise your profits and ensure that the mortgage is in sync with your asset allocation. Generally portfolios need to be rebalanced annually in order to balance out any assets that grow quicker than others although this is more common with mixed portfolios or if you have wide-spread properties.

There are differences with each type of mortgage portfolio and you will need to tailor it precisely to your needs. It can be a long and tedious task to sort this out, but once it is in place it can save you a lot of hassle and hard work. Talking to our mortgage brokers can make this a simple and straightforward process and ensure you get the best possible rates.

 

Article By Ben Lloyd

May 7th, 2014

Ben is the Director and Co-Founder of the Pure Group and Managing Director of Pure Property Finance.

Following a career in Barclays, where Ben was in the real estate finance team for 8 years, he decided that the market needed a more forward-thinking type of commercial brokerage so founded Pure Commercial Finance (now Pure Property Finance), the first company within the Pure Group.

Ben has extensive experience across the real estate sector and has participated in over £2bn of real estate transactions during the course of his career.

Ben oversees the general strategy at Pure Group and works with the senior leadership team to drive the Group forward. Ben is also on the Executive Committee of FIBA.

See more articles by Ben

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