Avora Capital is our new smart way to invest that allows you to earn high returns with minimal effort. By investing with Avora Capital, you can achieve security, diversification, and market leading rental returns from buy-to-let properties all across the United Kingdom without the day-to-day hassle and increasing costs associated with being a private landlord.
This guide gives a comprehensive overview of how the new business model works, and how it allows investors to sit back, relax, and watch their money grow with minimal effort.
What is Avora Capital?
Avora Capital is a way of investing that allows you to earn high rental rental income on properties with long leases. This provides investors like you a consistent income and a strong chance of capital growth in a secure and hassle-free manner that requires little-to-no effort on the investors part.
Our strategy is simple; investors receive shares in the company in return for their investment. Investor funds are then used to purchase a wide range of income producing property assets across several sectors throughout the UK. These assets generate rental income which is then distributed amongst investors delivering a minimum return of 8% per year over a 5-year period.
The team behind Avora Capital and Sterling Woodrow have over 100 years combined experience of the UK property market and possess extensive knowledge of the buy-to-let sector with performance records from globally recognised reputable institutions.
The team of experts at Avora Capital understand the pitfalls and complications associated with the UK property market, which is why the portfolio focuses solely on purchasing high yielding property at below market value prices. This eliminates the possibility of construction delays or complicated planning requirements waiting to be authorised that arise with other investments.
Simply put, Avora Capital is an investment in high-yielding below market value properties that deliver consistent returns from a diversified portfolio.
The problems private landlords face
Recent research has shown that the cost of being a private landlord has risen significantly with the profitability of the buy-to-let sector being hampered by the introduction of government legislation alongside all of the other associated costs.
As a private landlord you have to consider the following costs and challenges:
- Stamp duty
- Solicitor fees
- Management fees
- Maintenance fees
- Landlord insurance
- Tenant demands
- Extensive paperwork and administrative tasks
Not only is it becoming less profitable to be a private landlord, but it can also be a very time-consuming and stressful way to invest when trying to do it alone. Hiring a property manager to oversee the day-to-day operations can help, although this comes at an additional expense, and there is still a lot for the investor to do in terms of shopping for new properties, analysing, negotiating, and keeping up with existing rental properties.
There is also a lot of uncertainty associated with being a private landlord. If a property sits vacant for an extended period, your income drops to zero, and a major unexpected maintenance issue can completely eliminate a year’s worth of returns. In addition to the uncertainty, buying rental properties requires a large capital commitment that limits your options as an investor. You can expect to put down at least 20% when buying a rental property, although many lenders require even more.
The Avora Capital solution
Why suffer from all the headaches and stress of being a private landlord when you can invest in property and receive passive income by purchasing just a small number of shares from Avora Capital and Sterling Woodrow.
The money you invest in Avora Capital will be used to purchase a diverse portfolio of income producing rental assets, and in return you will be issued shares of the company. A trustee will issue a first charge over all the assets within the portfolio giving you an extra layer of protection and security.
By investing in Avora Capital, you have no estate agent’s fees, no maintenance fees, no stamp duty, no tenant disputes, no endless piles of paperwork, just a simple turnkey investment that pays your returns every quarter, completely hassle free.
Avora Capital’s asset portfolio
The population of the UK is at 68 million people and is estimated to grow by a further 7 million in the next 10-15 years. Long term demand for property will continue to outperform supply, leading to further surges in the rental market. The two main sectors that will deliver the best long term sustainable asset growth and consistently high rental returns are Social Housing Affordable Homes Programmes (AHP) and E-commerce Fulfilment Centres.
Social Housing (AHP)
An integral part of the government’s coronavirus recovery plan has been to make the case for investment in new social housing to support jobs, the construction sector, and deliver the social homes required in England. This would be delivered through the current and future Affordable Homes Programmes (AHP), which is the government’s primary route for funding affordable housing.
As part of the March 2020 budget, the government announced £12.2bn for the next 5 year AHP, set to run from 2021 to 2026. In addition to this investment, the government announced a further £1bn of support for renters through an increase in housing benefits, meaning the local housing allowance will cover at least 30% of market rents in the UK.
Avora Capital purchases properties in distressed locations in order to help supplement this excessive demand for social housing. Upon acquisition of each portfolio, ACL enters a 25-year index linked lease with a government backed housing association or charity. The long-term index linked lease adds a significant premium to the underlying value of the portfolio.
The pandemic saw the retail landscape jump forward 5-10 years with the escalation of E-commerce with a 50% increase in online sales. Over half of UK consumers are now shopping online, with retail analysts at Global Data forecasting the UK online spend to further increase by 30.4% by 2024. With this growth of Ecommerce has also come the demand for faster and faster deliveries.
Companies such as Amazon, Ebay, and ASOS to name a few have taken advantage of this spike in demand for online shopping. This, in turn, has created a huge surge in the need for fulfilment centres. Amazon alone leases 154 million square feet of warehouse space, owning just a comparatively small 4 million square feet, making the E-commerce giant the biggest tenant of the largest landlords in the country.
According to its 2018 annual report, Amazon had a property and equipment rental expense of $3.4 billion, with the company’s operating lease commitments totalling $26.6 billion over the next 5 years. Leases are typically signed for a 5-10 year period, providing consistent rental income over a long duration.
With the growth of the E-commerce sector showing no signs of slowing, the Avora Capital business model allows investors to perfectly position themselves to capitalise on this future growth.
Avora Capital FAQs
Are the properties fully managed or do I need to be actively involved?
Avora Capital ensures the management of everything, your investment is completely hands-free.
Do you accept company applications and/or joint applications?
Yes, both company and joint applications are accepted subject to receipt of the necessary anti-money laundering (AML) documents for all company directors and any joint applicants, respectively.
What security is in place for investors?
The independent security trustee holds a fixed and floating charge over all assets of the Company for investors. As an investor you therefore have the peace of mind knowing that you effectively own a share of the property company until your capital is repaid.
How do you make money?
Most of the rental income produced by the properties is paid out to investors with a small amount being used to cover the business running costs and the management of the properties. Avora Capital benefits from the long-term capital growth of the assets purchased.
Can I withdraw my investment before 5 years?
Yes, you can withdraw funds after the third year from the Closing Date of the offer.
Are there any management fees?
There are no management fees.
Why are the returns higher than average buy-to-let investments?
This is due to the types of properties we invest in such as Social Housing (AHP) and the high-yielding areas we focus on. We also purchase below market value allowing us to maximise on rental returns.
How are my initial funds repaid?
There are 3 potential exit strategies. The first option is by way of a share sale or asset sale to an
institutional fund / Real Estate Investment Trust (REIT) / family office. The second option is by way of an Initial Public Offering (IPO). The third is by way of the Put & Call option, terms and conditions set out in the Information Memorandum.