1 350,000 property or 3 for 150,000?

Discussion in 'Buy-to-Let Property Investment' started by shina, Apr 30, 2019.

  1. shina

    shina New Member

    Hi,
    I have few questions I would like to ask before heading forward with bulding my property profolio.
    1. I wonder if it'll be better to purchase 1 property in an area like Cambridge or London in opposed to 3 in an area say like Peterborough. the goal is to generate the highest cash flow as possible and on the other hand to gain capital growth profit.
    2. Would it be better to but properties that need doing (cosmetic things) and try and get them BMV or better to go for properties that are ready to rent straight away?

    3. should we use interest only mortgages or better to go for re-payments?
    Or maybe a mix of both?
    The main goal is to start and build property profolio and buy more properties.

    Would be happy to hear peoples approaches and strategies.

    Best regards,

    Shina
     
  2. Longterminvestor

    Longterminvestor Active Member

    My view for what its worth:-

    1. I wonder if it'll be better to purchase 1 property in an area like Cambridge or London in opposed to 3 in an area say like Peterborough. the goal is to generate the highest cash flow as possible and on the other hand to gain capital growth profit.

    This would depend on the rental yields - there is always a hedge between rental yield and capital growth.

    2. Would it be better to but properties that need doing (cosmetic things) and try and get them BMV or better to go for properties that are ready to rent straight away?

    I doubt if the issues were just "cosmetic" that you would get much of a discount. It also depends on how good you are at repairs/diy as to how much work you want to do. Personally, go for one ready to rent and start your cashflow.

    3. should we use interest only mortgages or better to go for re-payments?
    Or maybe a mix of both?
    The main goal is to start and build property profolio and buy more properties.

    If your rental income was to cover interest and capital repayments great. If it just covered interest on an interest only mortgage then you could remortgage at the end of the term, hopefully on a higher value.

    Lots of options :)
     
  3. shina

    shina New Member

  4. I think the key here is to consider what you are looking for capital gains/rental income because they are at opposite ends of the investment spectrum. Finding a balance will give you a degree of potential for capital gain as well as decent rental income. Rental income is steadier in the long run, capital gains go in cycles, but it does depend on your long term aims.
     
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