This is a question that comes up time and time again. Investors who have a large sum which they wish to invest in property can be unsure of whether to put all their cash into one property or whether to split the cash and borrow additional funds in order to buy multiple buy to lets.
If achieving the greatest possible capital appreciation from your cash in a set period is your ultimate goal then you should probably not pour all your cash into one property – buy several and make a profit on your cash and the additional profit on the money you’re borrowing.
One way of making a success of buying several properties whilst keeping the hassle of owning multiple properties to a minimum is to ensure each buy-to-let property is managed by a reputable company and where possible, buy a property with rental assurance.
A rental assurance can provide investors with the ability to plan with greater clarity. Cash flow is incredibly important in property investment, especially when leveraging your cash to buy two or more properties.
Where possible investors should diversify their portfolios and buy-in several different locations. Investors should focus on areas that have strong demand from professional tenants supported by a thriving local economy as well as having potential for impressive capital growth usually indicated by historical price growth and plans for regeneration and improvement to local infrastructure.
Buying in multiple locations spreads the potential risk, you’re not relying on just one area increasing in value. This is a key reason many investors choose not to put all their cash into one property and instead buy several properties in varying locations, the saying ‘don’t put all your eggs in one basket’ is often used for good reason.
Building a UK property portfolio
Ultimately by dividing your cash and purchasing two or more buy to let properties by leveraging, your potential return is higher. Any investor with a long term approach seeking to achieve the highest capital appreciation on their cash should purchase more than just one property.
This said, we appreciate that there are considerations to be made and it might be that purchasing one property is a better set up for your personal circumstances, some people are simply averse to borrowing funds and that’s ok – let us know your goals and we’ll help find the very best opportunity (or opportunities) to meet your ambitions.