Buy one property or two?

princeofpounds

capital gains tax is indeed a good point
so is progressive stamp duty on larger properties
so is dual maintenance costs (2 boilers to check per year vs one for example), also insurance
so is more diversification of cashflow (with 2 tenants on different cycles)
so is the LTV on the purchase(s); higher LTV means lower interest costs.

etc.

As you can see, it's not a simple decision!

JohnDoe1

p00hsticks wrote: »

But as a general principle, multiple cheaper properties would be better than one expensive one from a CTG point of view, as it will allow you to sell them over a number of years and make full use of your annual CTG allowance each time .

Pixie5740 wrote: »

Excellent point

Should that factor play a major role in my decision making? For CGT, the allowance is say £10k per year, so you would 'only' save £2k, or £4k for higher tax earners, if you sold them in different tax years.

Thrugelmir wrote: »

Gross yields at that level don't look particular appealing.

No, I agree BUT there are not many, if at all, places where you can get those returns as well as capital gains.

JohnDoe1

Flashmanchop wrote: »

I would second that.

have you invested before or will you be a first time landlord?

That is key to the answer you will arrive at, and your adversity to risk, or lack of.

with some knowledge and that level of potential investment there are endless possibilities available to you.

I am a second time landlord so know a little bit of what I am doing (sort of!).

Risk wise, not too much, I could possibly high risk £20k but no way would I put £400k in something high risk.

Please tell me of these possibilities?

ognum

Thrugelmir wrote: »

Gross yields at that level don't look particular appealing.

You are right the gross yield does not look brilliant but factoring the possible capital increase may make it more desirable.

Flashmanchop

It depends how comfortable you are managing what youcurrently have, and how much spare time you have, and if you have a full timejob. Unsure of your age, and retirement plans.



With that amount of cash there is potentially a lot of leverageavailable, or the possibility to buy a number of smaller properties outright.



You could head north and start buying up smaller two bedterrace houses in areas full of LHA tenants.

Flashmanchop

Although I would add that some of the areas where I have BTLI cannot see huge capital growth – however having a plan to have everythingpaid off by the time I am 40/50/60 is as appealing.

dominoman

I would go for the max return, but all else being equal the fewer the better.

Less work, less hassle.

Thrugelmir

ognum wrote: »

You are right the gross yield does not look brilliant but factoring the possible capital increase may make it more desirable.

I invest on the basis of income stream. As that's a known fact. Capital movement is unquantifiable.

This is said in the context of any type of investment. Jumping onto the wave too late is when fingers get burnt.

Thrugelmir

JohnDoe1 wrote: »

No, I agree BUT there are not many, if at all, places where you can get those returns as well as capital gains.

Almost none at the current time. Very little value. I spend many hours before finding a single share that I consider investing in these days. Happily sit on cash for long periods. Risk comes with potential losses.

captainhindsight_2

If you go up north you can get houses for around £50,000 and have tenants on housing benefit, many landlords don't like the idea of this but i have never had any problems as i use a good firm of chartered surveyors who can vet good tenants. I get around a 7% yield this is because of the perceived risk with this kind of property. And with the low prices you can buy more properties so your not likely to have a period where your not receiving some kind of income.