is it better to purchase 1 IP or 2?

[alpina]

hi all,

given the opportunity, does it make more sense to get one IP at say $700k or 2 at $350k each? whats the feeling on this in terms of rental return and net capital gains?

thanks,

julie

[INVESTRON]

if the 2 for 350k each are any good, that would be the better way to go.

don't put all your eggs in one basket.

[WillG]

2 properties ...
* better rental returns (2 average homes will usualy yield better rent returns than 1 expensive property),
* more depreciation
* more expenses (accounting, letting costs ...)
* capital gains are dependant on location.
* two properties are possibly a 'safer' bet (not keeping all eggs in one basket)

All of the above assumptions are dependant on the properties in question.

[Kevmeister]

One property is an all-or-nothing proposition. You either have a tenant or you don't. You can't be "half-tenanted".

Two properties means you might have one vacant, the other tenanted - at least you're still getting half your income.

But you can't overlook the property price relative to the area you're buying in etc, property condition, market demand for the particular properties in that area - and all the other usual selection criteria.

[Jas]

one property in a really good area means more money. there's a chance of a higher return, and a higher downside.

I'd go with two.

Jas