Strategy (Eggs in one basket?)

[NE_Buyer]

Hi all

I’m facing a dilemma at the moment regarding the purchase of more property to increase my small portfolio; I have 2 properties in the north east and one in London and am looking to purchase a further 2 in the north.

They are all two bedroom flats (peppercorn) and the additional properties I am looking at are within 5 miles of the ones I already own. Time after time I hear the old adage “don’t put all your eggs in one basket” but these flats are high yielding at circa 12% on a long term corporate contract. They bring in a solid cash flow and should remain that way but I worry that if I had to pull out for some reason, owning several 2 bed flats on the same area could come back to bite me.

Anyone have any thoughts on this? I do work full time and have a steady (but modest) income which is not property related and am not highly leveraged (circa 55%)


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[realdeals]

If you can secure a yield circa 12% there will always be interest if you are ever looking to sell! Just think, even if the net income is 10%, within 10 years you will have repaid the cost of the property. Sometimes it is best to take a step back and look at the situation from a distance.

 

[NE_Buyer]

If you can secure a yield circa 12% there will always be interest if you are ever looking to sell! Just think, even if the net income is 10%, within 10 years you will have repaid the cost of the property. Sometimes it is best to take a step back and look at the situation from a distance.

Thanks very much for the reply, I totally agree with this mindset and it’s something that crosses mine frequently. You know those little demons that chip away telling you that something is too good to be true!? I’ve bought 2 of these in the last 5 months and there are a fair few available to snap up that have been sat on the market for a little while now which makes me wonder why no one is buying them?


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[Longterminvestor]

Many people fail to realise that cash flow is extremely important with any type of investment. If you can pay off your property within 10 years, that would be awesome!