Ive been part of the Property Hub for around 6 months and have really enjoyed listening to the podcast and attending the meetups. Thank you Rob and Rob for everything!
My dilemma is that I have a bit of capital to invest and would like to get a sweet balance of rental yield and capital growth. I have been given a proposal from my friend to go to the outer skirts of South Wales and buy in auction for a small cost and rent out the property, with the rent being split. Or even flip and sell. As an investor it makes sense to buy as a cash buyer but the location isn’t great. I am a bit apprehensive because the properties in this area are not in easy reach of a big city (Cardiff) and the rent is very low in comparison to other parts of UK and if we split the rent between us it becomes even lower, the capital growth isnt great either.
The alternative is to go on my own to a place like Liverpool, Manchester, Nottingham or Sheffield and buy with a mortgage, with yields going up to potentially 8-10% and getting back 100% profits, rather than 50/50. The problem lies with having a mortgage and paying the extra for taking it out. Also, in these cities I can only afford 1 or 2 bed apartments (plus ground rent and service charge), whereas in South Wales my friend and I can get a 3 bedroom house.
What would your advise be regarding the location and whether I should buy cheaper in auction as a cash buyer but split the profits between me and my friend, OR go alone and buy somewhere more established but pay that little bit extra?
I hope I've explained my dilemma clearly, if not, please ask and ill try to explain better
Your thoughts and comments would be very much appreciated.