$200,000 to invest

Our Experts Answer:

It depends on the cashflow you want over the next 10 years. If you purchase well then having a larger capital base by purchasing two properties rather than one should put you in a better position in 10 years. However you need to analyse the capital growth potential of each kind of property as you may not get the same capital growth/rental gains from each property. For example, a $350,000 property is likely to be in a different location with different demographics than a $500,000 property. If you are not reliant on the cashflow then potentially going for two gives you multiple options over time as it allows you to sell one off if the market changes while still retaining one property. Do your calculations on net yield rather than gross yield as this may give you a better indication of which option to take. If you know the locations in Christchurch that you would be looking at it is potentially worth spending the money to ask for a paid consultation from a reputable local valuer and potentially a property manager as they can give you  a clearer idea on where they see things going.