How to Buy More Than One Investment Property

Why Buy More Than One Property? 

So why would you want to buy more property for investment in the first place? 

Owning a range of properties and building a property portfolio is a popular property investment strategy for those serious about making money through a long-term investment. 

There are many benefits to owning more investments, such as: 

• Increased cash flow from multiple investments bringing in rental yield. 
• Less risk, as if one was to suffer due to real estate market changes, your other investments would still bring in returns. 
• You can achieve financial freedom more quickly with a portfolio. 

I Only Have a Budget For One Property – How Do I Buy More Rental Properties? 

The first step is to think about your investment budget and consider how many properties you can actually afford at once. 

You may have found a particular apartment or house that ticks all the boxes, with the only downside being that the price of the investment property leaves you with no cash leftover. 

You may be considering using your entire budget to buy just one property for now and then using rental income from the investment to fund your second purchase. 

While this is certainly an option, it’s not a good investment strategy if you want to build a property portfolio quickly, as it could take years before you’ve saved enough money to fund your second investment. 

If you don’t want to be left having to buy one rental property per year and instead are looking to kickstart your portfolio, consider the following options. 

Hunt For Below-Market Value Rates 

Forgetting about that one pricey property you’ve found and scanning the market for cheaper, below-market value properties is a simple way to buy more than one property. 

Below-market value means that the property is being listed at a lower price than the average house price in the area, and cheaper properties can be found compared to other similar nearby opportunities. 

Many property investment companies and developers offer investments at below-market value prices if they’re off-plan. Off-plan means that the property development is still being built, but is available for investment while planning or construction is ongoing. 

Developments like Merchant’s Wharf in Manchester are offered at 55% below market value prices, and apartments in developments like Liverpool’s ELEMENT – The Quarter are priced from just £74,950. 

If you had a budget of £200,000, you could purchase two units outright in this Liverpool development and still be left with around £50k to put towards another investment. 

Pros of This Strategy 

• Buying an investment property to rent with this strategy is cost-effective. It allows you to spread your budget across multiple investments. 
• The properties you buy will be brand-new, which comes with many benefits like higher rental demand. 
• By investing in apartments sold by investment companies, you can make your investment process easier and get advice along the way. 

Cons of This Strategy 

• Since these investments are off-plan, you will need to wait for the property to complete, which could take several years. 
• Buying off-plan requires more due diligence and research to ensure the developer behind the project has a good reputation within the property market. 

Start Your Portfolio With Fixer-Upper Properties 

Instead of investing in off-plan or new build homes, many property investors will purchase houses or apartments in desperate need of renovation. 

Otherwise known as a ‘fixer-upper’, these property types are popular with those who like to buy at a lower cost, spend money renovating it, and then sell it for an increased price. 

Because this method allows you to find more affordable deals, it could be a good option if you’re wondering how to buy more than one investment property with one budget. 

Fixer-upper homes are often listed by estate agents or sold at auctions. Guide prices can be significantly lower than the typical average house prices on the market. 

Any money you make from capital gains can be used to buy additional investment properties and grow your portfolio. 

However, with this strategy, you need to allocate funds towards the cost of renovation, which requires time, planning, and expert knowledge.  

Pros of This Strategy  

• Flipping houses can be an excellent way to make significant returns in a lump sum for further investments. 
• Buying houses or flats in need of renovation means you’re able to pay less than you would normally, allowing you to spread your budget across multiple properties. 

Cons of This Strategy 

• Expert knowledge and experience are often needed to ensure everything runs smoothly. With this knowledge, you’ll know the most cost-effective ways to renovate each property. 
• It may take some time before the renovation is complete and the properties can be sold, leaving you without any returns for an extended period. 

Get a Discount on a Bulk Purchase 

One of the best ways to buy more than one property at once is to bulk purchase multiple units within one development. 

Some property developers and investment companies will offer you the option to purchase several units in one property development at a discounted rate. 

This could mean that for the price of just one regular property, you could own more than one apartment at once and pay the same amount or less. 

Again, this is a popular strategy with off-plan investing, as buying off-plan is an all-around great way to find cheaper properties. 

Pros of This Strategy 

• You can own multiple units in a new build development for a discounted bulk purchase price. 
• You get the first pick of the best units within off-plan property development. 
• The buying process is simplified as you don’t need to spend time researching the different properties and their different areas. 

Cons of This Strategy 

• You will own units in the same development rather than varying your buy to let property investments between student or residential property. This means your portfolio is not as diverse. 

Using a Buy to Let Mortgage or Payment Plan to Secure More Property 

Say you have a budget of £200,000, and you’re hoping to buy more than one investment property at once. You’re inevitably going to run into difficulty finding properties cheap enough to fund multiple investments with this budget. 

However, if you used buy to let mortgages or payment plans to fund your investments, you could spread your budget across multiple properties. 

With a buy to let mortgage, you need to put down at least 25% of the property price as a deposit (sometimes more depending on the mortgage provider you use). 

This means that with a £200,000 budget, you could buy five properties with a value of £120,000 by spending just £30k on a deposit for each. You would then be left with £50k of your budget and could use part of your rental income to fund mortgage payments. 

With the option of a payment plan offered by some property investment companies, you can split your payments into smaller, more manageable chunks. 

For example, some investments allow you to pay 50% upon reservation and 50% when the property is complete (for an off-plan purchase). 

This could be a good option for you if you want to use your budget to secure a few properties and then pay the rest of the amount once you’ve had some time to save more money. 

Pros of This Strategy 

• Buying an investment property to rent with the help of a payment plan or buy to let mortgage allows you to put the remaining amount of your budget towards more investments. 
• Depending on the amount of money you have available, you could build a sizeable property portfolio much more quickly. 

Cons of This Strategy 

• Securing a buy to let mortgage may be more difficult for overseas buyers or those investing in certain off-plan properties. 
• Investing in property with a payment plan is more prevalent with off-plan purchases, so buying more property with this method would be unlikely if you want to buy completed homes. 

Borrow Money to Buy More Properties 

If all else fails, there’s the option of borrowing money from a friend or relative to fund your additional investments. 

You may have enough to buy your first property, but your budget has run dry after that first investment property purchase. 

If a family member or friend has enough money to cover the property prices of the other properties you have your eye on, you could consider temporarily lending the money from them and paying them back at a later date. 

This option could work for some people but isn’t generally recommended. You don’t want to be relying on other people when you invest in property, as property investing is a serious business. 

Things could get messy if you’re unable to pay back what you borrowed quickly enough, and the vast majority of successful investors would advise against this option. 

Pros of This Strategy 

• You could buy properties more quickly with the help of a generous friend or family member who is willing to temporarily loan you the money.

Cons of This Strategy 

• If you’re unable to repay the loan, you could damage your relationship with the lender. 
• This option leaves you with less financial freedom and stability, as you’re relying on other people’s financial circumstances to fund your own venture. 

Investing in Real Estate Investment Trusts 

Buying a flat or house isn’t the only way you can get involved with the property market. 

Otherwise known as a REIT, a real estate investment trust is a company that finances, owns, or operates real estate. 

When you invest in a REIT, you’re investing in a share of the company’s properties, which makes this a similar strategy to investing in the stock market. 

Because you’re not actually buying a property yourself, this could be considered a good way to buy more than one property at a time when you have just started investing and don’t have a lot of funds available. 

Since it works similarly to stocks and shares investments, they’re a ‘liquid’ investment and not a ‘physical’ investment like property. This makes them more high risk. 

Pros of This Strategy 

• You can invest in rental properties without actually owning them. 
• Your returns can increase with capital growth depending on market performance at the time. 

Cons of This Strategy 

• You won’t physically own any rental properties, which means you won’t collect rent yourself and benefit from the full returns from your investment. 
• Property investors cannot perform research on their investment, which makes it difficult to determine the value of your REITs. 
• As with other stock investments, value can fluctuate, and you could be left with less than you initially invested. 

Why Buy More Investment Properties With RWinvest? 

Considering buying your first rental property with RWinvest? If you want to achieve financial freedom and make passive income through property, we can help you find the right property for you. 

Disclaimer: This blog post aims to provide information and should not be considered financial advice. Please seek out a financial advisor or financial planner if you need expert advice on your personal finances.