Should I buy One House for $1 million or two for $500K?

Depending on the area, it is generally better to buy more properties at a cheaper price, multiplying your rental opportunities. One million dollars can buy several properties - a luxurious house in the country, a premium inner-city flat, or two suburban homes.

The country estate, although a romantic notion, is a gamble to say the least. City apartments have a relatively high turnover. They are fine provided you are certain the area is protected and improving. Urban development can compromise a previously well-positioned apartment.

The well-maintained suburban home offers the most advantages, attracting the lion’s share of the tenancy market. Older properties should be avoided, unless you are an experienced renovator with lots of time and money. Many new homes now offer up to seven year Master Builder guarantees of workmanship, which is a great bonus. In addition, less expensive properties like the suburban home yield a higher “rent to mortgage ratio”. And if you’re planning to sell on retirement, the desirable mid-ranged suburban home draws more buyers, particularly first-time buyers.

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