Smart Property Move: Cash vs Leverage?

One of the questions that often crops up is

“should I buy one property in cash or use my money as deposits across multiple properties?”

Mmmmm……now many people will instantly answer that question with “buy multiple properties” 🏡🏠, with the mechanics of that decision led by more properties, more capital growth 💲💲💲. It is certainly true that leveraging your cash 💷 will help you build your property portfolio and gain as the market climbs through capital growth 📈 – after all that is what the vast majority of people do. However, developing a property investment strategy is unique to each individual, with a multitude of factors at work.

However, having a single property owned outright means you have an “unencumbered asset”; so why is that interesting? 🤔

It was not obvious to us initially until we started to delve further and further into the world of SSAS 😮. If you have a SSAS or are thinking of setting one up, then an asset you own out right can certainly smooth the wheels of getting your first “loan back” off the ground 😱😱. As your portfolio grows having an asset you own outright creates a level of flexibility 👍 and reassurance ✅ in rapidly changing markets. As does LTV ratios against debt.

Your corporate trustees should always be concerned about the “security” 🔐 of your capital deployed, interestingly a recent article I wrote gained discussion around just this point.

Remember that if something seems too good to be true it probably is. Always do your research and seek relevant advice. 🔍👩‍💼

Benefits of using leverage:

💷 Spread you cash further
📈 Build more assets which is turn rise with capital growth in the market
🥚 Spread you risk across multiple properties – not all your eggs in one basket
⭐ Ability to refinance across multiple properties due to equity growth, creating a cyclical re-investment pool of funds
💭 Utilisation of different strategies
💸 Tax Efficiencies


🏘 More properties to manage
🟡 Rising interest rates eating into margins
📜 Portfolio landlord after 4 properties for mortgage considerations
📉 Your personal view on exposure and risk ratios.
🔴 Long term strategy towards repayment versus interest only mortgages

Whatever strategy you’re following, do your DD and think ahead. 💭

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