Investing in US or UK rental properties?

[Jon Blownerd]

Hi all

I am a dual us / uk citizen and trying to decide where to buy some rental properties. I live in the UK but may move back to the US in the next few years. Regardless, the properties won't be near where I actually live in either country as yields where I would live are poor. I have done quite a lot of research. Here is my opinion so far:

US:

- 30yr fixed principle repayment mortgage, so actually build equity assuming 0 appreciation

- rates around 4.2% right now (also get a small discount through work)

- first 4 properties 20% down, then 25%

- can deduct all expenses plus depreciation

- I have a large liability in USD (student loan) so would be good to have a USD cash flow and avoid FX risk

UK:

- interest only mortgages with 3-5% fixed rates for 3-5 years...then need to refinance (which can be expensive and unpredictable...also interest only so relying on appreciation)

- however, interest only improves the cash flow significantly as the mortgage amounts are tiny

- 25%+ down

- slightly less tax friendly, it seems

- much less space, higher population density and growth...points to higher average appreciation potential

Does anyone have any thoughts? My strategy would be buy / hold / rent for cash flow and assume minimal appreciation. The fixed rate mortgages of the us appeal but the higher cash flow and likely higher appreciation of uk property is also appealing. But having to refinance every 3-5years seems risky, annoying, and expensive.

Would love to hear your thoughts!

Thanks