Need advice on what to do with 200k

[John Miller]

Hey fellow BP members, I've been reading a lot of posts on this forum for these past 6 months and I have to say that I've learned a lot about real estate investing but I keep trying to use all the information that I read in my situation and I just cannot figure out the best possible course of action that I should take towards putting my money to work.

I want to describe my situation in a little bit more detail so that you can understand my current situation and what I want. 

I am 28 years old still living with my parents(in an EU country) but looking to move out as soon as possible. During the past few years I have saved around 200k from my work and I am now looking to invest in real estate possibly to purchase a primary to live in and a second property to generate income from. Apart from that, my partner will also be getting approximately the same amount from sale of properties(inheritance) in the next 6 months or so. I am not looking to get super rich but to create a secondary income and maybe have an asset that appreciates in value as time goes by.

I have been looking at the local market for over 3 years and know the prices inside out but since this is my first property I took too long to pull the trigger and prices have risen drastically in the past 2 years... more than 50% believe it or not.

The country I live in has experienced a sudden economical growth and is looking at an increase in population in the next few years(by 2x)... so prospects are looking good for investment but at the same time the property prices have reached such heights as to not be reachable by most people and the infrastructure also seems to be at it's limit. This is the first real boom that the country has experienced and the only resource we have is human so I doubt that property prices can sustainably increase for long.

I have listed out several options on piece of paper so that I can help myself decide but would also love your input.

Option 1: Buy(without a mortgage) a large rehab traditional house that me and my partner like. Fix it and live in it while we let it appreciate... in the meantime we could keep saving money which we can use to purchase a rental. Another option would be to find a house with a flatlet. We don't have multi-family homes were we live.

Option 2: Buy a smaller primary house(but more expensive per square metre) and a secondary one that we can rent - this option would probably require a small mortgage.

Option 3: Relocate to another, more affordable EU country where we could temporarily purchase a property to live in and maybe come back when the market settles(if it ever does).

I would say that I am conservative in terms of risk... I would only use leverage if it's something that I can handle if things go bad.

Do I have the right mindset here or is my thinking flawed? I would appreciate your feedback and suggestions.