One of our Fundamental motivation is diversification. (Risk reduction is just one of the benefits of diversification.)  I guess those who put all the eggs in one basket (such as a 2nd property) could hit higher return than I do, but it’s not without risk. I think the risk in property investment is less understood than public securities, and underestimated.

With multiple small investments, I could sell one of them. I think this flexibility would be appreciated when the time comes.

My first buy of anything is often an experiment, which gives me insight. I am sure to gain huge insights about what specific things are important to me as opposed to what are popular on the market. After that, I would make bigger commitments on the back of /conviction/.

A practical factor — bank loan restrictions. You may have difficulty getting mortgage on a 2nd home. You may need to pay off the first mortgage, which is harder if the first price tag is big.

• — other important reasons:
• See also u.s.home buy: don’t rush; beware 
• financial burden — see $$: affordability @700k home 
• difficulty of rent-out grows linearly with price tag — see $$: affordability @700k home If you fail to rent out, the bigger price tag also comes with bigger tax!
• flexibility if circumstances require adjustments. Nimble, lighter “load”. Not Tied-down (Jack’s point). With a smaller commitment I could more easily move home. An academic school district could be unsuitable for my kids
• less commitment, lower exposure — eg: Jill’s
• lower risk of regret or nasty surprises — eg: unit trusts