Let's say I have a chunk of cash sufficient to cover a 50% down payment on an average house (£600k). Or, buy an inexpensive house outright. Let's also say I must use the money for real estate—I cannot invest it in the market at this time due to the terms of inheritance.
With all of the costs and fees, plus the £20K stamp duty, there are already considerable losses. Essentially, the ROI from the first year (excluding interest) will be about -8%. That is one above-average stock market year, or 2-3 lower risk market years (mixing in some bonds).
I can either rent the house out, or live in it for up to 2 years then either sell it or rent it out. Long-term residence there is not an option. Note also I must remain in a high cost-of-living area for at least two more years due to my job.
I am quite experienced with investing but have zero real estate experience.
Could I justify getting a mortgage and doing some renting, or should I just liquidate by buying a cheap house, renting it out for a short while, then selling it.