Anna Clare Harper, chief executive of SPI Capital, a property consultancy, said:

Ms Dempsey’s goal of making £10,000 to £15,000 a year is achievable from property investments with the amounts of money she has inherited.

Buy-to-lets offer consistent income and are one of the least risky property investments in terms of cash flow. Demand from tenants for good, affordable rentals is strong and growing.

Holiday lets are attractive on paper thanks to their gross yields. But owing to higher management costs, longer void periods and inconsistent and ­seasonal bookings, a question mark over future demand and anticipated future regulations, they are not the best fit.

Ms Dempsey should choose buy-to-let properties worth £70,000 to £150,000 that have a 6pc gross yield.

If she buys mortgage-free using the sums from her inheritance, her portfolio will start with a value of about £210,000 after transaction costs. If house price growth were 5pc, the annual capital appreciation would be £10,000 and she could achieve rental income of £9,198.

If she uses mortgages to buy, however, her portfolio could be worth £740,000 with the help of 75pc mortgages. With the same 5pc growth rate, capital appreciation would be £37,500 a year. Using a 75pc five-year fixed-rate mortgage at 1.75pc, Ms Dempsey could use her initial £42,000 to buy a property worth £136,000 in the short term, generating £8,160 gross income.

Assuming typical management costs of 10pc plus VAT and setting aside 15pc each year for voids, maintenance and contingencies, she would have a pre-tax income of £4,172.

The additional £180,000 investment in a few years could be used to buy a property worth £581,000, generating a £17,822 pre-tax income with the same assumptions. She would then have a portfolio worth £717,000 generating £43,020 in rent, with a £21,994 income before tax.

Buying via a limited company allows investors to make mortgage interest tax deductible. If Ms Dempsey chooses to borrow, she could establish an investment company to take advantage of this. But the finance costs are higher at more than 3.5pc. For a modest portfolio and a lower-rate taxpayer, it can be cheaper not to bother with the limited company.