One BIG property or two smaller properties
Member since 2022 · 43 posts · 25 votes
One BIG property or two smaller properties
Most Popular Reply
John UnderwoodPro Member
Investor · Greer, SC · Member since 2014 · 13k+ posts · 17k+ votesQuote from @Account Closed:
Quote from @John Underwood:
One bigger property can make more with less effort than 2 properties.
Just curious, is there a healthy demand for the bigger properties?
I have a 6 bedroom, 4400 sq ft mountain cabin that can sleep up to 23 people.
Wow I can't believe how full it stays. One group checks out another arrives in the afternoon.
62 Replies
Quote from @JD Martin:
Quote from @Marcelle Abel:
Running into a wall here and would love your thoughts and insights as I try to scale as a new investor. We have a chunk of cash to work with which I had originally planned to buy three STR properties with (traditional mortgage, 20% down) BUT I found a larger property with a larger price tag that looks to cash flow very well if done right. So my question is...do I spend 2/3 of my cash on this one property or stick to my original plan and look for three properties with a more moderate cash flow? Thanks everyone!
Your title says one big or two smaller, but the writeup says 3 smaller. In general you should buy whatever makes the most financial sense, and one property is less work than 3 if the cash flow is all the same. But there might be multiple opportunities for value increase, and you also get a little diversification with 3 instead of 1.
I would probably go for 3 smaller but that's a preference issue if the cash is all the same.
WRONG.
How much work... depends on quality of property, quality of location, tenant quality, etc. It's good not to make generalizations, so she can actually learn properly.
- Member since 2022 · 1k+ posts · 1k+ votes4y
Assuming quality properties in strong markets to keep the comparison apples-to-apples, 3 smaller units will give you more exit options and "weather the storm" better in most situations. Better to have trouble making payments on 1 of 3 properties than 1 of 1. The price elasticity on both the equity and ADR will likely be less on the smaller units if we have a downturn. On the upswing the smaller units will have more room to appreciate and will appeal to a wider variety of potential sellers if/when you offload.
Personally I would do 1 property in a strong summer and 1 in a strong winter market so that you have steady year round income, and #3 could go either way. If you choose well on the first 2 you could maybe save enough in that first year to go big with the 3rd!
- Rock Star Extraordinaire · Northeast, TN · Member since 2015 · 10k+ posts · 17k+ votes4yWell, that's quite obnoxious. Of course it's a generalization, Sherlock. She's not asking for a financial exposition of her portfolio and strategies. She wanted a plethora of opinions, which is what she got.
Quote from @Jon Q.:
Quote from @JD Martin:
Quote from @Marcelle Abel:
Running into a wall here and would love your thoughts and insights as I try to scale as a new investor. We have a chunk of cash to work with which I had originally planned to buy three STR properties with (traditional mortgage, 20% down) BUT I found a larger property with a larger price tag that looks to cash flow very well if done right. So my question is...do I spend 2/3 of my cash on this one property or stick to my original plan and look for three properties with a more moderate cash flow? Thanks everyone!
Your title says one big or two smaller, but the writeup says 3 smaller. In general you should buy whatever makes the most financial sense, and one property is less work than 3 if the cash flow is all the same. But there might be multiple opportunities for value increase, and you also get a little diversification with 3 instead of 1.
I would probably go for 3 smaller but that's a preference issue if the cash is all the same.
WRONG.
How much work... depends on quality of property, quality of location, tenant quality, etc. It's good not to make generalizations, so she can actually learn properly.
When we all posted, we didn't realize that you were planning on making an appearance. If we had known, we could have all saved ourselves some time and effort and just let you give her all the answers she needed.
Skyline Properties - Rental Property Investor · Russellville, AR · Member since 2014 · 688 posts · 509 votes4y
It really depends on what your goal is. There will be less work with just one (one roof, one water heater, one tenant at a time, etc...). There is less financial risk with multiple properties. If something goes wrong with one (leaky roof, broken water heater, tenant moves out), the other two can help pay for it.
My personal preference would be to have multiple properties, but I really hate vacancy. Good luck!
- 4yBruce WoodruffPro MemberContractor/Investor/Consultant · San Diego / Phoenix · Member since 2021 · 12k+ posts · 15k+ votes
Quote from @JD Martin:
Well, that's quite obnoxious. Of course it's a generalization, Sherlock. She's not asking for a financial exposition of her portfolio and strategies. She wanted a plethora of opinions, which is what she got.
When we all posted, we didn't realize that you were planning on making an appearance. If we had known, we could have all saved ourselves some time and effort and just let you give her all the answers she needed.I was waiting for that! 😂
- Member since 2022 · 43 posts · 25 votes4y
Quote from @Billy Daniel:
It really depends on what your goal is. There will be less work with just one (one roof, one water heater, one tenant at a time, etc...). There is less financial risk with multiple properties. If something goes wrong with one (leaky roof, broken water heater, tenant moves out), the other two can help pay for it.
My personal preference would be to have multiple properties, but I really hate vacancy. Good luck!
Thank you!!
Quote from @JD Martin:
Well, that's quite obnoxious. Of course it's a generalization, Sherlock. She's not asking for a financial exposition of her portfolio and strategies. She wanted a plethora of opinions, which is what she got.Quote from @Jon Q.:
Quote from @JD Martin:
Quote from @Marcelle Abel:
Running into a wall here and would love your thoughts and insights as I try to scale as a new investor. We have a chunk of cash to work with which I had originally planned to buy three STR properties with (traditional mortgage, 20% down) BUT I found a larger property with a larger price tag that looks to cash flow very well if done right. So my question is...do I spend 2/3 of my cash on this one property or stick to my original plan and look for three properties with a more moderate cash flow? Thanks everyone!
Your title says one big or two smaller, but the writeup says 3 smaller. In general you should buy whatever makes the most financial sense, and one property is less work than 3 if the cash flow is all the same. But there might be multiple opportunities for value increase, and you also get a little diversification with 3 instead of 1.
I would probably go for 3 smaller but that's a preference issue if the cash is all the same.
WRONG.
How much work... depends on quality of property, quality of location, tenant quality, etc. It's good not to make generalizations, so she can actually learn properly.
When we all posted, we didn't realize that you were planning on making an appearance. If we had known, we could have all saved ourselves some time and effort and just let you give her all the answers she needed.If someone is trying to learn, I think it’s a good idea to give them accurate answers.
Here your “opinion” if that’s what it was IS incorrect: “one property is less work than 3 if the cash flow is all the same.”
That is not true.
How much work one option versus another will be and how much risk associate depends on many variables.Quote from @JD Martin:
Well, that's quite obnoxious. Of course it's a generalization, Sherlock. She's not asking for a financial exposition of her portfolio and strategies. She wanted a plethora of opinions, which is what she got.Quote from @Jon Q.:
Quote from @JD Martin:
Quote from @Marcelle Abel:
Running into a wall here and would love your thoughts and insights as I try to scale as a new investor. We have a chunk of cash to work with which I had originally planned to buy three STR properties with (traditional mortgage, 20% down) BUT I found a larger property with a larger price tag that looks to cash flow very well if done right. So my question is...do I spend 2/3 of my cash on this one property or stick to my original plan and look for three properties with a more moderate cash flow? Thanks everyone!
Your title says one big or two smaller, but the writeup says 3 smaller. In general you should buy whatever makes the most financial sense, and one property is less work than 3 if the cash flow is all the same. But there might be multiple opportunities for value increase, and you also get a little diversification with 3 instead of 1.
I would probably go for 3 smaller but that's a preference issue if the cash is all the same.
WRONG.
How much work... depends on quality of property, quality of location, tenant quality, etc. It's good not to make generalizations, so she can actually learn properly.
When we all posted, we didn't realize that you were planning on making an appearance. If we had known, we could have all saved ourselves some time and effort and just let you give her all the answers she needed.As a group “moderator” and “rockstar”, don’t you think that you should only give info to those starting out that is accurate.
That’s the responsible thing to do. If i were just starting out and you responses how you have, it would take significant time and likely money to learn that what you just said isn’t necessarily true.
I can see you are angry. Imagine that you’re just getting started and “experts” are giving you wrong info. How angry would you be?
- 4yMichael BaumPro MemberOlympia, WA · Member since 2016 · 8k+ posts · 7k+ votes
Hey @Jon Q., I don't disagree with you, but 3 properties most likely will be more work than one. No not always, but usually. I agree that all things being equal 1 shouldn't be more than 3 as long as you keep up with the systems maintenance. Start letting that go and 3 will always be more than one when you have to repair 3 furnaces or A/C units.
- Rock Star Extraordinaire · Northeast, TN · Member since 2015 · 10k+ posts · 17k+ votes4yI said "In general". That "in general" is the reason some people prefer one multi-family to several single family homes - one roof, one location to manage, one yard to keep cut, one property to visit. ETC. When I owned one home "in general", it was easier than when I owned two homes. When I owned two homes "in general", it was easier than when I owned 4 homes. Yes, of course if the one home is a slum tenement and the three homes are pristine Bay suburb ranches, it's probably going to be more work managing the tenement.
Quote from @Jon Q.:
Quote from @JD Martin:
Well, that's quite obnoxious. Of course it's a generalization, Sherlock. She's not asking for a financial exposition of her portfolio and strategies. She wanted a plethora of opinions, which is what she got.Quote from @Jon Q.:
Quote from @JD Martin:
Quote from @Marcelle Abel:
Running into a wall here and would love your thoughts and insights as I try to scale as a new investor. We have a chunk of cash to work with which I had originally planned to buy three STR properties with (traditional mortgage, 20% down) BUT I found a larger property with a larger price tag that looks to cash flow very well if done right. So my question is...do I spend 2/3 of my cash on this one property or stick to my original plan and look for three properties with a more moderate cash flow? Thanks everyone!
Your title says one big or two smaller, but the writeup says 3 smaller. In general you should buy whatever makes the most financial sense, and one property is less work than 3 if the cash flow is all the same. But there might be multiple opportunities for value increase, and you also get a little diversification with 3 instead of 1.
I would probably go for 3 smaller but that's a preference issue if the cash is all the same.
WRONG.
How much work... depends on quality of property, quality of location, tenant quality, etc. It's good not to make generalizations, so she can actually learn properly.
When we all posted, we didn't realize that you were planning on making an appearance. If we had known, we could have all saved ourselves some time and effort and just let you give her all the answers she needed.If someone is trying to learn, I think it’s a good idea to give them accurate answers.
Here your “opinion” if that’s what it was IS incorrect: “one property is less work than 3 if the cash flow is all the same.”
That is not true.
How much work one option versus another will be and how much risk associate depends on many variables.
In any case, get off your high horse. There are virtually no "facts" when it comes to real estate, only opinions and generalizations. Just because YOU say something is wrong doesn't make it so. Who are you? You're a guy on an internet board, just like me. I'd bet we crapped in identical toilets today.Skyline Properties Quote from @Michael Baum:
Hey @Jon Q., I don't disagree with you, but 3 properties most likely will be more work than one. No not always, but usually. I agree that all things being equal 1 shouldn't be more than 3 as long as you keep up with the systems maintenance. Start letting that go and 3 will always be more than one when you have to repair 3 furnaces or A/C units.
All things being equal, yes. But all things are never equal.
And… MF are often in rental neighborhoods, SFR are not usually.
So, making this generalization does more harm than good… is not useful, but harmful. Understanding why and what variables impact what to invest and not invest in is what matters.Quote from @JD Martin:
I said "In general". That "in general" is the reason some people prefer one multi-family to several single family homes - one roof, one location to manage, one yard to keep cut, one property to visit. ETC. When I owned one home "in general", it was easier than when I owned two homes. When I owned two homes "in general", it was easier than when I owned 4 homes. Yes, of course if the one home is a slum tenement and the three homes are pristine Bay suburb ranches, it's probably going to be more work managing the tenement.Quote from @Jon Q.:
Quote from @JD Martin:
Well, that's quite obnoxious. Of course it's a generalization, Sherlock. She's not asking for a financial exposition of her portfolio and strategies. She wanted a plethora of opinions, which is what she got.Quote from @Jon Q.:
Quote from @JD Martin:
Quote from @Marcelle Abel:
Running into a wall here and would love your thoughts and insights as I try to scale as a new investor. We have a chunk of cash to work with which I had originally planned to buy three STR properties with (traditional mortgage, 20% down) BUT I found a larger property with a larger price tag that looks to cash flow very well if done right. So my question is...do I spend 2/3 of my cash on this one property or stick to my original plan and look for three properties with a more moderate cash flow? Thanks everyone!
Your title says one big or two smaller, but the writeup says 3 smaller. In general you should buy whatever makes the most financial sense, and one property is less work than 3 if the cash flow is all the same. But there might be multiple opportunities for value increase, and you also get a little diversification with 3 instead of 1.
I would probably go for 3 smaller but that's a preference issue if the cash is all the same.
WRONG.
How much work... depends on quality of property, quality of location, tenant quality, etc. It's good not to make generalizations, so she can actually learn properly.
When we all posted, we didn't realize that you were planning on making an appearance. If we had known, we could have all saved ourselves some time and effort and just let you give her all the answers she needed.If someone is trying to learn, I think it’s a good idea to give them accurate answers.
Here your “opinion” if that’s what it was IS incorrect: “one property is less work than 3 if the cash flow is all the same.”
That is not true.
How much work one option versus another will be and how much risk associate depends on many variables.
In any case, get off your high horse. There are virtually no "facts" when it comes to real estate, only opinions and generalizations. Just because YOU say something is wrong doesn't make it so. Who are you? You're a guy on an internet board, just like me. I'd bet we crapped in identical toilets today.“There are virtually no "facts" when it comes to real estate, only opinions and generalizations. ”
That is wrong.- Rock Star Extraordinaire · Northeast, TN · Member since 2015 · 10k+ posts · 17k+ votes4yWell, we are going to stop the conversation right here because this member's thread is going off the rails. You have your opinion and I have mine. Keep your feelings about my opinion to yourself.
Quote from @Jon Q.:
Quote from @JD Martin:
I said "In general". That "in general" is the reason some people prefer one multi-family to several single family homes - one roof, one location to manage, one yard to keep cut, one property to visit. ETC. When I owned one home "in general", it was easier than when I owned two homes. When I owned two homes "in general", it was easier than when I owned 4 homes. Yes, of course if the one home is a slum tenement and the three homes are pristine Bay suburb ranches, it's probably going to be more work managing the tenement.Quote from @Jon Q.:
Quote from @JD Martin:
Well, that's quite obnoxious. Of course it's a generalization, Sherlock. She's not asking for a financial exposition of her portfolio and strategies. She wanted a plethora of opinions, which is what she got.Quote from @Jon Q.:
Quote from @JD Martin:
Quote from @Marcelle Abel:
Running into a wall here and would love your thoughts and insights as I try to scale as a new investor. We have a chunk of cash to work with which I had originally planned to buy three STR properties with (traditional mortgage, 20% down) BUT I found a larger property with a larger price tag that looks to cash flow very well if done right. So my question is...do I spend 2/3 of my cash on this one property or stick to my original plan and look for three properties with a more moderate cash flow? Thanks everyone!
Your title says one big or two smaller, but the writeup says 3 smaller. In general you should buy whatever makes the most financial sense, and one property is less work than 3 if the cash flow is all the same. But there might be multiple opportunities for value increase, and you also get a little diversification with 3 instead of 1.
I would probably go for 3 smaller but that's a preference issue if the cash is all the same.
WRONG.
How much work... depends on quality of property, quality of location, tenant quality, etc. It's good not to make generalizations, so she can actually learn properly.
When we all posted, we didn't realize that you were planning on making an appearance. If we had known, we could have all saved ourselves some time and effort and just let you give her all the answers she needed.If someone is trying to learn, I think it’s a good idea to give them accurate answers.
Here your “opinion” if that’s what it was IS incorrect: “one property is less work than 3 if the cash flow is all the same.”
That is not true.
How much work one option versus another will be and how much risk associate depends on many variables.
In any case, get off your high horse. There are virtually no "facts" when it comes to real estate, only opinions and generalizations. Just because YOU say something is wrong doesn't make it so. Who are you? You're a guy on an internet board, just like me. I'd bet we crapped in identical toilets today.“There are virtually no "facts" when it comes to real estate, only opinions and generalizations. ”
That is wrong.Skyline Properties Quote from @Jon Q.:
Quote from @Michael Baum:
Hey @Jon Q., I don't disagree with you, but 3 properties most likely will be more work than one. No not always, but usually. I agree that all things being equal 1 shouldn't be more than 3 as long as you keep up with the systems maintenance. Start letting that go and 3 will always be more than one when you have to repair 3 furnaces or A/C units.
All things being equal, yes. But all things are never equal.
And… MF are often in rental neighborhoods, SFR are not usually.
So, making this generalization does more harm than good… is not useful, but harmful. Understanding why and what variables impact what to invest and not invest in is what matters.@Marcelle Abel considering the quality of comments being shared on this thread, my suggesting is to consider it only one source of info and not that any info posted is true. Doing that will protect you because relying on comments of some people could cause you problems and cost you serious money.
If interested, I can provide you with a list of books written by experts that provide “facts”.
Comments on here are only as good as the experience of the person providing them, so “trust, but always verify” what you hear/read, even from me.
I’ve been doing this 20+ years, but I’d say I know nothing,… just developed ways to overcome the countless challenges that have come up in markets I’ve operated in throughout the U.S.
- Member since 2022 · 43 posts · 25 votes4y
Quote from @Jon Q.:
Quote from @Jon Q.:
Quote from @Michael Baum:
Hey @Jon Q., I don't disagree with you, but 3 properties most likely will be more work than one. No not always, but usually. I agree that all things being equal 1 shouldn't be more than 3 as long as you keep up with the systems maintenance. Start letting that go and 3 will always be more than one when you have to repair 3 furnaces or A/C units.
All things being equal, yes. But all things are never equal.
And… MF are often in rental neighborhoods, SFR are not usually.
So, making this generalization does more harm than good… is not useful, but harmful. Understanding why and what variables impact what to invest and not invest in is what matters.@Marcelle Abel considering the quality of comments being shared on this thread, my suggesting is to consider it only one source of info and not that any info posted is true. Doing that will protect you because relying on comments of some people could cause you problems and cost you serious money.
If interested, I can provide you with a list of books written by experts that provide “facts”.
Comments on here are only as good as the experience of the person providing them, so “trust, but always verify” what you hear/read, even from me.
I’ve been doing this 20+ years, but I’d say I know nothing,… just developed ways to overcome the countless challenges that have come up in markets I’ve operated in throughout the U.S.
Thank you for your insight!
- Rental Property Investor · Mississippi Gulf Coast · Member since 2022 · 206 posts · 168 votes4y
Aside from running the numbers there are at least two key considerations. First is risk. Three sources of income may be better than one. If two are doing well they can support the third. The next thing is if you close on three properties you will pay three times the portion of closing costs that are non-reoccurring. In my market, the closing fees aside from financing are about $1,250 regardless of the selling price.
In my market, larger properties tend to bring in more dollars because while many guests are millennials, they come with lots of friends and relatives. Many of our guests arrive for bachelor parties, birthdays, family reunions and other small events.
Our larger properties that sleep more 10+ get more business than the ones that sleep 4-6. The income is greater per stay and there are more stays.
There is no doubt that all of our areas are different and you should buy what the market is demanding. Run the numbers and consider risk and closing costs.
- Member since 2022 · 43 posts · 25 votes4yI appreciate your advice and insight, makes sense to make this decision based on the market not necessarily “in general.” Thanks!
Quote from @William Anderson:
Aside from running the numbers there are at least two key considerations. First is risk. Three sources of income may be better than one. If two are doing well they can support the third. The next thing is if you close on three properties you will pay three times the portion of closing costs that are non-reoccurring. In my market, the closing fees aside from financing are about $1,250 regardless of the selling price.
In my market, larger properties tend to bring in more dollars because while many guests are millennials, they come with lots of friends and relatives. Many of our guests arrive for bachelor parties, birthdays, family reunions and other small events.
Our larger properties that sleep more 10+ get more business than the ones that sleep 4-6. The income is greater per stay and there are more stays.
There is no doubt that all of our areas are different and you should buy what the market is demanding. Run the numbers and consider risk and closing costs.
- 4yBruce WoodruffPro MemberContractor/Investor/Consultant · San Diego / Phoenix · Member since 2021 · 12k+ posts · 15k+ votes
Quote from @Jon Q.:
Naw, not actually. Generalizations are just general...... 😂
And if the reader cannot take an obvious stated generalization and figure it out, do some of their own research, etc, then they deserve what they get.....
- Member since 2022 · 43 posts · 25 votes4ySo when I say larger property, I mean a 5-6 bedroom house at say $600K vs a 2-3 bedroom for $250K. Im trying to find the best strategy and if I should a bulk of my current cash budget into the one big property or split it up into a few smaller ones to diversity the equity growth. I know it depends on the market but Im all over the board on how to proceed.
Quote from @Jon Q.:
Run the numbers and do a scenario analysis that includes all risks associated with both property investments.Quote from @Marcelle Abel:
Running into a wall here and would love your thoughts and insights as I try to scale as a new investor. We have a chunk of cash to work with which I had originally planned to buy three STR properties with (traditional mortgage, 20% down) BUT I found a larger property with a larger price tag that looks to cash flow very well if done right. So my question is...do I spend 2/3 of my cash on this one property or stick to my original plan and look for three properties with a more moderate cash flow? Thanks everyone!
Define "larger" property. 4 units? 30 units? 60+ units? There are very important differences with each of these, namely property management.
Also, these type of properties are built in different types of neighborhoods,... and you do not want to be in a "rental neighborhood" which will become a property management hassle.
FYI: I've owned and managed properties all over the country for the past 20+ years. Quote from @Marcelle Abel:
So when I say larger property, I mean a 5-6 bedroom house at say $600K vs a 2-3 bedroom for $250K. Im trying to find the best strategy and if I should a bulk of my current cash budget into the one big property or split it up into a few smaller ones to diversity the equity growth. I know it depends on the market but Im all over the board on how to proceed.Quote from @Jon Q.:
Run the numbers and do a scenario analysis that includes all risks associated with both property investments.Quote from @Marcelle Abel:
Running into a wall here and would love your thoughts and insights as I try to scale as a new investor. We have a chunk of cash to work with which I had originally planned to buy three STR properties with (traditional mortgage, 20% down) BUT I found a larger property with a larger price tag that looks to cash flow very well if done right. So my question is...do I spend 2/3 of my cash on this one property or stick to my original plan and look for three properties with a more moderate cash flow? Thanks everyone!
Define "larger" property. 4 units? 30 units? 60+ units? There are very important differences with each of these, namely property management.
Also, these type of properties are built in different types of neighborhoods,... and you do not want to be in a "rental neighborhood" which will become a property management hassle.
FYI: I've owned and managed properties all over the country for the past 20+ years.It depends…
on the location of the properties, cost of rehab, and cash flow post rehab and stabilization. Size is just one variable.
If you plan to Airbnb, that’s not my business, nor would I do that,… but location is likely the most important variable that will determine rates you can charge. Also, layout will matter a lot and size of rooms. Also, if Airbnbing by room, ideal of layout is done in such a way that you can create increased privacy.Airbnb guests pay for location, uniqueness, and privacy. Ideal are vacation destinations or well-located places in big cities, both of which are not cheap.
When economy is doing well and people have money to vacation airbnbs do well. When we’re heading into recession (like now), not so much. Suggestion: when running numbers on a deal you might buy for Airbnb, also ALWAYS run numbers on if you were to long term lease it (to verify it won’t be negative cash flow), because you may have to (consider throughout covid).
- 4yBruce WoodruffPro MemberContractor/Investor/Consultant · San Diego / Phoenix · Member since 2021 · 12k+ posts · 15k+ votes
Quote from @Jon Q.:
Once again, this is completely dependent on area. Many vacation areas are pretty much immune to a recession. The worse the economy gets, the better we do.....
- 4yJoseph CacciapagliaBusiness MemberLender · San Antonio, TX · Member since 2020 · 1k+ posts · 1k+ votes
I've had several clients run into this same situation. One in particular stands out. She was looking for 2 STRs at about $300K each. We looked at a ton of options, and some of them were OK, but none were terribly exciting from a returns perspective. I came across a $600K home while working with a different client, and decided to run it by her, because it had amazing numbers, even though it was double what she wanted to pay on each. She bought it, and has had an amazing first year. It's become one of the top performers in our mgmt portfolio.
In my market (San Antonio), I find that larger homes tend to have the best short-term rental returns. I also find that you'll spend less furnishing one $600K house than you would two $300K homes. The cost of furnishing has a large impact on your CoC, because it's not typically financed. Running 1 versus 2-3 should also be significantly simpler, if you plan to self manage.
- Realtor · Member since 2022 · 4 posts · 3 votes4y
One bigger, most of the time. Two properties = 2 sets of expenses. If they're going to be cash flowing the same, you'll do double the work for the same output you could have gotten out of 1 bigger property.
Again, this is assuming all things are the same. The income of the 2 being close to the income of the 1, etc.
- Member since 2022 · 43 posts · 25 votes4y
@Joseph Cacciapaglia I appreciate you bringing that up, that basically what Im looking at as well. I have found several $600K properties that have great cash flow as a STR but its a lot harder to find a $300K property with the same return but I had in my mind that I should not be focusing on one bigger home and I should be looking harder to find two $300K homes. With the rates where they are and putting 20% down, purchasing the $600K home eats up a ton of cash so I have been hesitant to go that route if Im only going to getting equity growth from one home.
- Developer · St. Augustine, FL · Member since 2018 · 311 posts · 384 votes4y
I can only comment based on your tone without more details on these deals, I'd assume the larger property comes with a higher risk. I think you can do a worst case analysis and see if you are okay with the outcome in a worst case scenario with the larger property. If large or small, you are okay with the worst case scenario outcome, then it's really just your preference. Higher risk, more upside or lower risk, less upside.
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