Hypothetical - 15-Unit Apartment or 5 Single Family Homes (All numbers being equal)

[Justin Brickman]

One of my client's asked me if I had to choose a portfolio between one 15-unit apartment or five single family homes, which would I choose? If all numbers were equal (purchase price, repairs, cash flow, expenses, etc). I know my answer, but I thought it was a good exercise to see how some of you would answer in today's market.

[Bill B.]

SFR: better appreciation, less turnover (in raw numbers and average length of stay), better tenants, no tenant on tenant conflicts, better rate financing, longer term financing, more buyers if you want to sell, or need to sell, you can sell 20,40,60,80% or 100% of your investment not all or none, you have almost infinite cash out options, better and more insurance options, you can leave your investment to multiple heirs that will actually want a house instead of splitting an apartment building, when you sell you're probably selling to an owner occupant who loves the house/location not an investor looking only for the best deal they can find, more diversification, not responsible for landscaping/utilities/maintenance of "public areas", surrounded by other houses not other apartment buildings or businesses, one problem tenant doesn't affect the others, you could 1031 a portion of your investment, you could move in to one and get a tax break when you sell, I'm sure there's 10-20 more good reasons.