Deal comparision: 10 unit apartment vs 10 cottages

[Tou V.]

Trying to figure out which is best.  I know the income / expenses on each will be different, but just for comparison sake make them around the same.  Which would be better?  Both are relatively around the same price range and brings in about the same gross income.  Would you rather buy a 10 unit apartment for 500k or 10 separate cottages on one lot.  These would all be 2bd / 1 bath units.  The apartment units are identical, while the cottages vary in color, interior décor, etc....  Thanks. 

[Tim Cooper]

6 of one, 1/2 doz. of the other.  There are pluses and minuses to either way you go.  

Cottages:  + Might be easier to rent.  + Less problems with neighbors too close. + Easier to separate and sell when you want out.  + or - Might appreciate or depreciate more because of local factors.  - Possible more maintenance (10 roofs instead of one, 10 drive ways, 10 lawns.)  - Because of no real close neighbors, they can be more likely to get destroyed.

Apartment Building:  + or - Appreciation or depreciation will be determined only by rental income, not quite as much on local factors.  + Possible less maintenance.  (1 roof etc.)  + If one tenant is destroying their apt. a neighbor is likely to report it.  - Can be harder to rent if you get one bad tenant.  - Tenants so close can cause problems with each other.  (Noise, smell etc.)

All that being said, with everything being equal; I would buy the apartment building.  But if you can, why not go for both.