Better to Buy Many Properties or Ever Larger Properties?

[Scott Trench]

So here on BiggerPockets, we see a lot of investors who have bought tons of properties. It seems like the guy with the most deals under his belt is the most relevant to any discussion. It also seems like a lot of investors come to BiggerPockets with the goal of buying "one property this year, and having 20 in ten years" or some similar goal.

This goal - of owning many many properties, used to be mine. Lately, however, I've been seriously questioning this logic. I can't decide whether I'd rather own ever larger and more scalable properties, or whether I'd like to own a large number of SFRs and Small Multifamilies.

I see a couple of pros and cons to both approaches:

For the investors looking to buy lots of smaller properties, he is able to get to know a specific niche very very well, and hone in on a process that he can repeat over and over again. In short, he (or she!) will become an expert in this area, and can continue to reap excellent rewards over the long-term.

On the other hand, this investor will have dozens, or maybe even hundreds of scattered properties to manage. That could be a pain and will require a complex management system.

For the investor looking to continually scale up and buy larger and larger commercial properties, he gets to take advantage of scale with each purchase, and the economics of having a larger investment in one, easier to manage location.

The big commercial investor, however, might see disadvantage in that if he continues to scale, each purchase is of a larger and new type. He will have to continually adapt and grow, perhaps more so than the investor purchasing the same units over and over again.

I realize that I'm still a fledgling investor here, so I'd like to hear from both sides of the coin. What are some additional pros and cons of these two differing approaches to buy and hold real estate investing?