Would you add units to existing or purchase new property?

[Tandi H.]

We are debating this question.  If you had to choose one, would you rather:

A.  Add a couple units to existing properties.  Let's say each additional unit costs $25,000 (building into an existing structure like converting a garage into a one bedroom).  Total expense of $50k for two new units, with new rents of $700/mo/unit.  B to B+ neighborhood.

B.  Purchase a new property.  E.g. $200k duplex, $50k down payment.  Minor repairs, rentable as is.  $800-900/mo/unit.  B- neighborhood.

Both options cost $50k.  Adding new units to existing properties minimizes new property expenses like utilities, taxes, insurance, closing costs, etc.  However with low interest rates, maybe it would be smarter to get the new property now, then add the additional units at a later point?  Are there other factors to consider?