Buying two cheap houses or one expensive house to rent?

[Galit Garsiel]

If you have 500k, and you want to buy and rent, which is more profitable, buying two houses for 250k and renting them out, or buying one house for 500k and renting out? 

Which method will bring more money? Will it take less time to rent out 250k houses?

[Jonathan Greene]

The answer is in your question. What is the combined expected rent roll of the two houses versus the expected rent roll of the one house? Your answer is there, but also the cheaper houses may come with more capital expenditures so the upkeep of the homes is of paramount importance when weighing that against your potential rent roll. Your downpayment percentage should be the same so it's about upkeep and cash flow. Also don't forget to judge the areas for appreciation. If the two 250k homes are in gentrifying areas, you could make more on appreciation, but if the 500k is in a hot area you will get the benefit of solid appreciation over th e long haul even if we did for a year or two.