Buy and Hold – Reliable Real Estate Investment
As the name suggests, buy and hold is the principle where the buyer buys a property and holds it for an extended amount of time, ideally until the property value increases and the buyer can sell it for more than it was purchased.
The investor needs to be sure and do their research of properties to best identify property types (single family/multi-unit homes) in areas that have been tested and trusted to generate high rents.
Once the property is purchased, the investor can rehab the property and then look for a qualified tenant.
Tenant selection is an important consideration in buying and holding, as having a good tenant will reduce the amount of damage to the property, and enables the investor to protract investments until the tenure lasts. A good tenant will bring forth the need of installing only the minimal updates. The investor also needs to make sure the property is in a stable rental market that is not saturated fully.
Proper buy and hold investments provide steady cash flow from rents and pay off loans in due time, making way for a monthly income.
The technique of buying and holding takes after the “slow and steady wins the race” approach by creating residual income for the investors, maturing equity exponentially through the tunnels of principle pay down, appreciation and the advantage of low-volatility.