Tortoise or Hare? Why Buying and Holding Real Estate Makes for a Winning Strategy.
Buy and hold is a long-term approach to real estate investment. Instead of flipping for a quick lump sum, you’ll hold on to your investment and use the rental market to earn a regular income.
-Buy and hold – why should I be interested?
There are heaps of benefits for investors who choose to hold onto their property portfolio. Flipping houses can be lucrative but risky. If you’re unlucky enough to hit a dip in the market you could be left with the dilemma of either selling for reduced profit or paying off a high-interest loan until the market improves.
Buy and hold also involves fewer transactions – and the cost is spread over a longer period of time. It’s also good news on the taxation front. Not only can the tax paid on long-term capital gains be lower but might only be due if you sell the property.
Properties that need maintenance, reconfiguring or repairs create value from the get-go– your work has just increased its asking price. Your investment needs to start paying, so get the property ready for the rental market as soon as possible. The highest rent you can achieve isn’t always the best strategy – go for a low but regular turnover, so you’re not constantly on the lookout for new tenants.
So why should you go with buying and holding real estate? Hanging on to your investment makes the most of long-term market stability and gives a good rate of return. Flipping might sound exciting but playing the long game can give you a solid financial income – without losing sleep.