What is the Buy and Hold Strategy in Real Estate?

If you’re interested in real estate, then you may be interested in learning a bit about the buy and hold strategy. This strategy is essentially a long term investment strategy whereby an investor buys and holds a property for a time being. This form of investment is best when a market is developing and it may continue improving for a number of years.

This strategy has been around for a very long time and has oftentimes been the strategy used by the richest people in history. To invest in this, you will have to buy and hold a certain type of property. Instead of buying land, developing it, and then reselling it, you will only need to buy it and wait for its price to increase and then make a decision of whether to sell or not. Furthermore, while you wait for the land value to increase, you always have the option to rent the land out.

How to utilize the strategy

Always ensure that the market will develop. The first step in utilizing this strategy is determining whether you really want to buy and hold. Are you really ready to take such a risk? In real estate your gain is the difference between the purchase cost and the selling cost, so you want to do your research when it comes to the area you are thinking of purchasing. Ask around. Also, you have to be patient and willing to wait a while for the value to increase.

Find suitable property and buy. You will have to look for solid property to invest in. You should consider some elements like proximity to a school, general location within the larger community, and the immediate neighborhood. Finding a property in excellent condition can be beneficial. However, you do have the option to purchase less-then-optimal property and do some clean up and maintenance.

Decide on whether to lease it. Your main goal is to wait for the property’s value to increase and then sell it. However, having a short-term plan is also important. You can gain a monthly income by simply renting the property to a tenant.

Sell the property when its value increases. If your property highly appreciates in value, you should sell it and enjoy the long awaited profit. When selling this property, you may have to use the services of a real estate agent and also list it in newspapers and even online.

The buy and hold strategy works quite well when you do your homework when it comes to location and market. Learn more about this strategy and begin looking for properties that suit your budget and scope. You may just make some excellent money in the long run!