Buy, Hold & Sale Rental Properties: My Own Perspective
The question of whether flipping or buying and holding real estate is the best strategy for investing in property doesn't have one correct answer. Instead, choosing one method over the other should be part of a clear strategic plan that considers your overall goals.
Looking for an investment strategy that helps you create ongoing passive income? Income streams that will keep coming in for the rest of your life
That’s the beauty of the buy-and-hold real estate strategy: you put in the work and money once, and give yourself the gift that keeps on giving. Forever.
Residential real estate ownership is gaining ever-increasing interest from retail investors for many of the following reasons:
- Real estate can provide more predictable returns than stocks and bonds.
- Real estate provides an inflation hedge because rental rates and investment cash flow usually rise by at least as much as the inflation rate.
- Real estate provides an excellent place for capital in times when you're unsure of the prospects for stocks and bonds.
- The equity created in a real estate investment provides an excellent base for financing other investment opportunities. Instead of borrowing to get the capital to invest (i.e., buying stocks on margin), investors can borrow against their equity to finance other projects.
- The tax-deductibility of mortgage interest makes borrowing against a home attractive.
- In addition to providing cash flow for owners, residential real estate can also be used for a home or other purposes.
The buy-and-hold real estate strategy is, well, exactly what it sounds like. An investor buys a property, rents it out, and holds onto it for the long term – typically five years or longer.
Sounds simple, right? And it can be, although it’s not without its own challenges. More on them shortly.
A buy-and-hold real estate strategy is a straightforward way to start your real estate investing journey. As you gain experience and capital to work with, you can scale the strategy to create a series of income streams to grow your wealth over time.
Keep in mind that long-term ownership does not necessarily mean the property must be leased as a long-term rental. Owners can use the property as a vacation rental or short-term corporate rental as well, potentially for higher returns.
Given its simplicity and ongoing passive income, the buy-and-hold real estate strategy remains one of the most common approaches to investing in real property.
Ongoing, Predictable Income from Buy-and-Hold Real Estate
One of the greatest advantages of a buy-and-hold real estate strategy is the ongoing passive income.
Most importantly, you can predict that income before buying the rental property. By analyzing the real estate cash flow and running the numbers with a rental property ROI calculator, you know exactly what kind of return you’ll receive on any given property.
That means never making a bad real estate investment if you learn how to calculate rental cash flow properly.
While landlords’ expenses vary month to month, as a long-term average they can be predicted. Sure, you may have a vacancy periodically or need to make the occasional repair, but by budgeting for the neighborhood’s vacancy rate, CapEx, and other irregular expenses, you can budget for them accurately.
You can even reduce turnovers and expenses through tenant retention programs and thorough tenant screening.
Source
https://www.lendinghome.com/blog/how-to/buy-and-hold-real-estate-investing
https://www.wallstreetsurvivor.com/starter-guides/investment-strategies/
https://www.thebalance.com/top-investing-strategies-2466844
https://www.fortunebuilders.co...
Deb Bandyopadhyay | @debadipb | www.debadip.com
Quark Realty | @quarkrealty | www.quarkrealty.tk
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