If you’re a new real estate investor, you may have heard the term “buy and hold” property – but what does it really mean, and is it something you should look into doing?
What is a Buy and Hold Property?
Although flipping homes is one of the more popular forms of real estate investing, “buy and hold” is a very viable alternative. Naturally, it depends on what type of investment you want to make. However, purchasing a buy and hold property is different from buying a home that needs to be rehabbed.
Buy and hold properties are those the investors purchase with the intention of keeping for quite some time. While a hard money loan may not be the appropriate source of funding for a buy and hold property, every situation is different. (If you think you may meet our hard money loan criteria and you intend to buy and hold a property by later securing traditional financing, we may be able to help you.)
Some people choose buy and hold properties as an investment for a number of reasons, including:
The market cycles naturally, but statistically speaking, real estate appreciates in value over time.
Income stream. Holding a piece of real estate can provide a steady stream of income for several years. Profits increase once the home’s mortgage is paid off.
High return on investment. While not all homes will turn out to be profitable, some will – especially if you make improvements that increase the home’s value.
Whether you own the property for a year, 10 years or 50 years is up to you. If you’re not happy with your investment, you can sell it and look for a new property.
Do You Need a Bridge Loan for a Buy and […]