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 Hold Property?
If you need a bridge loan to purchase a buy and hold property in Atlanta or the surrounding areas, we may be able to help you.