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Residential Real Estate Investing Buy And Hold Strategy

Residential Real Estate Investing Buy And Hold Strategy

 

Residential real estate investing is a diverse set of techniques.  For real estate investors who dont feel comfortable with a fix and flip real estate investing strategy, there is the buy and hold strategy.  More commonly known as becoming a landlord.   The biggest benifit of this strategy is the long term cash flow.  Buy and hold investors invest for cash flow.  If creating wealth is your goal, there is no better way to invest than the buy and hold method of real estate investing.

Flippers and rehabber approach real estate investing as a way to generate large chunks of cash.   The problem with this approach is that they need to be constantly on the lookout for real estate deals which have a substantial after rehabbed value.  Buy and hold investors, called landlords, dont have to work so hard.

The greatest joy of being a landlord is that you get passive income every month.  That is income that you dont have to do anything to collect. Renters pay for you to buy the property, and you inturn manage the property to maximize profits.

Along with cash flow, a buy and hold investor also gets appreciation on the property.  That is the increase in value of a property of time.  Imainge that you investing for retirement.  You buy a single family house for $100,000.  Do you expect that same house to be worth $100,000 in 30 years?  historically, houses have gone up in value with only a few interruptions in the market.  This alone can explain why real estate has created more millionaires than any other investment in American history.

Buy and hold investors also get a gift from the IRS.  Its called depreciation.  Depreciation is the idea that the useful life of real estate is a short 30 years.  I assure you that is not the case.  I live in a city in the north east, where many houses are over 100 years old.  The way the IRS treats real estate, you get to write off a protion of the value of the entire property every year.  In some cases, you can really speed up depreciation, but that is a conversation for another time.

The next topic that we will discuss in real estate investing is the lease-option.  Lease options are a tool for the real estate investor who has no money and no credit.  Buying a home with no money and bad credit is not a myth, it just takes so education, and we can help you with that.

If you dont have the desire to learn how to invest on your own.   Then maybe you should look at having a professional real estate investor partner with you, as part of our done for you real estate investing program.