Buy and hold real estate is a long-term investment strategy where you purchase a property to rent it out and benefit from rental income and property appreciation over time. This approach is perfect for building steady cash flow and wealth sustainably. By holding a property and renting it out, you can generate a consistent income while the property appreciates in value. This strategy is ideal for investors looking to build wealth gradually with minimal risk.
A typical mortgage is used to purchase a primary residence (the home you live in). A Buy & Hold private money loan is designed for investments where investors can purchase and rehab properties quickly, to start generating income. These loans provide capital to purchase and improve properties, making them ready for tenants and increasing the property value.
Find properties located in areas with consistent rental demand and strong potential for long-term value growth. Both residential and commercial properties can be suitable for a Buy & Hold strategy.
Once the home improvements are complete, borrowers typically look to refinance to longer term traditional loan. The use of private money is strategic to execute purchase and rehab quickly with the intention to eventually convert to a lower interest rate loan.
Understand the rental rates and comparable rentals in your area. Vacancy, unexpected maintenance, and managing the rental process can all considerations that an owner needs to consider. Some owners will choose to pay a property manager to manage renters and property maintenance. While a property manager is convenient, the management service comes with a cost that needs to be factored into the property’s profitability.
