Property Management Blog

Why You Should Buy Real Estate and Hold onto it?

System - Thursday, February 3, 2022

We are helping the owners we work with consider wealth and how real estate investments can attract more of it. Last month, we reminded you what it means to build wealth with real estate and how we help you on that journey. This month, let’s look at why it’s so important to buy real estate and hold onto it.

Buy and Hold is Exactly What it Sounds Like

The buy and hold strategy is where an investor owns a piece of property for the long term - at least five years and as long as 30 or more years. Property value increases over that time, cash flow comes in pretty consistently when rent is paid, and tax deductions bring down what you owe to the IRS every year.

So Why Should You Buy and Hold?

Maybe it’s tempting to buy, rehab, and flip homes. A lot of owners are making money on Airbnbs, so it’s tempting to go that route with your investment property, too. Buying and holding a long term residential rental property is really your best wealth-building strategy. Here’s why.

  • Consistent rental income. Your monthly cash flow means you’re making money without selling.
  • Appreciation. The longer you hold your asset, the more valuable it becomes.
  • Equity. The more your property grows in value, the more you can access that equity to finance additional real estate purchases - which builds additional wealth.
  • Tax benefits. Reduce your tax exposure by claiming mortgage interest, depreciation, taxes, repair costs, and your property management fees.

Buying and holding also protects your investment portfolio from inflation and don’t forget this: real estate is a tangible investment. No one lives inside a stock or their crypto currency.

When we lease, manage, and maintain your home, it’s with the intention of helping you build wealth through a passive investment. You don’t have to do anything - we are right there, on top of every detail.

See you next month, when we take a look at what comes next in your wealth building endeavors.