Loading
Using the Buy and Hold Strategy in the Housing Market
To buy and hold refers to a long-term investment strategy. This strategy is based upon the idea that financial markets give a good rate of return in the long run, despite rough periods of volatility or decline. It also holds to the concept that it’s not possible to enter into the market at a low point and sell again when it’s high if you’re using a short term investment. In order to best capitalize on the ups and downs of the market and make the most money with your investment, you must buy and then hold on to it for an extended period until the market is much higher than it was at the original time of purchase, and you’re able to make the most profit.
According to many sources, the housing market is at an all-time low right now, making it the perfect time to buy an investment property, whether a home that you wish to fix up or a rental property that you plan on selling later. Keep in mind that you cannot simply buy the property and then hold on to it without performing any maintenance. The property that you purchase will require upkeep at the very least. You may also wish to upgrade or do some changes to the property as well in order to add on to its overall value. Be sure you do a fair amount of research before deciding on which upgrade you will do, as not all upgrades or changes will add a substantial amount to the overall value, but may cost a substantial amount to perform.
An upside with purchasing a rental property as such an investment is the fact that you’ll be able to draw in money while you’re holding onto the property and waiting for the perfect time to sell. A rental property also requires more maintenance than a property you’re just interested in selling at a later point, and often ends up being more time consuming as well.
Once you buy the property, you’ll need to hold on to it for an extended period of time. This doesn’t just mean holding on to it until the housing market gets better, but in order to make a decent profit from it you’ll want to hold on to the property until the market begins to flourish again.
In order to move beyond the holding stage of the strategy and sell your investment property at the right time, you’ll need to keep a close eye on the housing market. Watch the prices of similar homes to see when they’re on the rise, and when they begin to plateau. A real estate professional can also help you to determine when is the right time to stop holding and start selling.