Buying and holding real estate can be one of the most rewarding long-term investments you can make. But, it also comes with a fair share of risk. It’s a strategy that requires patience and planning.

Before you begin investing in buy-and-hold real estate, you should have a clear understanding of your investment goals and responsibilities. You should also determine what property type and market you prefer to invest in, as well as how involved you want to be in the process.

Finding the Right Property

The first step in a successful buy-and-hold real estate strategy is to identify and purchase a property that has strong rental potential. This means a property that will rent for a high enough amount to cover its operating costs, plus provide a return on your investment.

Once you’ve found a property that meets your criteria, it’s time to start the financing process. You can use hard money loans, private money, seller financing or partner deals to fund your buy-and-hold real estate investment. Learn more


Having a clear exit strategy is important in any investment, but especially so for buy-and-hold property investors. You’ll need a plan for when it’s time to sell your property, or you could end up losing out on profits in a down housing market.

You’ll also need to know how much you can afford to spend on maintaining and repairing your property. This includes deductibles for repairs, mortgage payments, insurance, and other costs that can deplete your cash flow.

It’s also important to consider the neighborhood and its future growth and development. The neighborhood will have a direct impact on your renters’ experience and the price of your property.

In general, you should choose an area that is affordable and growing at a steady pace. This can help ensure that your property continues to generate positive cash flow and increase in value over time.

While you can’t pick up and move your rental property if the city or neighborhood changes, it is possible for major employers to close or for tax increases to cause significant decreases in your home’s value. To minimize the impact of these risks, it’s a good idea to do your research on the future development plans of the community where you want to invest in buy-and-hold real estate.

Another benefit of buy-and-hold real estate is that it can generate recurring monthly income, which can be a key part of your overall investment strategy. In addition, buying and holding real estate can help you to build a diversified portfolio.


As with any other investment, it’s a good idea to create a business plan for your investments that outlines short- and long-term goals. These goals will help you to develop an effective buy-and-hold strategy and track progress toward your overall financial objectives.

The best way to do this is by evaluating your current investment portfolio and determining which properties could be a good fit for your overall strategy. This will ensure that you’re making smart investment decisions in a manner that aligns with your personal goals and objectives, as well as your overall portfolio risk tolerance.