Success Factors of Buy and Hold Property Investment Strategy
Date: Wednesday, July 02 @ 20:08:54 MST
Topic: Real Estate
Many investors buy a property for investment, intending to rent it out for several years, then sell it. This is called a buy and hold strategy. To be successful, you need to factor in several important considerations.
Firstly, what cycle is the market in at the time of purchase? If it is at the peak of a boom, then you risk paying so much that it could be years before you can sell at a profit. But if the market is only just recovering from a bust it is on the way up. You will then pay a reasonable price and can expect o realise a profit in several years - or less.
The location of your buy and hold property is also important. You must rent it out to cover your mortgage payments, so if it is in a prime location close to amenities, it will likely be easy to keep a tenant in it. In this scenario, you should choose the best street, but the worst house in it. You should also pre-qualify tenants to make sure you don't get someone who is likely to trash the place, then disappear.
The condition of the property is important. Brick may cost more, but there won't be the maintenance. No need to paint means you keep that money. Structural soundness is also important. Even if you hate the numbers game, do it anyway. Learn how to work out what your costs will be and if the numbers don't work, then walk away. Don't let your emotions get involved.
Visit the Saville Australia website at http://www.savilleaustralia.com.au for more information on the company as well as residential property investment opportunities with luxury apartments.
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