Here's why now is a great time to buy and hold an investment property
We at The DARE Network Group understand that buying your first investment property is a big financial decision that’s specific to your needs, but if you have a lot of money saved up that’s not necessarily ‘working’ for you (i.e., not making you more money), you may want to consider an investment such as a buy-and-hold property. There are two reasons why.
The first is the fact that interest rates are still at almost all-time lows. It’s been nearly 50 years since they’ve been this low. That means you’d ultimately be getting money below inflation. In other words, you’d almost be getting money for free.
Second, there are still a lot of great deals out there. You can find a lot of properties off-market or identify sellers who want to sell quickly. Over the past year, my wife and I have bought two investment properties—both at a rate of 3%.
Most importantly, though, you need to educate yourself before taking this big of a step. For example, we use what’s called a ‘hold worksheet’ when buying this type of property. I love this document, and if you love numbers, you’ll love it too. It’ll show you how much of your debt will be paid down, what you’ll net in terms of monthly cash flow, and the amount of appreciation. We consider appreciation as icing on the cake, but this document will estimate your appreciation over the course of 30 years.
Several of my clients have bought investment properties for each of their children. Then when they turn 18, they sell the properties and use the accumulated cash flow to pay for their college education.
If you have questions about buying your first investment property or there’s anything else I can help you with, don’t hesitate to reach out to me. I’d love to hear from you.