Investment Strategy #8: Buy and Hold


The whole point of getting into real estate is to arrive at a place where you can get out of real estate (or get out of working period). Buying and selling properties for large chunks of cash is great, but you don't want to have to do that for the rest of your life. There will come a time where you'd rather take a couple months off for vacation or just retire altogether. This is made possible by holding on to properties.

If you bought 20 properties 20 years ago, you'd likely be making $10K~$15K a month in rent. This is passive income. This is income that arrives in your mailbox whether you work or not. If you pick up 10 or 15 properties over the next 5 years, or maybe some larger commercial property, is $5K~$10K a month enough to cover your bills? If your bills are $4,000 a month, and you've got $5,000 coming in the mail each month, guess what that means? You can sit around and watch TV for the rest of your life if you wanted to. If your bills are $4,000 a month and you've got $15,000 coming in the mail each month, then you've done something that most people don't know is even possible--you're free to do what you want for the rest of your life.

We live in a world where most people work for 40 years, save (or try to save) all their spare change in a retirement account, and hope they'll have enough to live on when they retire. What happens if they didn't save enough? What happens if they've got 20 years of retirement money but they live another 25 years? Do they go back to work at age 80? Do they become a burden to their children? The beauty of owning rental property is that the checks keep coming in the mail for as long as you own the property. Those checks will get bigger because rent goes up with inflation. When you do die, those checks go to your family members. It's a beautiful thing, and if you've got good passive income it doesn't matter if you're 65 or 35, you can retire and you've got income for life that won't run out.

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