Top 3 Strategies for Finding Buy and Hold Properties

Housing inventory around the country is – and has been – low for the last few years. With the market so competitive, it can be a tough challenge zeroing in on the perfect buy and hold investment property. You don’t want to pay too much on the front end, and you want something that you will be able to rent out as quickly as possible. You also want to be reasonably sure that you’ll be able to resell the property a few years down the line for a good profit. So how do you begin your search? Here are five strategies:

1. Set your parameters, then be patient.

Buy and hold investing isn’t something that you should jump into blindly. Some investors make the mistake of finding a property first and doing their research second. This is the most tempting approach – it’s a lot more fun looking for houses and apartment buildings than it is crunching numbers. But this route is always a mistake.

Even if the property is perfect, you’ll waste a lot of time figuring out whether or not the property is right for you before pulling the trigger, and in that time, someone else will swoop in and steal the property out from under you. Alternatively, you might pull the trigger too quickly and end up with a money pit on your hands.

It makes a lot more sense to figure out what type of property will be best for you, how much you want to spend, what neighborhood is best, et cetera, and then wait until something comes along that suits your needs.

2. Be ready to pounce.

Waiting for the right property doesn’t mean sitting back and hoping you hear about some place great. It means being on a constant lookout and being ready to act quickly when an opportunity pops up. To that end, you should stay on top of all the major house hunting apps, even if you work with a realtor. Set alerts so that you know within minutes when a great house becomes available.

You should also prepare to act by setting up your buy and hold financing in advance and putting together your team. Secure a promise of buy and hold financing from a partner, a bank, or a private money lender. And make sure that you have a contractor, a decorator, a gardener, and/or a property management firm ready to make your new investment property appealing to tenants as quickly as possible.

3. Think outside the box.

Another way to ensure that your wait for the right property isn’t too long is to open yourself up to different types of buy and hold investments. If you’ve only ever rented single family homes, why not consider a small apartment building? If you own apartments, why not expand to townhouses or duplexes? What types of homes do people in your area seek out? Think like your tenants, which may be very different from how you’d rent for yourself.

The same goes for any renovations you implement. Think about who you’re renting to and make adjustments accordingly. That might mean adding a playground to a family-friendly apartment building or adding extra parking spaces. It might mean choosing the building closer to the metro station or in this school district instead of that one.