3 Key Factors in Buy and Hold Real Estate Investing Success

by | BiggerPockets.com

As a Buy and Hold Investor for 10+ years I have seen a lot of things, made some mistakes and met a lot of people in the real estate business.  This collection of experience has lead me to form an opinion on what makes a Buy and Hold Investor Successful. In this article I will focus on 3 characteristics or strategies that I find are key to long term success in Buy and Hold Investing.

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You Make Money When You Buy

The first thing I want to discuss is the standard statement of “You make your Money when you Buy.” When I started investing I thought I knew what this meant but in reality I had no clue. I got lucky because we were buying property in a rising market and thus, “luck” insured we were well taken care when we started investing.

I don’t know about you but I don’t believe in “luck” as a business strategy.  I will take all the good luck we receive, but I will never count on it. After 10 Years of investing I have a much better understanding of the statement that you make your money when you buy. 

The first thing to understand is the purchase price of a property is only one factor that can drive making money when you buy. In fact, I think the really good investors look for opportunities where creativity and deal structure will drive the best value, as anyone can write up a low ball offer and on occasionally get it accepted. 

I like deals where I can create value by addressing problems with the property, such as finding those with lots of deferred maintenance or with a general low quality of the property.  In addition I like to find properties that can be bought with one configuration but which can quickly be converted to another.  For example I will buy all of the 2 Bedroom, 1 Bath Houses that I can turn into 3 Bedroom, 1 Bath houses.  The math is great when you can buy a 2 bedroom and then rent a 3 bedroom. 

Lastly I like to find deals where I agree to a price that I think is high but put together a financing structure that is very beneficial.  For example, maybe I get the seller to finance the property at a low rate or I get the seller to take back a second mortgage at zero percent interest. 

In the end as a buy and hold investor I want to maximize my yield of the asset and price is only one factor that controls making money when you buy. 

Fast Occupancy and Low Turnover

Second, I want to ensure Fast Occupancy and Low Turnovers.  One of the components of buy and hold investing that I enjoy the most is reviewing a distressed asset and envisioning how we can turn it around quickly. 

As a buy and hold investor one of your most important tasks is to quickly attract tenants and then ensure they stay as long as possible.  This means that I generally fix the exterior first and I put in a sizzle feature or two that will force prospective tenants to stop the car and look at my rental property.  If they don’t stop the car, they won’t rent your property.

In addition I want to ensure that I am providing the best quality home at any given price point.  There are lots of landlords in my market and I want to make sure that when two or more similar rental properties are compared, mine look to be a step above the rest.  The good news in my market, is that you do not need to spend a bunch to provide that noticeable difference.   Simple clean up can be enough.

Establishing a Defined and Repeatable Process

The characteristic that has made us the most successful is our creation of a defined and repeatable process.  When you have a defined and repeatable process you can look for opportunities to improve and tweak your model.

The process does not need to be complicated, and in fact it should be easy to understand. Our process starts with constantly staying in the market, talking with new agents all the way through closing on a deal, and properly repairing the property.

Every member on our team knows the process and they all actively participate to ensure we complete the process efficiently and effectively. 

In summary a successful Buy and Hold Investor:

  • Makes their Money when they Buy
  • Ensures Fast Occupancy and Low Turnover
  • Has a Defined and Repeatable Process

Good Investing

Photo: RuTemple

About Author

Michael Zuber is an active buy-and-hold real estate investor who still has a full-time job. Michael is not an agent or broker, and simply uses the internet and agent relationships to drive his business. He currently averages at least one deal a month and has developed laser focus on his 5 step process.


  1. Michael– all excellent points. I used to think “making money when you buy” was just an old timer’s cliche, but I’m a believer now. And we spend a LOT more time screening for the perfect long-term tenant than we used to… an eviction, make ready, and re-lease will kill two year’s profit every time. I’m interested in your thoughts on the “buying in the right market vs buying where you know” debate for buy and hold owners?

    • Hi David

      As to your question, I believe in live where you want and invest where the numbers make since.

      That said I think you are really asking invest local or invest out of state. I am lucky in that I can drive to my market where the numbers work so I invest Local.

      Good Investing

  2. You sure know how to pick sexy houses – lol! All good points! You’ll be happy to know that your second point helped me get my latest rental filled fast. The first thing I did was get the grass green, planted a few cheap flowers and BOOM – we had three applications. We didn’t even have a kitchen installed yet – ha ha!



  3. Ray,

    I love the idea of trying to make every dealbetter than the last one. Also ask yourself after every deal what could have been done better

    Good Investing

  4. I learned my lesson the hard way on appearances. Long vacancies far exceed the cost of a little sprucing up. I will remove bars on windows, install sprinklers, add back splash and harp on and make sure the lawn is maintained. Overkill for some, but I have noticed a real difference in turnover and turnover times.


  5. I am so glad to see someone else preaching that you make your money when you buy. This is one of the most important things to consider when buying real estate. And not just for investors but for anyone buying their personal residence also.

  6. Mike,

    Firstly, I totally agree with your first point, you make the money when you buy, second excellent the idea to fix first out side of the house I’ll put that in place . Finally I have a question, would you please give me an idea of the square footage ratio between 2 be-1Ba to be converted on 3 be-1ba? I love that idea too.

  7. Any tips for outside “sizzle”?
    I am in a good position right now (last tenant turnover time was 2 days, & so far current tenant seems pretty happy), but outside appearance is the weak point of the property. It’s a manf, & looks “blah”.
    I planted trees, but past tenants haven’t taken particularly good care of young trees, so all but one died, & the yard continues to look pretty barren. Everybody loves the interior when they walk in, and the most common comments are “it looks so much nicer/larger/etc from the inside” (and my favorite “our whole house could fit inside the master suite & dining room….”).
    My tenant screening is very rigorous, so the last two times it hasn’t even been shown except to the final approved applicants, so I have the inside “desirablity” down pretty well, it’s just the outside curb appeal… . Ideas? Done anything with gazebos or arches?

  8. Brian Fredrickson on


    I have been in sales and the key to success is to have a defined and repeatable process for success. I am just going to 1 grade, if you will, on investing in real estate. Can you share your process that you use to have that repeatable process.

    Willing to take it in like a sponge,
    Brian P Fredrickson

  9. aaron chung

    Great advice Michael. As an aspiring buy & hold investor and someone in design industry , I also believe in putting out the best product – the look & feel and condition of your property – for a long term success. Much thanks and looking to hear more about your experience and learn from it!

  10. Ben Owens

    Yes, great wisdom to be found even in the posts from informational articles from years ago. As previously owning/operating a landscape/yard renovation business, curb appeal is not just for the doors/entryway and face of the house, but for everything leading up-to that point. Having done landscaping for personal homes, rental homes, and misc commercial, they all have different goals in mind. Speaking in regards of long-term tenants, a well planned front yard draws them in, great housing/structure makes them want to stay, and(if applicable) the properly designed backyard will lock them in. Depending on the area and region and size of the property, I like to install low maintenance native plants, helping keep the ecosystem healthy and worry free. While more mature trees can be costly and require a bit more front end attention while they get settled in, trees that are too young make it seem like you are putting a band-aid on the issue. Always keep your long term goals in mind, and adjust accordingly.

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