5 Reasons to Buy, Rehab, and Hold onto Real Estate Right Now
As flipping opportunities dwindle, real estate investors are looking for another approach and all economic signs are pointing to Buy, Rehab, and Hold. For instance, rising population growth rates and flourishing job markets in numerous urban areas is increasing rental demand. Plus, Millenials and baby boomers prefer to rent homes than buy them. For a savvy real estate investor, all these long-term economic factors mean that buying, renovating, and holding makes better sense right now than flipping. In fact, here are five reasons why it’s better to buy, renovate, and hold real estate right now.
5 Benefits of the Buy, Renovate, and Hold Real Estate Investing Strategy
1. Professionals are willing to pay more to rent better places.
With increasing prices in populated housing markets, people are deciding to wait longer before buying their first homes. However, they’re still looking to enjoy a great place to rent, like a place full of amenities in a good location, and are willing to spend more on rent in order to get that.
2. Holding the mortgage longer can be cost-effective
Financing interest rates remain low, which means holding a mortgage longer can be cost-effective, especially after you’ve performed renovations. While you rent out your investment property, you’ll save money on interest rates and the mortgage while earning passive income from rent. After a few years, thanks to the rehab and appreciation, you can then sell the property for profit.
3. There is less new construction due to regulation and margins
With new construction slowdowns, the rental demand is rising, especially in areas where the population growth rate is continuously increasing. Thus, you won’t run out of tenants and you’ll have a consistent cash flow. Plus, higher demand leads to higher rental prices, which is always ideal for investors who are looking to build income.
4. There are a lot of affordable homes that need renovation
More than half of the homes in America are over 35 years old and 38% of them were built before 1970. These types of properties have the potential to bring you greater profit, because once rehabbed, they’re likely to rent out at a higher rent amount and sell for a higher price tag. Additionally, due to the age of the homes, purchasing these types of properties can be very affordable and with a few modern rehab updates, you can see returns in both monthly rent and post-sale.
5. How to finance your buy, rehab, and hold real estate investment
When figuring out how to finance your buy, rehab, and hold real estate investment, you have plenty of options available (FHA loans, angel investors, partners, etc).
But Private loans or cold cash is by far the most popular choice and our main focus here. Private-lending companies like Apollo Square Capital have a simple and quick online lending process. The Apollo Square Fix and Hold loan program is ideal for those who need to finance the acquisition and renovation of their investment properties fast. With this loan, you can nicely rehab your investment property and stabilize during prevailing market rental rates.
For the Apollo Square Fix and Hold loan program, interest rates start at 6.99% with 85% LTV and 100% of rehab. Additionally, you need no income qualification and there’s no prepayment penalty. To learn more about the Fix and Hold loan program, get in touch with the Apollo Square team!