Hi Prospects & Friends!
Whether you're analyzing residential or commercial properties, certain properties make more sense to use the buy/hold strategy. A buy/hold strategy is a technique applied, when a property makes more sense to just hold it to reap the profits longer term. These properties maybe;
- Raw land
- Revitalizing communities
- Rental properties
- 1031 Exchanges
- Apartments
All properties are very different, and carry different characteristics, and when applying this to economical factors, the buy/hold strategy comes into play immediately when these key factors join together. A buy/hold strategy wouldn't make sense if you're needing the appreciation and the equity from the properties immediately short-term, since you would also trigger capital gains taxes, and recaptured depreciation disposing the property short-term. Buy/hold strategies also don't work great for everyone, since you need to know in advance how long to hold the property, before you purchase it. Best key factor to decipher is know why you're buying the property, and then apply this to the economical factors to see if it falls better in a buy/hold strategy.
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