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There are 5 main reasons why I believe a buy and hold strategy is far superior to a buy and flip strategy:

Reason 1. You can buy cheaper properties.

I frequently buy 3 bedroom 1 bath houses for between 10 and 20 thousand dollars a piece. If you don’t believe this is possible, just pull up Zillow and start searching for homes in this price range. (They are more common in the midwestern and eastern portions of the U.S.)
While these properties earn me a lot of money in yearly rent, they wouldn’t have done very well if I had bought them for the purpose of flipping. At best I could have profited 10k from any given one of them…(as opposed to between 6 and 10k a year by renting them out).

Reason 2. Inexpensive Rehabs.

Getting a house ready for a tenant is much cheaper than getting a house ready for a buyer. Because I buy my houses for the purposes of renting, I don’t have to worry about granite countertops, crown moulding, or expensive recessed lighting. Instead, I focus on making my properties clean, safe and functional. Since I’m mostly competing with slum lords (who don’t keep their properties clean, safe or functional) my houses never sit for more than a day or two before getting rented out.

Reason 3. You Make More Money.

A good buy and hold strategy can almost always make you more money that a buy and flip strategy. The second property that I ever purchased cost me a whopping total of 12,700. I rehabbed it myself, an after putting down new floors, painting the inside and outside of the house, and installing new appliances, I still had less than 20,000 dollars in the property. That house earns me over 9k a year. You simply can’t make those kinds of steady returns when flipping.

Reason 4. It makes Wealth Building Easy.

I earn an average yearly return of 40% on each piece of real estate I invest in. That means that if I put all of my profits into purchasing more property, I am essentially compounding my interest. 10 years of investing this way will earn you over a million dollars, and give you a passive income of almost 40k a month.

Reason 5. You get a LOT for a little.

When you purchase property for the purpose of renting it out, you only have to put in the hard work once. After that, your property will earn you money for the rest of your life. There isn’t a single person in the U.S. that can’t become wealthy by investing this way, as long as he or she has a solid work ethic.

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