Buy and hold rental real estate is one of the most common ways to invest in real estate and one of the most simple to understand. I mean, you buy a house, you rent it, and you make profits each month with your rent. Sounds simple? That’s because it really is that simple. So why do you need a college education? You don’t. The absolute and most important key here is to be certain that all of your house monthly expenses are covered by your monthly rental income. The difference is your monthly cash flow and of course, the higher the monthly cash flow the better the investment is. So the key question is “what property can I buy that will generate the most cash flow per month?”
In this article, we will be covering the simple true reasons why you really don’t need any special education to be able to answer that key question. For a simple strategy, you need a simple education. Now, I’m not saying that a college education is a bad choice or idea, I’m simply saying that there is no reason for someones to consider going to college to simply learn how to implement the buy and hold strategy.
Its basic math
The buy and hold strategy requires very simple math in order to be able to determine if a property makes sense to buy and will produce positive cash flow. Without diving deep into what formulas you can use, lets first understand what we are trying to calculate. We already know what we want the property to do ( produce positive cash flow).
Now, how do we determine if a property will produce positive cash flow? We need to calculate all of the expenses that the property will come with while holding it. Taxes, insurance, mortgage, maintenance, repairs, association fees, literally everything that will be an expense. Then we need to calculate how much the property will reasonably rent for. So, in summary, we are basically trying to calculate 2 key figures.
- Property expenses (negative)
- Predicted rental income (positive)
All the information you need is available through external sources
Literally, almost everything that you need to know about real estate investing is already available for free or fairly cheaper on the internet, books, seminars, etc. I say almost everything because one never knows if there are ways to invest in real estate that have not been done or talked about before. I can’t think of one at the moment but with today’s technology, I would not be surprised if a new way to invest in real estate is unlocked. That’s just how the world works.
Even when a new way of investing in real estate arises, eventually that information on how to work that new way of investing will be talked about and become available online at one point in the future. Books, being my favorite source of info are underrated nowadays but they contain golden information written by people who have seen it, done it and have the generosity to spread wisdom.
There is truly too much wisdom to be learned from books, so why not learn from other people’s experiences for free. Those books are written just for those who dedicate the time to read and value them and to help you succeed. I know not all of us are book readers, but again we live in such a tech world today that there are other methods of observing book content via audiobooks or videos.
The strategy has been around for ages and mastered by many people already, so just do the same
Because this strategy may be one of the first ones to be implemented there is already so much information out there for free that it’s no longer worth paying for. The world is flooded with this info and all you need to do is find it, learn it, and do it. Yes, if a new way of investing in real estate emerges that no one is yet talking about on the internet or no books have been written about it then absolutely, I would consider taking a course from someone who is doing that specific new strategy that there seems to be no information on if one wanted to even learn it.
Buy and hold is the best, safest and by far the easiest way to get started in real estate investing. It’s a great gateway strategy to other more advanced strategies, yet the returns are just as amazing, the risk is solid that some investors decide to simply stick with this classic, proven simple strategy. If you are thinking about investing any money in learning how to buy and hold, I would say go for it, it means that you are serious about it but just know that if you don’t necessarily have the money for it you absolutely do not need to do so.
The purpose of this article is to empower those who think they are not ready because they lack education and think that they need to buy a course first. What are you waiting for? All of the information is out there for free, just waiting for you. The satisfaction will be well worth it.
Hi, I’m just an inspired recent real estate beginner investor named Miguel Rivera from a modest town neighborhood called Pigeon Hill in Aurora, Illinois, the City of Lights! I have 3 years in so far investing in real estate and excited to continue to walk my chosen path to reach my ultimate financial goal of living off my rental income before I reach 35 years old! Driven by infinite growth potential and guided by my mentor, I managed to get started and make it work with just a modest salary, practically no education in the field, learning and applying some key habits. This website is a collection of all things that I have learned so far that I wish can help other recent real estate investors!