Buy and hold is the foundational long-term real estate investment strategy. Rather than transacting frequently, investors accumulate properties, collect rental income, and benefit from appreciation, mortgage paydown, and depreciation over years or decades.
Returns come from four sources:
- Cash flow: Monthly income after all expenses
- Appreciation: Property value growth over time
- Equity buildup: Tenants paying down your mortgage
- Tax benefits: Depreciation, interest deductions, 1031 exchanges
The best buy-and-hold markets combine reasonable price-to-rent ratios (supporting cash flow) with population and job growth (supporting appreciation).
Related Terms
BRRRR
Buy, Rehab, Rent, Refinance, Repeat — a strategy to recycle capital into multiple properties.
Cash Flow
Monthly or annual income remaining after all expenses and mortgage payments are paid.
1031 Exchange
IRS provision allowing investors to defer capital gains tax by reinvesting sale proceeds into a like-kind property.
House Hacking
Buying a 2–4 unit property, living in one unit, and renting the others to offset your housing cost.