I have a strategy for what I’m doing with my multifamily investment properties. I’m never selling. You want to know why? Because, I’m in this investing game for the long haul. Looking ten, twenty, or fifty years down the line changes how you (and I) make decisions today.
The work involved
The entire process of finding the best investment properties, negotiating deals, and closing them takes a lot of time. And, the overview I just mentioned— that’s only the beginning. Once you acquire the buildings, you will have to handle tenants. You will also need to figure out a marketing plan and get people to want to move into your properties. You could do all of the work to acquire and renovate a property and then turn around and sell it, but to me, that doesn’t seem worth the hassles. Personally, I want to make the most out of all of my work and get the best returns. I want to know what that I am really doing something that is worth my time. I want to create something that lasts.
Tax
On the surface, the quick return from flipping and wholesaling looks really good...until you do the complete math. No one is going to talk about taxes on reality TV. The talk centers around total profits; which is entirely different than net profits. If you hold a property for long-term gains and passive income, you will win in the long run. I don’t want to give up such a huge part of my gains when I’ve worked so hard to earn them. That’s just my perspective.
Speculate
Personally, I don’t want to gamble on buying a property with the sole intention to sell it immediately. After putting hours, energy, and tons of money on renovations and improvements, it’s not about the money in your pocket from a one time sell, but the income gained over time. When I tenant occupies one of my units, I know that I will get a return right away. It’s not a sure thing that you will be able to flip for a certain amount. The last crash showed us that. Buy for cash flow.
Net Worth
You could own the best property in the entire United States, and still, the value will fluctuate. Don’t get caught up in concerning yourself with the changes in the short term. Look for trends and continue to pay attention to the details of your process. The assets, if good properties, will keep going up in value over time. Realistically, what are you going to do with fast money anyway? Long term wealth building results in real, long term net worth. Holding properties allows the investor to experience the benefits of less commissions, taxes, and fees.
Summary
The point is, I’m not selling anytime soon, and I would advise that you also follow a similar strategy. This might not be for you, but I hope I have been able to explain why I’m going long and never planning on selling my investment properties. Do the math for you and see what you find out. You might be further ahead if you hold too!