The most common form of real estate investing is long term real estate investing. There’s one simple reason why long term real estate investments have been the focus of many investment strategies: they are very successful. If there’s only one method of making money in real estate we could recommend, it has to be long term real estate investing.
What are Long Term Real Estate Investments?
Before we delve into why long term investments are the best real estate investments, let’s properly define them. Unlike short term real estate investments, long term real estate investments are predominantly traditional investments. Long term investment properties are leased for a longer period of time than short term real estate investments. The tenants of long term real estate investments differ than their short-term counterparts, too. Tenants of long term rentals aim to be inhabitants of the area, while tourists are the most common tenants of short term properties.
Investing in real estate, whether it be long-term or short-term, is one of the best ways to make money. However, long term real estate investments are usually the more profitable of the two, which is why we recommend them more. Nonetheless, you can’t go wrong with short term real estate investments. To learn more about where to invest in these rentals, read this: “Buying a Short-term Rental Property? Invest in the Most Airbnb friendly cities”!
Why We Recommend Long Term Real Estate Investments
It’s been established by now: long term real estate investments are the most profitable real estate investments. What makes long term rentals a must for your real estate investment portfolio? Let’s find out!
Consistent Positive Cash Flow
Rental income is the chief source of profit when investing in real estate. However, it isn’t the main measure of profitability, cash flow is. Cash flow is merely the difference between rental income and rental expenses. It’s obvious that real estate investors should strive for positive cash flow rather than negative cash flow. With long term real estate investments, this goal becomes a solidified reality.
Long term rentals are the best of the best for long-term positive cash flow. These properties are commonly sought after by tenants, giving real estate investors an advantage when it comes to occupancy rates. Virtually no other investment strategies have such high demand. If you want to start searching for long term rental properties in your city or area, click here!
Cash flow suffices both in the short term and long term for real estate investors. It isn’t, however, the only long-term benefit when investing in long term rentals. Appreciation, or the increase in the value of a property over time, is a benefit which can lead to high returns when selling the property. The most successful real estate investors do their best to maximize both cash flow and appreciation. Just as you’d expect, they do so by investing in long term real estate investments.
Buy and Hold Investment Strategy
As we’ve just covered, long term real estate investments can be profitable in terms of cash flow and appreciation. For this reason, long term rentals are synonymous with buy and hold real estate, arguably one of the best investment strategies out there. The buy and hold strategy includes purchasing long term investments, renting them out, and selling them after a long period of time. This strategy gives real estate investors the biggest bang for their buck in reliable and smart methods. Of course, the buy and hold strategy isn’t the only one applicable to long term rentals. To learn more about the best strategies for making money in real estate, read this: “Top Six Real Estate Investment Strategies”!
When the question “how to make money in real estate” is asked, most real estate investors focus on cash flow. There is another way of making money: saving money when investing in long term real estate investments. Of course, we are referring to the tax benefits of owning long term properties.
Tax benefits can come in many helpful forms to real estate investors. Tax deductions, for instance, save investors a lot of money. The vast majority of expenses, such as rental expenses and mortgage insurance, are tax deductible. Deductions aren’t the only tax benefit of long term properties. Depreciation and the 1031 Exchange also make investors anticipate filing their taxes.
Low Risk Investments
Overall, perhaps the biggest reason we recommend long term real estate investments is that they are relatively safe investments. Making money in real estate is never a cakewalk, but it isn’t overly arduous when planned for correctly. This is especially true with long term rentals. A large demand, a continuous supply, and multiple sources of profit are what make long term rentals a surefire way to make money. While nothing is truly a no-risk investment, it’s safe to classify long term rentals as low risk investments. Want to start looking for low risk investments? Start your free 14-day trial with Mashvisor by clicking here!
Where You Can Find Long Term Real Estate Investments
So, you now know that we recommend every real estate investor invests in long term real estate investments. But where can you start looking for them? We strongly recommend that you search for them right here, using Mashvisor!
Mashvisor’s investment property calculator is all you need to start looking for long term properties. All you have to do is search for an area and adjust the heatmap to features of a property you’d like. The calculator will then find properties that perfectly match your desires. For more details about the searching process, read this: “How to Find the Best Investment Property Using a Heatmap”!
Mashvisor’s search does not limit real estate investors to long term traditional properties. If you’re interested in Airbnb properties, the calculator still does the same job. You can even search for properties based on your budget, number of rooms, type, and much more.
Long term properties are some of the best real estate has to offer. We strongly recommend them, as they are profitable and stable in many ways. To learn more about how to invest money in long term real estate investments, click here!