While development deals and fast-moving sales may be exciting, long-term ownership can bring lasting benefits for real estate investors. You could gain from having stable cash flow in a tax efficient manner and future appreciation on the properties you own. If you pick the right neighborhoods, the value could increase over time due to factors like improved market conditions and rent growth.
Keep these considerations in mind as you think about buying and holding real estate property.
Protection Against Market Fluctuations
The longer you hold, the better positioned you may be for market cycles and disruptions. You could find that you don’t need to sell in a down market or refinance when interest rates are high. Instead, you can weather the cycles, adapt to tenant changes, and gain the long-term appreciation and growth that real estate historically provides.
Diversification across asset classes can also help stabilize your portfolio. Holding a mix of multifamily, office, and retail, for example, might create a sense of balance. When one sector is down, others may be strong. Each asset type has its own set of challenges and opportunities. If you spend time learning how each segment operates, or work with others who do, you can better navigate them.
A Lasting Network
If you are able to acquire and maintain a growing number of properties over the long-term, others might take note of your strategy. In a recent interview on my podcast, Jason Muss, President of Muss Development LLC, a real estate development firm based in New York City that was founded in 1906, spoke of owning forever and building lasting relationships. Tenants might appreciate a landlord who keeps a property in good condition. Lenders typically value a borrower who is not overleveraged and shows the ability to commit long-term. This could lead to them being more likely to refinance and extend with you. Investors may prefer the stability and transparency that comes from a long-term view.
Slower Approach
Holding property long-term often means thinking like a steward rather than a speculator. It’s not just about accumulating buildings—it’s about managing debt wisely, building sustainable cash flow, and creating a structure that supports growth without overexposing yourself to risk. For many successful investors, that means taking a slower, steadier path. It could involve setting parameters and following those guidelines as you make investment decisions. You might turn down opportunities with high potential if there is additional risk or if it could lead to disruptions in your other properties.
Playing a Resilient Game
Even though you might move slower in the market, a long-term ownership strategy doesn’t necessarily mean standing still. You will likely have different issues surface with the properties you own and will need to work to find a solution with other stakeholders. For instance, an anchor tenant could leave or a building might face an unexpected repair. In these cases, you and your team will need to pivot and find a way to move forward. This could involve creative leasing strategies or repositioning a building.
Finding the Right Team
For newer investors, the idea of holding a property indefinitely might seem aspirational. After all, many early deals are financed through short-term capital or structured with the expectation of a sale. That said, by working with the right partners, you could lay the groundwork for a long-term strategy. You can start by building relationships with investors who share your vision. Even if you start small, having a clear plan to hold and grow could separate you from others and help you build a successful track record.
Long-term real estate ownership requires patience, discipline, and a vision that extends beyond the next transaction. While it may not deliver quick wins, it can offer rewards over time. Holding property could allow you to build a portfolio and work with partners for decades. With the right strategy, you might be able to position yourself as a trusted player in the market.
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