This strategy involves purchasing a solid real estate asset in a desirable location and holding onto it for an extended period of time to build equity.

Recurring Cashflow
One of the key advantages of this strategy is that it can generate a recurring cash flow. Once you make the initial investment for the down payment and closing costs, you can expect to start earning rental income from the very next month. In the Greater Toronto Area market, rental rates have been steadily increasing over the last decade, making this a lucrative opportunity for investors. In all other forms of investments like stocks, bonds, mutual funds, the recurring cash flow component is not that prevalent and the reason why Real Estate investments top in the list of wealth creating assets. 

Equity Growth
Another benefit of the Buy & Hold approach is the potential for equity growth. Over time, the value of your property can appreciate, leading to increased equity. The Toronto real estate market has shown consistent growth over the last 45 years, making it a sound investment opportunity for those willing to hold onto their assets for an extended period.

Hedge against inflation 
Inflation is an unfortunate reality that we all have to deal with, but the Buy & Hold strategy offers a natural hedge against it. By investing in tangible assets like real estate, you can create a reliable source of income that will help protect against inflation over time.

Handoff Approach of Real Estate Investment
Once you've secured a solid property and a reliable tenant, the Buy & Hold approach requires minimal effort on your part. With only periodic upkeep and management needed, this strategy allows you to enjoy consistent passive income without having to constantly monitor the market.

Capitalize on Refinance
One of the biggest advantages of the Buy & Hold approach is the potential for refinancing. After your property has had time to appreciate in value, you can refinance it to take out the built-up equity and use that money to invest in additional assets. Due to the inherent build up of equity over time, you are able to realize that equity and create alternate assets without impacting the consistent cash flow from this asset. 

Tax Deduction Benefits
Finally, the Buy & Hold approach offers significant tax deduction benefits. The interest component of your mortgage payments can be written off against the rental revenue you receive, reducing your taxable income and saving you money in the long run.

In conclusion, the Buy & Hold approach is a sound investment strategy for those who want to build equity and generate consistent revenue over time. It's a subjective choice that depends on your investment objectives, but it's definitely worth considering if you're looking for a less capital-intensive, long-term investment plan.

?Wish you all the very best! Reach out to our dedicated team at Elixir for any queries you have in Real Estate and we will do our best to help.


Mudit Mehta 
Broker of Record
ELIXIR REAL ESTATE INC.
Off: 416-816-6001 | [email protected]