Here at APIA we are all about critical thinking and pushing our members to take a big picture approach to property. There are many ways to build
wealth with property and no right or wrong strategy in general. However, there is a best strategy out there to suit you. Jolene
and Jacek’s story highlights the difference between being a paper millionaire and an actual millionaire which compels us to really take stock and think
about whether our strategy is serving our purpose. So seeing that we are celebrating the two Js’ successes this week, lets take a closer
look at their preferred trading strategy vs the more traditional buy-and-hold we often speak of at APIA.
Related article: 5 minutes with Jolene Bagby and Jacek Baranowski
Buy-and-hold
Buy-and-hold means simply as it says – that an investor buys a property and holds on to it for the long term, if not forever. It is a time honoured
strategy that creates wealth both through capital growth and long term cash flow.
A buy-and-hold portfolio typically suits a high income and time poor investor. It improves in value over time and is less susceptible to short term
market fluctuations. Because time is an essential component, a buy-and-hold strategy puts less pressure on the investor to turn an instant profit.
Rather wealth is generated through a steady stream of passive income (i.e. rent). You are not trying to turn an instant profit so there
is no compromise on your cash flow to invest in major renovation or improvement works. This more vanilla and conservative approach to property
investing also means that you have access to competitive financing rates especially as your portfolio grows. Also holding on...
