What is the Ideal Hold Period for A Multifamily Deal?

Updated: Jan 9, 2021

A hold period is the amount of time you hold on to a property after purchasing it, and is usually measured in years. The question regarding the ideal hold period pops up from time to time, especially with those who are new to multifamily investments. The standard answer is, “It depends.”

Here’s why: there are many factors that go into determining how long to hold on to a property. Holding period depends on the investment strategy that was determined at the beginning of the deal. The investment hold depends on two main factors: the investment type and the investor’s preference.

Hold Period Strategy Depends on the Investment Type

Fix and Flip

There are basically two different types of strategy: “buy-and-hold,” and “fix and flip.” A fix and flip investor holds the property for a few months, and sells it right after the improvements to the property are done.

The hold period will be different depending on whether the investment is a buy and hold or fix and flip. In that scenario, the investors buy an unstabilized property with the intention of fixing the problems quickly and selling it. The asset is unstabilized due to a high vacancy rate or disrepair. The intention is to stabilize it and sell it, usually in a time period of up to 18 months.

The pro to that approach is that it is a short holding period. The cons are that financing can be a challenge, there would be higher inter