Investing in single-family rental properties can be a bit of a tough challenge as regards saving up for the down payment. You’ll need at least 20% of the purchase price saved up, plus a little extra for closing costs, insurance, and repairs. But hold up, don’t be apprehensive; there are numerous proven ways to make saving up for your next investment property faster and much easier, and I’m eager to help you examine those options.
Quick Start to Saving for a Down Payment
One of the best methods to get started on saving money for your down payment is to prioritize saving over spending. Even though it sounds like common sense, it can be quite difficult in practice.
Saving money can be rather tough, absolutely when it means putting off some of the things you really intend to buy. On the other hand, if you would like to save up a significant amount of money, it’s so important to make specific goals, set up a plan, and then just do it. Examine automating your savings to make this process better. Have your paycheck split between accounts, or set up automatic transfers.
If you make up your mind to increase your savings, paying off any debts you may have is a beneficial way to start. Evaluate it this way: Every month, you’re putting money towards paying off debts instead of saving for your future property. Once your debts are cleared, you’ll be quite amazed at how much more money you have left over at the end of each month.
No more worrying about debt and interest payments eating up your hard-earned income. If you do use credit cards, only spend what you can pay back each month. Multiple credit cards offer cashback rewards that will help you save even more; this can be a perfect advantage for responsible credit card users.
Assess the Cost of the Desired Property
To get cracking on this process, research the real estate market in your preferred location to understand current property prices. Think about the type of property you want (as an illustration a single-family home, condominium, or multi-unit building) and what aspects matter most to you (size, amenities, and location).
Once you’ve found particular potential properties, note their listing prices and any extra costs that come with buying a home, for example, closing costs, taxes, and fees. Always take time to seriously consider potential ups and downs in the market and any unanticipated expenses that might pop up during the buying process. Always take note, it’s better to be ready than surprised.
Set Reasonable Savings Goals
Having short-term goals is one of the best practices to save up for a down payment. Instead of obsessing on the large sum of money you need to purchase your next investment property, setting up smaller, really attainable goals is better.
For a case in point, you can get started simply by planning to save a specific amount each week or each paycheck, even if it is just $25 or $50. By giving particular attention to the short term, you can build your savings account and improve your sense of accomplishment.
Whatever you do to keep your savings on track will only benefit you and your investment portfolio with time.
Whether you have one investment property or many, Real Property Management of the Rockies has a solution that is perfectly in tune with your budget in Loveland and nearby. Contact us online or call us at 970-658-0410 to discuss our flexible management contracts today!
Originally Published on March 27, 2020
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