Investing in single-family rental properties can be a bit of a difficulty when it comes to 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. Despite that, don’t be agitated; there are multiple proven ways to make saving up for your next investment property faster and so much simpler, and I’m so glad to help you probe deeper into those options.
Quick Start to Saving for a Down Payment
One of the proven practices to get started on saving money for your down payment is to prioritize saving over spending. Despite that it sounds like common sense, it can be trying in practice.
Saving money can be wearisome, in particular, when it conveys putting off some of the things you really desire to buy. Having said that, if you hope to save up a significant amount of money, it’s very important to set up specific goals, prepare a plan, and then adhere to it. Think about automating your savings to make this process lighter. Have your paycheck split between accounts, or set up automatic transfers.
If you’ve decided to increase your savings, paying off any debts you may have is a helpful way to do this. Take 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 happy to see how much more money you have left over at the end of each month.
No more worrying about debt and interest payments wasting your hard-earned income. If you do use credit cards, only spend what you can pay back each month. Plenty of credit cards offer cashback rewards that will help you save a lot; this can be an effective advantage for responsible credit card users.
Assess the Cost of the Desired Property
To hit the ground running on this process, research the real estate market in your desired location to understand current property prices. Contemplate the type of property you want (for instance a single-family home, condominium, or multi-unit building) and what factors matter most to you (size, amenities, and location).
Once you’ve found a few potential properties, carefully consider their listing prices and any extra costs that come with buying a home, for instance, closing costs, taxes, and fees. Check potential ups and downs in the market and any unplanned expenses that might ensue during the buying process. Bear in mind, it’s better to be prepared than surprised.
Set Reasonable Savings Goals
Setting short-term goals is one of the most efficient ways to save up for a down payment. Instead of aiming at the large sum of money you need to purchase your next investment property, keeping your attention on smaller, achievable goals is better.
For example, you can start by planning to save a specific amount each week or each paycheck, even if it is just $25 or $50. By paying special attention to the short term, you can build your savings account and increase your sense of accomplishment.
Whatever you do to keep your savings on track will only benefit you and your investment portfolio later on.
Whether you have one investment property or many, Real Property Management Landmark has a solution that befits your budget in Farmingdale and nearby. Contact us online or call us at 516-522-2859 to chat about our flexible management contracts today!
Originally Published on March 27, 2020
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