One of the hardships of investing in Farmingdale single-family rental properties is often saving up for your down payment. In some situations, they would request at least 20% of the purchase price saved up, plus a little extra for closing costs, insurance, and repairs. Although accumulating so much cash may seem like a problematic task, don’t worry, there are so many ways to make saving up for your next investment property faster and easier.
The perfect way to start saving money for your next down payment is to make saving money a priority. It appears like basic common sense, and it is. But the practice of prioritizing saving over spending can be difficult. Delaying unnecessary purchases and sticking to a budget can be challenging. Still, the only method to save significant amounts of money is to set specific goals, make a plan, and then stick to it. One option to make this process effective is to automate your savings.
Many employers will let you deposit part of your paycheck into multiple accounts. If yours does, consider opening a higher-interest savings account and then having a percentage of each paycheck deposited into it. By designating automatic transfers into your savings account, you are less likely to use the money for some other things. Even 1% of the additional interest can add up over the long term.
Another excellent way to increase your savings is to pay off your existing debt. One way to look at it is that every month you are making debt payments, you are not using that money to save for your next property. If your debts are paid off, you may be surprised by how much of your monthly income is left over when it is not being consumed by paying off debts and interest. That isn’t supposed to mean that you cannot use your credit cards. Many cards now offer cashback rewards for using them each month, and with that, it can help you save a lot more. Just always bear in mind that you only spend what you can pay off each month.
In some cases, if these other strategies are not working for you, try reducing your monthly expenses. Probably the best way to do so is to eat out less often. Cooking your meals at home will take time, but the advantage is that it can save you hundreds of dollars each month. You could also shop around for better rates on the internet and phone service, cable service, car insurance, and more. You may discover that you can switch to a lower-cost service or even lower the cost of your current services by calling your providers. The amount you save, no matter how much it is, should go directly into your savings account. The same is true for any unplanned or infrequent sums of money, such as bonuses, gifts, tax refunds, and so on. Even a single dollar will help you reach your savings goals just that much faster.
In the end, one of the smartest things you can do to save up for a down payment is to set short-term goals. While you may need $20k or $30k to buy your next investment property, using that number as your goal is not going to be as effective as creating smaller, achievable goals. For example, you might proceed by deciding to save a certain amount each week or each paycheck, even if it is $25 or $50. By focusing on the short term, you can develop not only your savings account but also your sense of accomplishment. Anything you can do to keep your investments on track will eventually benefit you and your investment portfolio.
If it comes to savings… regardless if you have one investment property or several, Real Property Management Landmark has a strategy to match your plan. Contact us online or call us at 516-522-2859 to chat about our flexible management contracts today!
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