Investing in single-family rental properties can be a real challenge especially 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. With that said, don’t be anxious; there are plenty of effective ways to make saving up for your next investment property faster and better, and I’m quite happy to help you inspect those options.
Quick Start to Saving for a Down Payment
One of the best means to get moving on saving money for your down payment is to prioritize saving over spending. Even though it sounds like common sense, it can certainly be challenging in practice.
Saving money can be rather difficult particularly when it points to putting off some of the things you really like to buy. So really, if you choose to save up a significant amount of money, it’s necessary to set specific goals, think out a plan, and then follow through with it. Try automating your savings to make this process trouble-free. Have your paycheck split between accounts, or set up automatic transfers.
If you desire to increase your savings, paying off any debts you may have is the best means to kick off this process. See 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 astounded at how much more money you have left over at the end of each month.
No more worrying about debt and interest payments exhausting your hard-earned income. If you do use credit cards, only spend what you can pay back each month. A whole lot of credit cards offer cashback rewards that will help you save more; this can be a great advantage for responsible credit card users.
Assess the Cost of the Desired Property
To start out, research the real estate market in your chosen location to understand current property prices. Determine the type of property you want (such as a single-family home, condominium, or multi-unit building) and what characteristics matter most to you (size, amenities, and location).
Once you’ve found lots of potential properties, take careful note of their listing prices and any extra costs that come with buying a home, particularly closing costs, taxes, and fees. Carefully consider potential ups and downs in the market and any unanticipated expenses that might transpire during the buying process. Bear in mind, it’s better to be properly prepared than surprised.
Set Reasonable Savings Goals
Creating short-term goals is one of the best solutions to save up for a down payment. Instead of obsessively focusing on the large sum of money you need to purchase your next investment property, establishing smaller, more attainable goals is better.
For instance, you can initiate this process by planning to save a specific amount each week or each paycheck, even if it is just $25 or $50. By keeping your eyes on the short term, you can build your savings account and heighten your sense of accomplishment.
Whatever you do to keep your savings on track will only benefit you and your investment portfolio as time goes by.
Whether you have one investment property or a whole lot of it, Real Property Management VA Peninsula has a direct solution to every problem you might encounter including your budget in Williamsburg and nearby. Contact us electronically or give us a call at 757-251-9188 to have an in-depth explanation about our flexible management contracts today!
Originally Published on March 27, 2020
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