One of the hardest parts of investing in Williamsburg’s single-family rental properties can be saving up for your down payment. You will be required to pay at least 20% of the purchase price, plus a little extra for closing costs, insurance, and repairs. Sometimes mustering up this much cash may be demanding for some, there are a couple of ways to make saving up for your next investment property faster and easier.
Another way to start saving money for your next down payment would be to make saving money a hobby. It should appear like basic common sense because it is. But in practice prioritizing saving over spending can be difficult. Delaying unnecessary purchases and loyally sticking to a budget can present itself as a challenge, but the only sure way to save significant amounts of money is to set specific goals, make a plan, and then stick to it. It would also save you a lot of hassle if you automate your savings.
Many employers will let you deposit part of your paycheck into multiple accounts. If yours does this, you can try opening a higher-interest savings account and then have a percentage of each paycheck deposited into it. And by designating automatic transfers into your savings account, you are less likely to use the money for other priorities. Even 1% of the additional interest can add up over the long term.
One dependable way to increase your savings would be to pay off your existing debt. Every month you are making debt payments, you are not using that money to save for your next property. When you are all done and your debts are paid off, you might be dumbfounded at how much of your monthly income is left over when it is not being consumed by paying off debts and interest. Nevertheless, this does not mean that you cannot use your credit cards. Many cards now offer cashback rewards for using them each month, which could help you save even more money. Always be aware that you should only spend what you can pay off each month.
Another approach to the problem would be to try reducing your monthly expenses. One of the simplest ways is to eat out less often. Cooking your meals yourself can save you hundreds of dollars each month. You can also try to shop around for better rates on the internet and phone service, cable service, car insurance, and more. 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 should go directly into your savings account. The same also applies to any unplanned or infrequent sums of money, such as bonuses, gifts, tax refunds, and so on. Every bit will help you reach your savings goals a lot quicker.
And lastly, one of the most ideal strategies you can do to save up for a down payment would be to set short-term goals. Even if 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. To illustrate, you could start by forcing yourself to save a certain amount each week or each paycheck, even if it is $25 or $50. By focusing on the short term, you unconsciously can build not only your savings account but also your sense of accomplishment. Whatever you can do to keep your savings on the right track is surely going to benefit you and your investment portfolio afterward.
If it’s about savings… be it one investment property or several, Real Property Management VA Peninsula has a direct solution to every problem you might encounter including your budget. Contact us electronically or give us a call at 757-251-9188 to have an in-depth explanation about our flexible management contracts today!
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