Investing in single-family rental properties can be a rather tough challenge particularly 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. But at the same time, you don’t have to be anxious; there are different effective ways to make saving up for your next investment property faster and more manageable, and I’m keen on helping you check out those options closely.
Quick Start to Saving for a Down Payment
One of the effective methods to start saving money for your down payment is to prioritize saving over spending. Granting that it sounds like common sense, it can certainly be difficult in practice.
Saving money can be a pain, exactly when it entails putting off some of the things you are really longing to buy. Although, if you have made up your mind to save up a significant amount of money, it’s necessary to start setting specific goals, think out a plan, and then follow it conscientiously. Think about automating your savings to make this process so much simpler. Have your paycheck split between accounts, or set up automatic transfers.
If you aspire to increase your savings, paying off any debts you may have is an appropriate way to start. Assess 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 great number of credit cards offer cashback rewards that will help you save more and more; this can be a great advantage for responsible credit card users.
Assess the Cost of the Desired Property
To begin, research the real estate market in your desired location to understand current property prices. Look closely at the type of property you want (that is to say, a single-family home, condominium, or multi-unit building) and what characteristics matter most to you (size, amenities, and location).
Once you’ve found a number of potential properties, take careful note of their listing prices and any extra costs that come with buying a home, involving closing costs, taxes, and fees. Bear in mind to evaluate potential ups and downs in the market and any unplanned expenses that might happen during the buying process. Take note, it’s better to be ready than surprised.
Set Reasonable Savings Goals
Formulating short-term goals is one of the most effective means to save up for a down payment. Instead of being concerned with the large sum of money you need to purchase your next investment property, focusing on making smaller, attainable goals is better and more practical.
As an example, you can easily start by planning to save a specific amount each week or each paycheck, even if it is just $25 or $50. By giving your full attention to the short term, you can build your savings account and easily enhance 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 bunch of them, Real Property Management of the Triad has a solution exactly tailored to your budget in Winston-Salem and nearby. Contact us online or call us at 336-355-6666 to know more about our flexible management services today!
We are pledged to the letter and spirit of U.S. policy for the achievement of equal housing opportunity throughout the Nation. See Equal Housing Opportunity Statement for more information.
