Investing in single-family rental properties can be a bit of a trying experience 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. Be that as it may, don’t worry; there are plenty of proven ways to make saving up for your next investment property faster and far simpler, and I’m quite happy to help you study those options more closely.
Quick Start to Saving for a Down Payment
One of the efficient ways to begin saving money for your down payment is to prioritize saving over spending. Even though it sounds like common sense, it can be quite tough in practice.
Saving money can be tedious, certainly when it connotes putting off some of the things you really love to buy. With that said, if you want to save up a significant amount of money, it’s vital to develop specific goals, plot a plan, and then execute it. Seriously consider automating your savings to make this process so much easier. Have your paycheck split between accounts, or set up automatic transfers.
If you plan to increase your savings, paying off any debts you may have is an appropriate way to properly facilitate this process. Think of 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 wonderfully amazed at how much more money you have left over at the end of each month.
No more worrying about debt and interest payments eating up your hard-earned income. If you do use credit cards, only spend what you can pay back each month. Several credit cards offer cashback rewards that will help you save even more; this can be an awesome advantage for responsible credit card users.
Assess the Cost of the Desired Property
To kick this off, research the real estate market in your preferred location to understand current property prices. Study the type of property you want (for example a single-family home, condominium, or multi-unit building) and what sectors matter most to you (size, amenities, and location).
Once you’ve found a lot of potential properties, keep note of their listing prices and any extra costs that come with buying a home such as closing costs, taxes, and fees. Always weigh the potential ups and downs in the market and any unanticipated expenses that might unfold during the buying process. Keep in mind, it’s better to be well prepared than surprised.
Set Reasonable Savings Goals
Properly setting short-term goals is one of the most exemplary practices to save up for a down payment. Instead of obsessing much about the large sum of money you need to purchase your next investment property, keeping your efforts focused on smaller, attainable goals is better.
For instance, you can begin simply by planning to save a specific amount each week or each paycheck, even if it is just $25 or $50. By taking note of the short term, you can build your savings account and greatly boost your sense of accomplishment.
Whatever you do to keep your savings on track will only benefit you and your investment portfolio in due time.
Whether you have one investment property or plenty of them, Real Property Management West San Fernando Valley has a solution that perfectly suits your budget in Chatsworth and nearby. Contact us online or call us at 818-727-0100 to discuss our flexible management contracts today!
Originally Published on March 27, 2020
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