Saving For An Investment Property
For many people, real estate can provide financial freedom for a lifetime. Owning property is a wise investment, but not everyone has the money needed to make this a reality. Student debt, a mortgage of your own and a vehicle loan is enough to prevent you from getting started. If you’re looking to save up some money quickly to take care of the 20 percent down payment, let’s take a look at some methods you can use.
Think About How Much You Can Save Monthly
You’ll need to assess where your money is currently going. You can use a budgeting app to see where there are areas that can be improved upon. You may be able to reduce your monthly spending by eating out less, choosing a different cell plan, or budgeting on groceries. Fifty percent of your take-home pay should go towards your necessities. Another thirty percent goes towards non-necessities but things that you want. The last twenty percent should be for savings. A lot of people choose not to keep a paper trail of what they’re spending. It’s ideal to hold yourself accountable with your spending.
Figure Out Your Budget
You should determine what type of property you can actually invest in. You will need to run some numbers that reflect the property you’re buying, attorney fees, closing costs and your repair budget for once you’ve closed. You can tweak these numbers to make your investment dream a reality. You might have to buy something a little smaller than what you originally set out for, or you can wait a little longer to get something closer to what you want.
It’s important to keep in mind that you’ll have to come up with twenty percent of the property price as a down payment. This is because investment properties don’t carry mortgage insurance typically. The more you put down, the lower your payments are going to be. You can also look into using a home equity line of credit on your own home to use towards a down payment. You’ll need to be strategic with your planning, but there’s plenty of ways to quickly save for an investment property.