One of the difficulties of investing in Stonington’s single-family rental properties can be saving up for your down payment. Much of the time, you will require at least 20% of the purchase price saved up, plus a little extra for closing costs, insurance, and repairs. While it may seem like a difficult job to raise so much cash, there are many ways to make saving up for your next investment property faster and easier.
Probably the ideal approach to start saving money for your next down payment is to make saving money at the top of your priority. It seems like basic common sense, and it is. But to practice prioritizing saving over spending can be difficult. Delaying unnecessary purchases and sticking to a budget can be hard, yet, the best way to save significant amounts of money is to set specific goals, make a plan, and then stick to it. One method of making this procedure easier is to automate your savings.
Many employers will let you deposit part of your paycheck into multiple accounts. If yours does, consider opening a higher-interest savings account and then having a percentage of each paycheck deposited into it. By designating automatic transfers into your savings account, you are less likely to use the money for other things. Even 1% of the additional interest can add up over the long term.
Another extraordinary technique to increase your savings is to pay off your existing debt. One way to accomplish this is that every month you are making debt payments, you are not using that money to save for your next property. When your debts are paid off, you might be shocked by how much more of your monthly income is left available if it is not being consumed by paying off debts and interest. That 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 much more. Simply be certain that you only spend what you can pay off each month.
If any of these other forms don’t work for you, try reducing your monthly expenses. One of the best ways to do this is to eat out less often. Cooking your meals at home is easy, and you can choose healthy food, and the best part of that is you can save you hundreds of dollars each month. You could also shop around for better rates on the internet and phone service, cable service, car insurance, and more. You can find that 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, regardless of whether it is just a couple of dollars, should go directly into your savings account. The same applies to any unplanned or infrequent sums of money, such as bonuses, gifts, tax refunds, and so on. Each bit will help you reach your savings goals simply that a lot quicker.
At long last, probably the best thing you can do to save up for a down payment is to set short-term goals. While 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. For instance, you can start by aiming to save a certain amount each week or each paycheck, even if it is $25 or $50. By focusing on the short term, you can improve not only your savings account but also your sense of accomplishment. In the end, something that you can do to keep your investment on track is only going to benefit you and your investment portfolio.
When it comes to savings… regardless of whether you have one investment property or several, Real Property Management Hartford Metro/Greater New London has an answer to suit your financial limit. Contact us online or call us at 860-436-9955 to discuss our flexible management contracts today!
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