One of the constraints of investing in Lewisville’s single-family rental properties could be saving up for your down payment. Almost all of the time, you would need to have at least 20% of the purchase price saved up, plus a little extra for closing costs, insurance, and repairs. Even if saving up this much cash may be tough to do, there are alternative ways to make saving up for your next investment property faster and easier.
A good way to start saving money for your next down payment is to make saving money a major priority. It might resemble basic common sense because it is. But in practice prioritizing saving overspending can be difficult. Delaying unnecessary purchases while sticking to a budget can be troublesome, but one sure way to save significant amounts of money is to set specific goals, make a plan, and then stick to it. It would be great if you automate your savings.
Many employers will let you deposit part of your paycheck into multiple accounts. Consider opening a higher-interest savings account and then having a percentage of each paycheck deposited into it. Thru designating automatic transfers into your savings account, you are less likely to use the money for the less important stuff. Even 1% of the additional interest will add up over the long term.
A certain way to increase your savings would be to pay off your existing debt. Always remember that every month you are making debt payments, you are not using that money to save for your next property. And when your debts are paid off, you might be astounded at how much more of your monthly income is left over when it is not being consumed by paying off debts and interest. This does not imply that cannot use your credit cards. Many cards now offer cashback rewards for using them each month, which could help you save yet more. Don’t forget to only spend what you can pay off each month.
You could also try reducing your monthly expenses. One of the most basic techniques is to eat out less often. Cooking your meals on your own can save you hundreds of dollars each month. And also shop around for better rates on the internet and phone service, cable service, car insurance, and more. Try to switch to a lower-cost service or even lower the cost of your current services by calling your providers. The amount you save, no matter how tiny, should go directly into your savings account. The same holds for any unplanned or infrequent sums of money, such as bonuses, gifts, tax refunds, and so on. All these will help you reach your savings goals more rapidly.
Let me end by giving you another thing you can do to save up for a down payment. The secret is to set short-term goals. Even though 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 give an instance, you may be able to commence by planning to save a certain amount each week or each paycheck, even if it is $25 or $50. While focusing on the short term, you can improve not only your savings account but also your sense of accomplishment. Everything you do to stick to the savings plan will benefit you and your investment portfolio too.
If it’s about savings… regardless if you own one investment property or several, Real Property Management Lonestar has an effortless solution that also considers your budget. Contact us online or call our Austin office at 512-520-9060 or our Dallas office at 972-949-2000 for more information.
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