7 Tips For Saving Up For A Down Payment

Real estate investment is something many people say they want to get into, but few actually end up doing. The number one reason people don’t end up investing in real estate is usually some variant of: “I just don’t have enough money right now!” As such, I’d like to give you a few tips on how you can save up for that down payment on your first investment property. It’s a lot easier than you think!

1: Figure Out Your Down Payment

Before you start your savings plan, you need to be aware of how much you’ll need to put aside in order to make a reasonably sufficient down payment. Most down payments should be in the 20% range, but some people can qualify for FHA loans that are as low as 3.5%! Regardless of what percentage you’re going to get, you need to figure out that first big payment.

2. Put Together Your Budget

The second and most important step for saving money is creating that budget! When you have a budget, you are telling yourself what you are and are not going to spend your money on. With those parameters in mind and by monitoring where your money goes, you will empower yourself to save more and stay on target for your financial goals.

3. Cut Expenses

When you build your first budget, it may be shocking to see how much money you’ve spent on frivolous, unnecessary things. Think of this as a wake-up call. Sure, it may be difficult to stomach some of the mistakes you’ve made in the past, but now you can right those wrongs and move forward. Prioritize your money and where it’s going!

4. Sell Things You Don’t Need Anymore

Your income and expenses determine how much money you can save over a period of time. That being said, you can certainly do things to jumpstart the savings. The easiest one? Sell items you don’t need or want anymore! Things like electronics, cars, etc. are fairly easy to determine the value of, but more unique items like jewelry, watches, and collectibles can be worth far more than you assume. Take those items to an appraiser and find out how much money you’re sitting on!

5. Don’t Spend Unexpected Money

If you ever receive money you weren’t expecting, don’t spend it, SAVE IT! This could be anything from a tax refund, work bonus, gifted money, stock dividends or even lottery/gambling winnings.

6. Consider Working A Little Extra

If you are able to take on a part-time job or, as Millennials like to say: a “side hustle,” do it! Why not? Even a “minuscule” amount of money, like $50-$100 per week, can actually make a huge difference over time!

7. Patience is Your Friend

In the 21st Century, we’ve come to expect getting what we want, how we want, when we want. Unfortunately, life rarely turns out to work that way. So, you need to be patient and trust in yourself that you’re working for a larger goal. Rome wasn’t built in a day and neither will your real estate empire. So, cut yourself a little slack and give yourself time. I promise it will be worth it.