5 Tips on HOW TO SAVE a deposit to INVEST IN REAL ESTATE

Regardless of the market today, yesterday, last year and next year – investing in real estate always makes a lot of sense. There are many ways to profit from real estate – long term with renting and capital growth; and short term with flipping being the most popular among them. However, to be a property investor requires money. But exactly how should you go about starting to save money for your first property?

LIFESTYLE OPTIONS

One of the easiest ways to start saving enough to invest in real estate is to change your lifestyle. Chances are that some of your lifestyle habits are draining your budget and making it difficult to set aside some money at the end of the month. For example, if you are eating a lot of take away (lunch and dinner) and dining out often, maybe it’s time to start preparing your meals at home.

You will be surprised how much money you can set aside each week by not frequenting these restaurants etc. If you’re a smoker, this is a great time to give up this unhealthy habit. It will help you save big on a monthly basis. Consider your monthly subscriptions – do you need all the latest music apps and TV options?

LEARN TO BUDGET

Let me be clear – saving money does require time and effort. If you really want to do it, you need to take some time and create or download a budget sheet so you calculate exactly the difference between your income and expenses. By completing this exercise thoroughly and honestly you will be able to see exactly how much you can save and identify new opportunities to set money aside.

Technology can help you here. There are a multitude of apps that can make the entire process easy. Apps where you record every cent you spend at the time of spending and apps that produce spreadsheets when you enter in the data. They will keep you from overspending and give you an idea where most of your money is going. This can be very enlightening! Setting a budget and managing your personal finances is also a great way to practice for staying in control of your money once you officially become a real estate investor. 

OTHER STREAMS OF INCOME

It can take some people a long time to save enough money to become real estate investors. One option is to find alternative ways to generate some cash. Luckily, getting a side gig has never been easier. As long as you have a PC ,an internet connection and a few hours a week you can do work online and increase your income. For example, if you are a writer or have skills in web design, you can join websites such as Upwork and start taking on freelance writing jobs.

Start searching online for jobs where you be an affiliate to sell products – you will have to do some training but it may be worth it – particularly if you know your way around a laptop! If you have web cam on your computer (most do), you can also consider tutoring or teaching a foreign language online. There are many ways if you are serious about getting ahead faster.

ELIMINATE  DEBT

If you’re trying to save enough to start investing in real estate, you must reduce your debt. When you do your budget, it will be obvious how much money you are spending on servicing your debt and you’ll see why eliminating it is essential for future financial success.

The first step is to stop creating more debt. This may seem obvious but many people don’t start here.

This strategy alone won’t get you out of debt, but at least your debt won’t get worse. If you continue adding debt, it will be much more difficult to make progress on reducing your debt, if you make any progress at all. Reduce your temptation to create more debt by cutting up your credit cards or even freezing your credit.

Another strategy is picking one debt (a store card or credit card) and give it all you’ve got. Some people increase all their minimum payments by just a little bit, so that the debt drops by a small amount each month. However, you can make more noticeable progress by making a big payment to just one of your accounts each month until that debt is completely repaid. In the meantime, make the minimum on all your other accounts. Then do the same for another debt, and then another, until they’re all paid off. This strategy has a ‘feel good’ feeling about it I think.

Another strategy is picking one debt (a store card or credit card) and give it all you’ve got. Some people increase all their minimum payments by just a little bit, so that the debt drops by a small amount each month. However, you can make more noticeable progress by making a big payment to just one of your accounts each month until that debt is completely repaid. In the meantime, make the minimum on all your other accounts. Then do the same for another debt, and then another, until they’re all paid off. This strategy has a ‘feel good’ feeling about it I think.

CONCLUSION

Once there’s no more debt to think about, it’s time to focus on getting that deposit together. Setting a monetary target to buy your first property is a great incentive to make these changes.  You will find you will get into the world of real estate investing even earlier than you ever believed.