Education and news for smart DIY landlords!
You’ve learned so much from this blog now! The only problem is, where are you supposed to get money to put your real estate lessons to the test? If you’re not approved for a loan, saving money is the best idea.
But with a lot to pay such as mortgages, life insurance, and monthly Netflix subscriptions, the idea of saving for a house seems like an impossible task to do. No, I don’t believe so. If I and many others can do it then why can’t you? Let’s get down to these financial hacks!
Before anything else, determine what kind of house you want to buy and how much it will be. You must evaluate its future market price as well. The prediction must cover the cost whether it will be bought in a rising or falling market. And don’t forget the cost of hiring a real estate agent if you intend to avail one.
When you have a clear idea of how much a house would cost totally, you should set a fixed amount of how much you’ll save. For example, if buying your dream home would cost you $280,000, aim to save $300,000. The extra $20,000 will be for contingencies like sudden market price increase or emergencies.
Another way to save money is to monitor how much you’re spending right after receiving your payroll. Apps like Mint will help you track your personal expenditures such as clubbing and eating out at restaurants. Once you register the things you spend on, you’ll be able to see how much money you’re wasting on things you don’t really need.
Set a monthly budget for you to stick to. Total the costs of monthly necessities like rent, mortgage, electricity, water, and groceries. Then add a little for emergencies and recreational activities that aren’t costly. The sum should be your budget and it should minus your monthly earnings. Then, let the difference be your savings.
We all withdraw from our ATMs to get money. But there are some of us who do this a lot especially the millennials and Gen Zs. Truth be told, these generations have bad spending habits like buying overpriced coffee and eating out.
If you’re guilty of this, ask your bank for an auto-deduction option. If it’s available, ask them to deduct money from your salary account and send it to a separate savings account. Don’t avail an ATM card for that account, use a passbook instead so withdrawing money will be harder to do.
A deadline is an effective way to motivate you in saving money. Once you see that you’re still far away from your dream amount, you’d be alarmed and reminded to be thrifty.
If your retirement savings or life insurance’s monthly contributions take a lot of your monthly earnings, talk to your agency into reducing the payment for a while. You might not be able to receive full beneficiaries in the future due to some reduction in premium contributions, but it’s still a smart sacrifice to make for buying a home.
Bleeders like Netflix, Spotify, or your local gym’s monthly subscription might cost a little money but add them all together for a year’s worth and you’d be surprised by the amount. You might as well go live back to your parents to save a lot from monthly rent!
Did you know that eating at home is cheaper and healthier than eating out or having food delivered? The next time you think about going to a restaurant or dialing for food delivery, think about how much you’ll save by stocking up from the grocery instead.
Want to review everything you’ve learned at Landlord Prep? Here’s the list of the important topics: