Have you ever thought about renting out a home and gaining financial freedom?
With rental rates continually climbing each year in the United States, it makes sense to get into the rental property business and start setting yourself up for long-term financial success.
But saving for your first Atlanta, GA rental property can be tough. After all, you typically need 20% down to buy an investment property. And people are notoriously bad at saving money. In fact, 47% of Americans claim they don’t have enough savings to cover a $400 emergency.
Do you fall into that category? If so, you’ll find that buying a rental property is not an option right now.
That said, we’re here to help solve your saving problems. If you want to build wealth by renting out homes, check out these budget-friendly ways to save for your first investment property.
Budget-Friendly Ways to Save for an Investment Property Without Breaking the Bank
1. Get Out of Debt
If anything is going to hold you back from saving up enough money to buy a rental property, it’s going to be your existing debt.
Before you start saving to become a landlord and rent out your home, you’ll need to eliminate all your debt. Doing this will help improve the status of your finances and help boost your credit. Plus, once all your debt is gone, you’ll be able to redirect all that money towards your savings instead.
One great way to rid yourself of debt is to use the snowball strategy. Here’s how it works:
- List all your debts from smallest to largest and ignore interest rates
- Make minimum payments on all your debts except the smallest
- Pay as much as you can on the smallest debt
- Once the smallest debt is gone, move on to the next debt until you all are paid in full
The key to the snowball effect is to roll the money you were spending on the smallest debt over to the next debt on your list. This will help you pay off your debt quickly. And since you’re paying off small debts first, you’ll gain a lot of momentum and feel like you’re really making progress. This will prevent you from giving up.
2. Set a Goal
Have you ever heard of Parkinson’s Law? Well, it says that work will expand to fill the time. In other words, if you give yourself a goal of 5 years to save up money for an investment property, it will likely take you the entire 5 years to accomplish your goal.
However, if you give yourself the same goal, but lessen the time to reach it by 2 years, you’ll likely still reach your goal. Of course, you cannot set unreasonable deadlines for yourself. For example, you can’t set a goal of saving $50,000 in 30 days and think that you’ll be able to reach it.
The point here is to sit down, decide how much money you want to save so you can start renting out a home, and give yourself a tough but manageable deadline. This will include the amount of money you want to save, as well as the amount of time you want to spend saving it.
3. Automate Your Savings
Once you’ve eliminated your debt and set a goal for yourself, it’s time to automate your savings. To do this, automatically save money from your paycheck or checking account into a separate savings account.
You can start small and increase the amount you save slowly over time until you adjust. From there, the savings will continue to grow without you realizing it. And since the money will be in its own separate account, you’ll be less tempted to spend your hard-earned savings on other things.
4. Set Aside Unexpected Money
Did you get a monetary gift from someone for your birthday, a bigger than normal tax refund, or a raise at work? If so, save that money!
Unexpected money has the power to propel you towards your savings goals faster than ever. And the great part is, this money is not money you rely on to pay the bills or fund your current lifestyle. In fact, just like automating your savings, unexpected money that goes straight into your down payment savings will not be missed.
5. Get a Side Gig
Sometimes, when you want to reach a big goal like saving enough to buy an investment property, you have to work extra hard in the beginning to reach your goal.
One of the best ways to supplement your current income and save more money is to get a side gig. For example, you can tutor, freelance write, sell on eBay, put advertisements on your car, or even take a seasonal job to earn some extra cash.
Most people work around 40-50 hours a week. That leaves plenty of time for you to make a little more money until you can get started renting out a home as a landlord. Trust us, the hard work you put in now will be worth it in the end.
6. Get a Roommate
If you know someone that needs a place to live, and you have extra room in your house, you might consider inviting them to live with you. While it may not cut your bills completely in half, the money your roommate provides for things like rent, utilities, and food will cut your monthly spending significantly.
Then, with all the unexpected money you now have, you can boost your savings and reach your goal in record time.
If getting a roommate is not something you’re able or willing to do, consider living in a cheaper place instead. The money you save on housing can go directly into your down payment savings account.
Sure, living in a cheaper place might not afford you all the luxuries you’re used to having. But this temporary inconvenience can help you get ahead. And after you buy your rental property and start generating a positive cash flow, you’ll be able to upgrade your living situation and secure yourself financially for years to come.
Are you close to hitting your savings goal so you can rent out a home and start making money?
If so, now is the time to start looking for an Atlanta property management company to help you manage the day to operations of your future rental.
In fact, when you contact Atlantic Property Management after you buy your first investment property, the first thing you’ll get is a Free Rental Analysis to discover the true value of your property.
In addition, you’ll receive help with things like vacancy advertising, tenant screening and placement, property inspections, and rent collection, so you don’t have to do it yourself.
We understand that good, efficient property management in Atlanta can be tough to come by. That’s why we take it upon ourselves to help you make the most out of your investment property, so you can reap the rewards of all the hard work you’ve put in to get to this point.