Investing in real estate is undoubtedly one of the greatest ways there is to make money. However, starting a real estate investing business and becoming a successful real estate investor takes time. Real estate investing is definitely not for those who look for fast profit but rather for those looking to make some serious money in the long run. That’s because in order to start making money through real estate investments, you initially have to save some money to buy your first rental property and continue buying rental properties. And then we come to the question bugging millions of people in the US and around the world: How to start saving money… in order to begin buying investment properties and investing in real estate? An even better question is how to save money fast for your first rental property in order to be able to become a real estate investor as soon as possible? Well, let’s take a look at some of the best ways to save money:
Related: How to Save Money in Order to Invest in Real Estate
1. Make saving money a priority
If you wonder how to start saving money now in order to be able to buy an investment property in the future and be on your way to becoming a successful real estate investor, you need to know that the first step is making money saving a priority. Although there are no universal easy ways to save money, this definitely is a process which has to happen intentionally, i.e., you have to put some thought into how to save some of your income and exert some efforts in order to start saving money. The motivation behind it – buying an investment property and getting rich from real estate investments – should decrease the stress on you by making you feel more driven and inspired.
2. Change your lifestyle
The second tip on how to start saving money for your future real estate investment business is to reconsider your whole lifestyle and implement some major changes. No one ever said that saving money from your regular income for buying an investment property is easy; to the contrary, thinking of how to save money will require you to change some of your habits related to spending money. For example, are you used to having a $5 latte on your way to work every morning? If you want to be a real estate investor, you can easily drop this latte and replace it with a free filter coffee once you make it to the office. While saving $5 a day does not sound like a lot, this is just one small tip on how to start saving money from your daily routines. Once you’ve built a successful real estate investing career, you will be able to go back to these expensive daily habits and many more.
3. Budget carefully
If you are on your way to becoming a real estate investor, you will definitely need strong budgeting skills to get the money to buy a rental property. You have to begin to learn how to budget your money right away. Once you’ve put down all your monthly income sources and your monthly costs and calculate the difference between the two (hopefully a sizable positive difference), you will be able to see clearly the best way for you to save money. From there, you can make a detailed plan on how to save more money every month and then follow this financial plan strictly in order to save up enough cash for buying an investment property. Thus, obtaining good budget skills is one of the most important steps on your way to learning how to start saving money on regular basis.
Related: How To Budget For An Investment Property and Cash Flow
4. Move money to your savings account at the beginning of the month
Regardless of how strict you can be with your financial resources, there is always a temptation to buy something extra each month which is not necessarily a priority at the moment. So, if you want to know how to start saving money now in order to be able to enter the world of real estate investing in a few years, here is another saving tip: move a fixed amount of your monthly income into your savings account as soon as you receive your payment. An important rule in learning how to save money to buy a rental property: Don’t wait until the end of the month to make the transfer needed for saving money for your first rental property because you might just as well spend this money on something unimportant. And money allocated to real estate investing is better used than money spent on buying something else.
5. Make more money
The money you save each month is the difference between what you make and what you spend in this particular month. So, another way of how to start saving money to buy your first rental property – other than controlling your expenses – is raising your inflows of cash. Before you get busy building a career in real estate investing, you can try to get some part-time job for additional income to supplement the monthly income you get from your full-time job. Even if you make just a few extra bucks each month, this will allow you to set it all aside and will turn into one of the easy ways to save money to buy an investment property as you will not need to sacrifice any of your current expenditures. Moreover, you will be used to working two jobs for the time when you are ready to become a real estate investor with multiple investment properties, in addition to your 5-to-9 job.
6. Improve your educational status
Related to the tip for saving money above (by making more money through better income), you should consider boosting your education. This is the most straight-forward way to enhance your career options and get a serious pay raise. While education can itself require some serious financial resources, you should explore all options for getting a scholarship or other financial support. Even if this doesn’t work out, remember that education is one of the best investment options there is, so any money you pay for increasing your educational attainment is likely to pay off soon. So, when exploring options how to start saving money in the medium term to pave your road to becoming a real estate investor, don’t ignore the potential financial benefits of getting more qualified for your current job.
7. Abstain from buying a home
Every person is more or less tempted to buy a home as soon as possible. It just gives us a sense of security. However, that’s not always a smart decision for a real estate investor as you are aspiring to become. Actually, it’s generally recommended to use any saved up money to buy a rental property rather than a home because an investment property will let you make money while a home will only require you spending money on it. So, if you are looking for ways how to start saving money, definitely postpone the step of buying your own home for the time being. Paying rent is significantly cheaper than paying off a mortgage loan. Thus, aim at buying a rental property first and a home second.
Related: Why You Should Buy an Investment Property While Renting
One of the most important steps on the way to entering the real estate investing business is securing enough investing money to begin buying rental properties. Thus, it is of crucial importance to learn how to start saving money as soon as possible in order to be able to become a real estate investor soon. The tips above should help you in this journey to the world of real estate investing. Once you are ready to start searching for an appropriate investment property, make sure to check out Mashvisor for thousands of potential rental properties across the US and for the most important figures on them provided by the rental property calculator.