4 Money Tips For Buying Your First Investment Property
Buying your First Investment property can be a pretty exciting time.
Heck, with so much news on interest rates and speculation around home prices it might seem nearly impossible to purchase your first investment presale property.
But regardless of when you’re purchasing, buying an investment property is something that every investor should strive for (with goal of course being a long-term gain).
Before you start reaching for the stars and looking for the perfect property though you should do some prep work first — one of which is to make sure you’ve saved enough money for your down payment and closing costs.
To get started with your purchase, it’s important that you know how to save up for your first property and this is where these tips come in handy:
Tip#1: Start Saving Early
The earlier you start saving, the more time your money has to grow.
Compound interest is powerful! The first step is to put some of your paycheck aside every month.
Start by putting away just $50 a month and increase that amount as you get more comfortable with the process. You can save this money in an online bank account or traditional savings account.
Once you have a little extra cash coming in each month, consider using an automated savings plan so that money comes out of your checking account before you even see it. This way, there’s less temptation to spend it on something else!
The longer you wait to start saving and investing, the higher your monthly contributions will need to be and the more time you’ll have to spend working to save up for your first presale property purchase.
Tip#2: Double Down on Contributions from Employers
Take advantage of employer match programs for 401(k) plans and other employer-sponsored retirement accounts such as 403(b)s or 457s if available — especially if they’re matching contributions up to 6 percent of pay!
If not, consider starting one yourself with a Roth IRA (which has no contribution limits). And keep contributing until age 70.
While planning on buying a pre construction property, make the most of your tax refunds by having them deposited directly into an investment account rather than spending them on something frivolous like a new TV or vacation getaway that won’t add any long-term value to your life or finances.
Tip#3: Borrow from Your RRSP's
To buy your first condo or house, you can withdraw up to $35,000 from your RRSP. This is a great way to come up with a down payment if you already have some RRSPs. If you don’t, this may be a good way to save money for your RRSP and at the same time get a tax credit to help reduce your taxes.
If you’re buying your first home with your partner (or another first-time home buyer) then you can withdraw a maximum of $70,000
We recommend consulting your financial advisor, planner, or band for more information on how these contributions work. A good accountant or a financial planner will go over all the options catered to your needs and will help you achieve the goal of buying a pre construction investment property faster.
Saving for your first presale condo or presale townhouse can seem like a daunting task and to be really honest, it won’t be that fun because you’re going to have to sacrifice.
But with short-term sacrifice, you’ll be able to set yourself up for many years of ownership, profit, and the potential for hundreds of thousands of dollars in your pocket. Owning your own investment real estate portfolio rather than renting will prove one of the most successful decisions you can make for your financial future.
Tip#4: Consider a Freelancing Job
Taking on side gigs is an easy way to make some extra cash and help boost your savings account. You can do this by selling things on eBay or Craigslist, cleaning houses and doing yard work for neighbors, or babysitting for friends and family members.
Having a side income via a freelancing job will not only develop u entrepreneurial acumen, but will also allow you to save more for your first investment purchase.
If you’d like to learn more about strategies for buying your first home, get in touch with an Ipresale expert. We’d be happy to help you learn about the benefits of getting into the presale condo market and how doing so can help your wealth & portfolio goals in the long term
Find a Real Estate Mentor
Whether you’re looking for a condo pre-construction or resale, it’s always best to work with a real estate agent that is experienced in guiding people towards buying their first home. By working with an agent who has experience in both pre-construction and resale condos, you can rest assured that you’ll get all the information you need to make an informed decision about your next purchase.
For more information on condo developments in Surrey, contact the team at Ipresalecondos.
Ipresale Condos is not just an agency that sells real estate, but our agents believe in educating each client deal with their own professional situation. Please call or text at 604-825-8881 or email at info@ipresalecondos.com
