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How to Prepare To Buy An Investment Property

Are you beginning to save for an investment property? If so, you’re probably aware that you are going to have to make some sacrifices in your life. Luckily, saving for an investment property really doesn’t have to include huge sacrifices, but you are going to have to have to make some lifestyle adjustments. That is if you want to reach your financial and investment goals sooner rather than later. It’s often the case that people aren’t sure where to start and where to cut back to get maximum benefits.

Luckily, there are plenty of people who have gone before you, and who are only too willing to tell you the secrets of they have learned about how to save! If you don’t have any property, or if you’re saving for your first investment, you’ll have to save up a deposit of some sort. Even if you’re using lender’s mortgage insurance you will still have to have some sort of cash accessible as a deposit at the bank.

The thing about owning one investment property already – or even your own home – is that there is the potential that they will have had some capital growth. That means that there might be some collateral available in your home already to use as a deposit.

If you think  this might be the case, it’s advisable that you go and see your bank or mortgage advisor who can help you choose a Homestart home loan and who can advise you on the best way to proceed.

Now let’s take a look at how you can start saving for your first, second or even third deposit.

Take a look at how you can cut back and then make sure that you do it. Don’t just say you will. If you happen to get a coffee every morning – even though it’s a tired old adage – think about how much it’s costing you every year. If you’re just getting a standard long black then it’s probably around $1,000.  If you’re getting some fancy coffee where the cost is up to six or even seven dollars, then the cost is going to be sadly quite a bit higher.

Are you spending money on things that might be a huge waste of cash at a frugal time? You might have a big phone plan, or even just go out for lunch outside the office a few times a week. Maybe you have a gym membership that you don’t even use, or a subscription to something that continues to take money out of your account and that you mean to cancel, but haven’t.

It’s easy to ignore these kind of seemingly small expenses when you’re not saving for anything in particular, but once you start counting the pennies every single bit helps. If you have a partner, why don’t you look at each other’s finances and find ways that you can cut costs for each other? Try making lunch for each other on alternate days as well. Simple gestures can make saving a lot easier.

Put all of your savings into a high interest bank account that you really can’t touch. This is a great option for people who love to spend, because you can’t access the account when you want to make an impulse buy or last minute purchase. Perhaps think about not taking the credit card when you go out on a Friday or Saturday night or controlling your spending with a budgeting app. You’ll soon see the savings mounting up and you’ll have your first/next deposit in no time!

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