5 tricks for saving for your property investment
The rising values of real estate mean investment property in Auckland is providing great returns.
Figures from CoreLogic NZ show that the prices of homes have risen nearly 19 per cent in the year to August 2015, with the average value now sitting at around $855,000.
With these escalated prices, it's a good idea to give yourself a better chance in the market, with a nice little (or large) savings account set aside to act as your down payment for your mortgage lender.
Here are a few tricks to help you build your nest egg.
Set an end goal
The first thing you should do is create an end goal that you will be able to adhere to. Bear in mind that the Commission for Financial Capability recommends having a deposit of at least 20 per cent. Thus, you should find out the price of your ideal home, and aim to save a fifth of that.
One of the oldest tricks in the book – still there because it works. You've got your savings account set up for your property investment, now simply arrange a weekly automatic payment from your normal transaction account.
If you're real cunning, you will time the transfer so that it coincides with your pay day. This way, you won't even realise the money has gone! Once you've adjusted to a demoted paycheck of course. In addition, your mortgage lender will like the fact that you've got a regular savings habit.
Cut back on the treats
It sounds like a diet, and unfortunately that's essentially exactly what it is. Any luxuries you currently live with that aren't necessary, you should remove or reduce. These can include:
- Buying your lunches everyday
- Your cable TV subscription
- Gym membership
- New clothes
- Expensive nights out on the town
Sell your clutter
Throwing all your unused belongings on Trade Me is a great way to offload your junk in exchange for cold hard cash, which you can then put into your savings account.
Furthermore, along with tidying up your home, it can also make your next move much easier. Among other things, you won't have to worry about taking your very much redundant rowing machine, CD collection and old pop band posters with you.
Speak with a professional
Discussing your property investment ambitions with a professional adviser can help clarify your vision and give you a target to save towards.
Not to mention the chance to receive some unique insights and advice on what to do with your home loan once you're successful with your savings.
Here's to your financial independence!
Authorised Financial Adviser / Investment Property Expert
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