When people start thinking about buying a home, either their 1st home or for an investment, one of the first questions is usually:

“How am I ever going to save enough for the down payment?”

Before we talk about saving, let’s clear up one of the biggest myths in the real estate industry regarding 1st time home buyers:

You do NOT necessarily need 20% down to buy your first home.

Many potential buyers assume they need to save 20% of the purchase price before they can even consider buying. Depending on the buyer and the loan program, there are financing options that may require far less than 20% down.

Conventional loans may offer low-down-payment options, FHA financing can allow qualified buyers to purchase with a relatively small down payment, VA loans can potentially offer zero-down financing to eligible borrowers, and there may also be down-payment assistance programs available to qualified buyers.

So, if you’ve been sitting on the sidelines because you think you need 20% down, don’t automatically assume you’re years away from buying a home. Talk with a knowledgeable lender and real estate professional and find out what you may actually need. If you need a trusted referral just contact me and I will get it to you in seconds…

You might be much closer than you think!

But You Still Need a Savings Plan

Even with a lower down payment, buying a home usually requires money for your down payment, closing costs, inspections, moving expenses and other costs associated with purchasing a home.

And if you already own a home and your next goal is purchasing an investment property, saving becomes even more important. Investment-property financing typically requires a larger down payment than financing for a primary residence, with 20% being a common planning target, although requirements vary by loan program and borrower.

Whether you’re saving for your first home, your next home or an investment property, here are five simple ways to build that fund faster.

1. Set Up a Separate “Home Fund”

Open a separate savings account specifically for your future real estate purchase and set up an automatic transfer every payday.

Even if you start with only $50 or $100, you’re creating the habit of paying your future self first.

As your income increases or expenses decrease, increase the automatic transfer. Keeping this money separate also makes it much less tempting to spend.

2. Take a Hard Look at Monthly Subscriptions

Streaming services, apps, memberships and other automatic charges can quietly add up.

Take 15 minutes and review your bank and credit card statements. You might be surprised by how many things you’re paying for that you rarely use.

Eliminating just $100 per month in unnecessary expenses puts an additional $1,200 per year toward your next property.

3. Cut Back on Eating Out and Delivery

You don’t have to stop enjoying yourself or never eat at a restaurant again.

But restaurant meals, food delivery and daily coffee runs can easily add up to hundreds of dollars every month.

Try cooking at home a few extra nights each week. Better yet, when you decide not to spend that $50 or $75 on dinner, transfer the money you saved directly into your home fund.

Now you’re not just spending less—you’re actually watching your down payment grow.

4. Save Your “Extra” Money

Tax refunds, bonuses, commissions, overtime, birthday money or income from a side hustle can make a huge difference.

Instead of allowing unexpected money to slowly disappear into everyday spending, consider putting all—or at least a portion—directly toward your real estate fund.

A few larger deposits throughout the year can dramatically shorten the amount of time it takes to reach your goal.

5. Give Yourself a Specific Goal

Don’t just say:

“I need to start saving for a house.”

Give yourself an actual number and a timeline.

Saving $500 per month = $6,000 per year.

Saving $1,000 per month = $12,000 per year.

Once you have a specific target, saving starts to feel much more like a plan than a dream.

Already Own a Home? Start Saving for Your First Investment Property

Down payments aren’t just an issue for first-time homebuyers.

If you already own your primary residence, your next goal might be purchasing an investment property and beginning to build a real estate portfolio.

Because investment properties generally require more money down, it’s especially important to start planning early.

For example, if your goal is to purchase a $300,000 investment property and you’re planning around a 20% down payment, your target would be:

$60,000.

At first, $60,000 might sound overwhelming.

But break it into a five-year plan:

$60,000 á 5 years = $12,000 per year, or $1,000 per month.

Add bonuses, tax refunds, commissions or other extra income, and you may be able to reach that goal even sooner.

And during those years, your current home may also be building equity. Depending on your financial situation and financing options, that equity could potentially become another resource when you’re ready to purchase an investment property.

The Most Important Step? Start With a Plan.

Whether your goal is to buy your first home, move into your next home or purchase an investment property, don’t let the down payment keep you from getting started.

For first-time and primary-home buyers, you may need considerably less than 20% down.

For future real estate investors, start building that larger down-payment fund today—even if your purchase is still several years away.

Small changes made consistently can turn into thousands of dollars surprisingly quickly.

Thinking about buying a home or investment property but aren’t sure how much you’ll actually need? Reach out to me. I’d be happy to help you look at your goals, discuss your options and put together a realistic game plan for getting there. Call/text/email me anytime 702-218-4585 or simply reply to this email… Or visit me on my website www.darylhannarealtor.com and click on the contact Daryl button….

Wishing you the very best! 

– Daryl