When buying an investment property with the intention of creating a positive cash flow through wrapping, you really need to be able to put down a great deposit. After all, the whole idea of a positive cash flow investment property is to be able to make payments that are significantly smaller than the payments that you are receiving from your buyer.
You will find that looking for a mortgage for your first investment property will be a different experience to the one you had when you were putting together the finance for your first home and property investors are treated differently than owner-occupiers. You may be considered a bigger risk to financial institutions when taking out another mortgage.
You also need to be really careful that you don't borrow too much. Remember, the finance institutions are really out for themselves and the last thing you want to do is create problems for yourself down the track.
But if you are new to property investing yourself, you may not have the funds necessary to put down a large deposit on your first wrap. So let's explore some ways that we can use to rectify this.
If you're really serious about starting your positive cash flow investment portfolio and want to put down that great deposit, how about taking on a little bit of extra work for a while such as overtime or an extra part-time job. It may cut into your spare time for a while but it may just be worth it.
Think about where you might trim costs for a while - for instance are you even using that gym membership? Could you make your own sandwich each morning instead of paying out a small fortune at the local deli? Could you cycle to work instead of taking the car on short journeys or cut down the amount of times you eat out at a restaurant per month?
As you save your money, don't leave it lying around in a jar or low interest savings account - put it to good use in the best savings plan you can find and watch it grow!
Before you know it, you will have saved the extra cash needed. Even by cutting your costs by around $200 per month and bringing in only around $400 extra per month to invest it in an account paying around 8%, you would have amassed over $10,000 in only one year. Something that is very easily doable indeed!
To Your Success
The Aussie Wrapper