Looking to buy your first investment property can often seem like quite a daunting task. However, there are several thousands of people looking to purchase investment properties, as shown by 47,400 new buy to let companies being set up in 2021 on Companies House, in the UK. With an ever-growing demand for properties, and with 18.5% of households being private renters in 2021 (according to Statista), now is as good a time as ever to purchase your first investment property.

To purchase an investment property, you are normally required to have a deposit for 25% of the purchase value of the property. This means if you were to purchase a property for £100,000, you would need a £25,000 deposit. 

There are in some cases, mortgage lenders who will allow you to put down a smaller deposit, but according to Justine Gray from consumer lending platform Dollar Hand “having a smaller deposit can often lead to less favourable interest rates, and high credit scores are often required.”

Saving is one of the hardest things to do when purchasing an investment property, but here are a few ways you can make your money go further and hopefully get that deposit sooner than expected:

Try and reduce your current bills

Saving money around the house is extremely useful, especially at a time where costs are at an all time high. If you can reduce your phone bill, electricity, heating, water, and everything else even by £20 per month, that will really add up in the long run. Consider canceling any unessential subscriptions that you don’t regularly use such as gym memberships or TV packages.

Try to eat out less

Eating out can be a huge expense, especially for people going into the office to work 5 days a week. If you were to go to the local shops and spend £5 a day on your lunch, that would amount to £100 a month just on food alone. If you also go and get a coffee before your day at work, and spend another £3 per day, that’s another £60 on average per month. Rather than doing this, try to prepare your food at home and save that £160 per month towards your investment property.

Automate money into your savings each month

It’s very easy for all of us to look at our bank account, see some extra money and simply go ahead and spend it on food, clothes and leisure activities as we assume this is just extra money to be used. This is not the right attitude to have and if you want to save up for that investment property it is imperative that you make sure you automatically move a certain amount of your income into a savings account as soon as it comes into your bank. 

Of course, if you need that money, then it’s another story, but if you can afford to move that money and not touch it, then this is a great way to put some extra money away. You’ll be amazed after a year just how much you will have in that account.

Sell items you don’t need anymore

If you want to save up that extra cash, you can always look to sell old clothes, electronics, gadgets, anything, and everything that you don’t need anymore. This is a great way to get rid of clutter and add a few extra pounds to that savings pot.

Conclusions

If you are really focused on wanting to buy your first investment property, these tips should help you save up a lot more than you may think. The great thing is, it will all be worth it once you purchase that first investment and reap the rewards that come with it.