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RSSInterim Savings Goal of $80,000 for Home Down Payment
Now that I have converted my current home to a rental property, it's time to start thinking about my next property. My fiancee and I believe that in 12-15 months we will be in position to start looking for a new home.
We are still discussing whether we might try and squeeze out one more - buy, improve, and rent out project before we settle down more permanently. However, its clear we are getting closer to establishing more permanent quarters for us. This means a larger home with larger expenses and a larger mortgage although we both hope to buy a home more moderate than most of our peers.
In order for this to be manageable for us from a monthly cash flow perspective, we want to build up a large down payment. Although we don't know how much we will spend on our home, I am guessing it will be somewhere between $250,000-$400,000. I assume it will be on the more affordable side of this range, but I know we cannot afford to exceed a $400,000 purchase price so I will use this for planning purposes. I want to put down AT LEAST a 20% down payment which means we need at least $80,000 saved up. In order to get close to this savings goal I will need to roughly generate at least $5,000/mo in cash savings. I don't even take this much home in my paychecks each month so this is going to be a challenge -- I basically need to save as much as possible each month and hope opportunities will pop up along the way to add additional cash savings.
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Comments (5)
That's a challenging goal you've set for yourself, I'd be interested in hearing how you accomplish it. I've been trying to come up with ways to make some extra income and seeing people set their sights high and reaching them inspires me.
Posted by Matt | July 19, 2007 8:21 AM
I love this goal, what a fantastic 'next thing' to reach for!!
I'd say if you can do another possible conversion with the next one, that just gives you more options (which means probably going with a smaller more affordable home so you can turn it into a positive cash flow rental).
Good stuff!!
Posted by finance girl | July 19, 2007 5:44 PM
This number is reachable if you look at it from the perspective that you've got about $20k available in cash when you net out the balances due on the 0% cards, plus you've got $35k in employee stock purchase funds, but I'm not sure how liquid that is.
And obviously you don't want to spend every nickel you have because not having cash on hand is horrible (espeically with then owning three properties) but if you transferred some of this as part of your down payment, I don't think you'd be doing a disservice to yourself or your goals.
After all, isn't the reason we save responsibly so that we can afford to make major purchases like this without stretching ourselves too thin.
Just something to think about...you've done very well where you'll definitely have options when the time comes. That's a sign of success right there!
Keep it up and keep blogging, it's one of my favorites.
Posted by Michael | July 20, 2007 1:35 PM
I have an investment property. Priced low. Rental property in Montgomery, Alabama. Poperty manager is in place. Just make a purchase and it rents for $500/month. Asking $39,500. Call 904-505-6020
Posted by Barbara Whelan | July 22, 2007 12:39 AM
I saved almost $25k because I thought I was going to be stationed in Texas. Now, I'm stationed in California and there is no way I can save 20% down. $80k is a lot to have just sitting in cash.
Good luck, I will be reading frequently to see what happens.
Brandon J
http://moneyformilitary.blogspot.com
Posted by Brandon J | July 29, 2007 5:52 PM