I want to congratulate you on two things: being single and living in a small city. This combination of events puts you in the best position to save for a home.
Welcome to the Saving for a House Down Payments series, where we will formulate a path to homeownership.
Getting serious. As a young single person, becoming serious is the toughest part of life. You’ll have to fight your hormones and materialism to find your true self.
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Women figure this out much faster than men, so there is a disconnect between the genders. To help you find your way, please read these articles:
- Retirement Planning in Your 20s
- Dividend Investing in Your 20s
- Real Estate Investing in Your 20s
- Staying Debt-Free In Your 20s
Survey your area. Now that you have your head screwed on correctly, it’s time to survey your location. I consider a small town as an area with less than 100,000 people. You may have a different definition.
How much does a small house cost? By small, I mean under 1,500 square feet—if you can find a place this size.
One of the problems with living in an affordable area is upgrading the size of your home. You may feel the urge to skip the “starter home” and move to a dream house.
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Well, let’s put this idea to rest right now. Trust me; my wife and I started with a bigger dream home in 2008. It was a financial nightmare that took us years to overcome. Start small; plus, starter homes are so much easier to rent.
Determine your number. So how much does a home cost in your small city? Let’s go with $150,000. Remember, this can be a townhome as well.
I don’t recommend a condo only because of the homeowner association fees. If they are reasonable, you can consider the place. However, if you have options, avoid condos.
If your number is $150,000, your proposed down payment will be $30,000. This is 20% of the cost of the home. Yes, there are ways to reduce the down payment, but let’s save the money.
If you can reduce or eliminate the down payment, we can use the cash to create cash flow via a storage shed or finished garage.
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Saving is fun. How do you save $30,000 as fast as possible? You make it a game that you play every day. To play this game, you must make as much money as possible. Let’s start with your job.
The problem with living in an affordable town is that the pay is also low. However, after the pandemic, we have many more opportunities to bring in high levels of income.
Remote work. The first option is to get a high-paying job via remote work. To get a high-paying job, you need a high-paying skillset.
If you don’t have a technical or in-demand skill, you’ll need to invest in yourself to get one. This doesn’t necessarily mean college, but perhaps a technical course.
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You should aim to make at least double the average salary in your area. This may take a few years, but it will give you a lifetime of increased income.
The gig economy. You can also increase your income by working gigs and freelancing. The only thing that can stop you is your work ethic.
You can work up the ranks of writing articles, editing, translating, driving, delivering, or assisting the elderly.
You would be exchanging time for money, but it would serve the purpose of saving for your down payment.
Combine your job and gig work to start pumping up your savings rate. You’re a single person, so you have no excuses. You should be putting in at least 70 hours of work a week.
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Content creation. Another way to increase your income is by becoming a content creator. In fact, an excellent way to start is by documenting your journey to save for a down payment.
You can become a blogger, YouTuber, or podcaster. Creating content takes a lot of upfront effort, so you may need to sacrifice your gig time. However, keep your day job. It may take 3-5 years to see significant cash flow from your content.
Where to save your money. Now that you have cash coming in, where do you keep it? Currently, the best places to save your money are:
I usually love to recommend my favorite crypto coin, USDC, but there is a lot of turmoil in the crypto-space today.
As someone who owns property and has a pension, I can still invest in USDC. But I don’t recommend it to young people who are starting. Take the safer options for now.
Happy Cash Flow Retirement 6
Chasing the prices. Housing prices are growing rapidly, and it will be hard for you to keep pace. It’s okay, don’t overthink it.
If you can show your savings account, there will always be a way to get into a home. You may have to get creative in your financing, but don’t fret.
The important part is that you have the down payment. If you can show the bank a high salary, your down payment, plus additional sources of income, they may lower your down payment to 10%.
Always see the bright side of the situation. If you remain negative, you’ll get a lot of bad results. If you stay positive, things will work out in the end. You create your outcomes.
Real Estate Investing in Your 30s
Conclusion. Most of the articles in this series will be similar, with slight wrinkles here and there. The basic formula will be to create a starting point. From there, you increase your income, reduce expenses, work more gigs, and become a content creator.
As we progress, the houses will get more expensive, and your family will grow in size. These scenarios will require extreme discipline and a long-term outlook.
As a single person in a small city, you are in the best scenario to buy a home. You can keep your first house even if you plan to move to a big city.
Investing is about parlaying each situation into a bigger and better result. The most challenging part of real estate is your initial home investment. Take it seriously, and you’ll win in the end. Good Luck!
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Disclosure: I am not a financial advisor or money manager, and any knowledge is given as guidance and not direct actionable investment advice. I am an Amazon Affiliate. Please research any investment vehicles that are being considered. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it. I have no business relationship with any company whose stock is mentioned in this article. All Right Reserved Military Family Investing
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