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Updated almost 5 years ago,
Saving for my First Down Payment
Earlier this morning I finished reading Rich Dad Poor Dad after having purchased it saturday afternoon and it's got me thinking about the strategy I'm using to save for my first down payment. I am currently putting atleast $700/month into a high yield savings account, and plan on using that to buy my first duplex to house hack next july (2021) when my current lease is up. But the lessons in this book have me wondering if finding a good REIT to invest my extra money each month into may be a better idea. The thinking here is that I obviously want to start working on my assets column ASAP, but I'm uncertain what the math looks like for these trusts if I'm going to be pulling from it next summer to buy my own property.
I see that these trusts make around 8% on average, and that the income is taxed, so is the 8% before or after taxes? Are the taxes automatically withheld like a paycheck from a W2 job or do I need to do that math myself and make sure I leave that money aside for taxes next year?
Are there generally deposit minimums or can I find a trust I like today and move the money I already have saved and start making my own cash flow today? Along a similar vein, are there generally transaction fees for depositing or withdrawing? This is probably the most important question because I intend on withdrawing from the account fairly soon so that I can buy the house and if there are generally large transaction fees this option may not be worth it for me.
And lastly, what REITs do you all have experience with? What did you like and dislike about them? Any and all information and perspectives are appreciated. Thank you ahead of time.
Ross Gleason