Lesson 2 – Getting your finances ready

Before you’re able to do anything, what you have to understand is without finances you’re not going to be able to get anywhere. All you need is if you have 15,000 to 50,000 euros saved up you’re ready to start. I know the margin I have given you is large however there is a wide range of rental property somebody can get into with their first purchase. This depends entirely on your financial situation in the beginning. If you are unable to come up with any kind of savings, you have to first find a way to save a reliable amount of money to be able to start.

Personal finances come first

Banks and lenders do not finance properties they finance people . Banks are going to look into your history. All the purchases you have made in the past years, if you have debt, how strong is your credit and how responsible are you paying what you owe. All these are going to influence how and how much money you can borrow, which is going to be directly linked into how far ahead your first step takes you. Before you can think about building your portfolio you have to get your finances straight and get in the good side of the financial system. It is important to understand. This doesn’t mean you have to be rich. It just means you have to have a responsible and clear background.

Key financial areas to assess

A quick checklist that you should really have in order before you start is knowing your income, expenses, debt, credit and savings. An emergency fund is extremely important and is a must have. Your emergency fund should allow you to live 3 to 5 months without needing any extra money.

Preparation creates confidence

Not everyone is going to be able to start at the same place and that is okay because nobody starts at the same place as another. If you are feeling confident in your research your resources and your preparation, you’re not going to be at the mercy of emotional decision making. Emotional decision making is what leads people to bankruptcy very quick.

Remember the first investment is your research and preparation not a move in the market.