{"id":187272,"date":"2026-03-23T13:00:18","date_gmt":"2026-03-23T19:00:18","guid":{"rendered":"https:\/\/www.biggerpockets.com\/blog\/?p=187272"},"modified":"2026-03-23T13:00:21","modified_gmt":"2026-03-23T19:00:21","slug":"how-to-lower-expenses-to-save-more-and-invest-in-real-estate","status":"publish","type":"post","link":"https:\/\/www.biggerpockets.com\/blog\/how-to-lower-expenses-to-save-more-and-invest-in-real-estate","title":{"rendered":"A High Cost of Living is Making it Tough to Save and Invest\u2014Use These Practical Tips to Stay on Track"},"content":{"rendered":"

A recent <\/span>Wells Fargo survey<\/span><\/a> shows that nearly all Americans want to save in 2026, but doing so is proving harder than ever.<\/span><\/p>\n

Being able to save is one of the core pillars of real estate investing. Amid a cost-of-living crisis, more people are finding it harder to accomplish.<\/span><\/p>\n

\u201cThe findings tell us that when people feel in control of their money, it has a positive association with self-care, happiness, and freedom for most people, even though about half are at odds with spending versus saving,\u201d said Chris Starr, Wells Fargo\u2019s head of deposits. \u201cBut life happens, and many adults can\u2019t cover a financial surprise. A clear plan to manage spending and save where you can lowers stress and puts you in control of your money.\u201d<\/span><\/p>\n

Unrealistic Expectations<\/span><\/h2>\n

The problem many real estate investors face is that we <\/span>are bombarded<\/span> with <\/span>hard-to-duplicate success stories<\/span><\/a>\u2014people who were working low-paying jobs who found a seller willing to hold the note and then found others<\/span>, and before<\/span> you know it, they were amassing doors and <\/span>cash flow<\/span><\/a>.<\/span><\/p>\n

While that <\/span>might<\/span> be possible, many of these stories<\/span>, in my opinion,<\/span> set a dangerous precedent because they involve high risk and leverage<\/span>, and for<\/span> every such story, there are many more that end in financial disaster.<\/span> What many of these stories fail to explain is that attaining the doors is one thing, but holding on to them when you are highly leveraged is another.<\/span><\/p>\n

Far more common and realistic are stories of real estate investors who<\/span> kept their steady, decent-paying full-time jobs<\/span><\/a>, amassed some savings, and invested cautiously, with a buffer of cash on the side to help them overcome inevitable obstacles as they built their portfolios. Now that saving money is harder than ever, investing safely in real estate is becoming more difficult. However, that doesn\u2019t mean <\/span>it cannot be accomplished<\/span> with discipline and sensible investing strategies.<\/span><\/p>\n

A Reality Check<\/span><\/h2>\n

Before launching into saving strategies in today\u2019s market, these are the realities that savers are currently facing.<\/span><\/p>\n

The cost of living has increased in all <\/span>areas<\/span><\/h3>\n

Bloomberg<\/span><\/a>: Overall inflation has cooled, but Americans still pay about $126 today for what cost $100 before the pandemic, with the biggest jumps in costs of groceries, housing, utilities, and car insurance.<\/span><\/p>\n

Renters are cost-burdened<\/span><\/h3>\n

Harvard University\u2019s Joint Center for Housing Studies<\/span><\/a>: For current renters looking to save for a <\/span>down payment<\/span><\/a> on a small <\/span>multifamily<\/span><\/a> dwelling, it often feels as if you are facing an endless uphill battle. In 2024, nearly 23 million renter households spent more than 30% of their income on rent and utilities\u2014nearly half of all renters. Cost burdens have risen in 44 states and 88 of the 100 largest metro areas over the past five years.<\/span><\/p>\n

Monthly mortgage payments have <\/span>doubled<\/span><\/h3>\n

Yahoo! Finance<\/span><\/a>:<\/span> Citing analysis from Strategas, <\/span>Yahoo! Finance reports that<\/span> the average monthly mortgage obligation has \u201cmore than doubled\u201d in just over five years as higher interest rates<\/span>, <\/span>with increased<\/span> house prices (not to mention taxes and insurance)<\/span>, <\/span>pushed typical payments over $2,600 by April 2025.<\/span><\/p>\n

Greater amounts of money <\/span>are needed<\/span> for a down <\/span>payment<\/span><\/h3>\n

Bloomberg<\/span><\/a>: Goldman Sachs economist Elsie Peng estimated that a couple now needs about 70% of their annual household income to afford a standard (20%) down payment on a median-priced home, up from 58% in 2019.<\/span><\/p>\n

Practical Ways to Save<\/span><\/h2>\n

As real estate investors, we have always prided ourselves on thinking creatively about financing, using techniques such as <\/span>subject-to<\/span><\/a>, <\/span>seller financing<\/span><\/a>, <\/span>rent-to-own<\/span><\/a>, <\/span>private money<\/span><\/a>, <\/span>DSCR loans<\/span><\/a>, etc. It\u2019s easy to get caught up in the hype of these work-around solutions instead of having to dip into your pocket for a big down payment.<\/span><\/p>\n

What <\/span>is often overlooked<\/span> is <\/span>the fact<\/span> that, as an investor, you still owe the monthly mortgage payment, and chances are it is <\/span>a lot<\/span> higher than if you financed conventionally (unless you inherited a low rate).<\/span> In an age when everything else is going up, leaving yourself with small margins and little cash on the sidelines is not wise.<\/span><\/p>\n

It\u2019s fine <\/span>when using<\/span> OPM for the down payment, as it <\/span>allows<\/span> you <\/span>to<\/span> keep <\/span>hold of<\/span> your savings for emergencies.<\/span> The problems arise when you are using OPM because you don\u2019t have any savings to start with.<\/span><\/p>\n

One way to save more money is to take a holistic view of your expenses. Here are some ways to do it.<\/span><\/p>\n

Cancel subscriptions and <\/span>memberships<\/span><\/h3>\n

Rather than waiting for costs to drop, a more practical solution is to carve out investable cash from your existing budget, which, admittedly, is easier said than done.<\/span><\/p>\n

MarketWatch<\/span><\/a> experts suggest taking a holistic look at all your expenses, including recurring costs such as streaming services, app fees, subscriptions, and unused memberships. If you have a specific target, look to eliminate or at least downgrade it.\u00a0<\/span><\/p>\n

Individually, it might not sound like much in your quest for mortgage money, but collectively it can add up, especially if you have your eye on an FHA loan with a 3.5% down payment.<\/span><\/p>\n

Save on healthcare<\/span><\/h3>\n

CNN reports that millions of Americans are facing higher premiums and out-of-pocket costs as the Affordable Care Act costs expire. Shopping around for plans, using employer benefits, and effectively avoiding medical expenses where possible can free cash for a down payment and reserves.<\/span><\/p>\n

Pay down debt<\/span><\/h3>\n

Unless you have a firm handle on your debts, they have an annoying habit of increasing. Before investing, put your savings toward eradicating bad debt, such as credit card, student loan, and store card debts. By doing this, you have effectively kick-started your cash flow by boosting the amount of money left in your pocket at the end of the month.<\/span><\/p>\n

Increase income<\/span><\/h3>\n

Here\u2019s another heading that falls into the \u201ceasier said than done\u201d category. However, there are practical ways to do this that don\u2019t involve driving an Uber through the night or working side jobs at Starbucks and Home Depot\u2014although these are <\/span>excellent ways to get healthcare coverage<\/span><\/a> plus extra income if you have the time.<\/span><\/p>\n

Live somewhere cheaper<\/span><\/h3>\n

You don\u2019t have to emigrate to Cambodia to accomplish this, though <\/span>living and working remotely<\/span><\/a> can certainly turbo-boost your ability to save. Other, less drastic measures include taking in roommates or short-term rental guests, or moving in with your parents or family members to help you save money. Alternatively, you could choose to become a short-term tenant in a room in someone\u2019s house rather than renting an entire apartment.<\/span><\/p>\n

Look for practical side <\/span>hustles<\/span><\/h3>\n

Rarely does a day go by that I don\u2019t see an influencer telling me how they made millions of dollars online by working five hours a week in their shorts and flip-flops by a beach.<\/span><\/p>\n

As tempting as it is to try to go down that rabbit hole of easy cash, the safer bet is to do something where the money is more guaranteed. It might not be glamorous or very well paid, but it\u2019s not forever, and when done alongside everything else, the goal is to get you to that first down payment faster.<\/span>\u00a0<\/span><\/a><\/p>\n

Nerdwallet<\/span><\/a> breaks down some no-nonsense ways to get your money right.<\/span><\/p>\n

Final Thoughts<\/span><\/h2>\n

The strategy of lowering expenses and increasing income is from the school they knocked down to build the new school. However, as vintage as it is, it still works. If you plan to invest in real estate in the current high-expense era, having sufficient cash is a must.<\/span><\/p>\n

Put the blinkers on and don\u2019t get sidetracked by the \u201cI was delivering pizzas a year ago, and now I\u2019m making $100K in cash flow a year\u201d stories because you are setting yourself up for a big fall, even if you have lenders or private money willing to back you. <\/span>You still owe the money, tenants are still liable to skip <\/span>paying<\/span> rent, and repairs will inevitably <\/span>need to<\/span> be <\/span>done<\/span>.<\/span>\u00a0<\/span><\/p>\n

So focus on the hard work of saving cash and explore the joys of eating beans and rice a few times a week. It\u2019ll be worth it in the long run.<\/span><\/p>\n","protected":false},"excerpt":{"rendered":"

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