I'm wondering what everyone does with their down payment money they have saved while they're looking for rental properties. I'm totally inexperienced with investing my money outside of real estate and my work retirement. I have a nice amount saved up that I plan to use for a down payment or two for some rental properties but I'd like to have that money working for me while I'm looking for deals but it obviously needs to be easily accessible for when I do find something. What do yall do?
Hey @Whitney Breedlove ! I personally hold my cash reserves in a high interest savings account. They used to give really decent returns before interest rates started dropping, but they're still better than nothing. I use Ally Bank and Wealthfront, I think Ally is currently 0.5% APY and Wealthfront is .35% APY. These will keep your money "safe" as it is a savings account and won't fluctuate negatively with the market, and will give you a very small return so is slightly better than a traditional savings account. I know I've seen others keep their reserves in brokerage accounts which has the chance at much better returns, it's just hard to know what this market will look like short term and I personally will need that cash in the short term so don't want to risk a loss. Best of luck!
Thanks @Luke Trovinger ! That's actually what I'm currently doing as well. I have my money in a money market account with CIT Bank. But yeah you're right, when I first got it 3 or so years ago the interest rate wasn't bad but now I'm getting 0.45%.