Yes, it is important to give yourself an allowance in order to build your real estate wealth portfolio.
Susan, how do I pay myself an allowance? Where does the money come from?
Simple, take a percentage out of your paycheck (let's say 25%) and set up a savings account in order to reach your goal to buy an investment property. Based on the price of the rental property, I would stash away 20-25% as a downpayment. Once you reach your goal, connect with a Real Estate Agent to start shopping, like me..lol. As you close on your home, either find a renter yourself, or use a Real Estate Agent to help secure a tenant. The tenant will then pay rent which ultimately pays your mortgage while you collect equity within the home. Paying yourself an allowance out of your paycheck can help grow your wealth portfolio quickly and result in an early retirement.
Different ways of finding the perfect tenant for your new investment property:
1) Contact a real estate agent to secure the tenant and run a background and credit check
2) Do it yourself:
A. List your property on the app called Zumper. Zumper is a one stop shop and free app that takes all rentals listings from third parties like zillow, apartments.com, etc and uses one platform.
B. Interview your potential tenant IN PERSON. Asking people to meet you at the house says a lot! You can tell a lot about people based on if they show up on time? Dress well? etc?
C. Make sure to have a list of questions when interviewing your potential tenant. (Ex: Are they employed? Do they have any evictions? How long have they been at their current company? etc)
D. Ask for paycheck stubs and possibly a bank account to reflect the security deposit. Check with the state that you reside in to see how much upfront you can ask for a security deposit. Each state is different.
E. Run a background check and credit check on the tenant.
F. Once you select your tenant, sign the lease and start collecting rent.
Repeat and buy another investment!