Richmond is a city with a deep-rooted history, remarkable landmarks, and a unique blend of cultural, outdoor, and culinary experiences. It’s a place where history intertwines with modern-day vibrancy, offering a multitude of experiences for both residents and visitors. Richmond doesn’t just rest on its historical laurels; it continuously evolves, making it a fascinating city to explore.
From its pivotal role in American history to its thriving arts scene, Richmond is a city that proudly showcases its achievements and attractions. Whether you’re drawn by the call of the James River or the allure of its historic streets, this guide will introduce you to what makes renting an apartment in Richmond a great call.
1. Richmond National Battlefield Park
Richmond is steeped in American Civil War history, having once served as the capital of the Confederacy. The city’s landscape is dotted with battlefields, museums, and monuments that tell the complex story of one of America’s most turbulent times. Places like the American Civil War Museum and the Richmond National Battlefield Park provide insightful perspectives into the war’s impact on the nation and the city. Richmond’s dedication to preserving its history allows visitors and residents alike to step back in time and understand the significant role the city played in shaping the country we live in today.
2. The Virginia State Capitol
Designed by Thomas Jefferson, the Virginia State Capitol is a monumental symbol of American architectural and political history. Standing regally in the heart of Richmond, this iconic building not only serves as the seat of the state’s government but also as a testament to the enduring principles of democracy. Guided tours offer a glimpse into Virginia’s legislative process and the building’s remarkable design, making it a must-visit for anyone interested in the interplay between architecture and American history.
3. James River
The James River is the lifeblood of Richmond, offering a natural escape amid the city’s hustle and bustle. It’s a haven for outdoorsy types, with activities ranging from whitewater rafting and kayaking to tranquil walks along the scenic riverside trails. The James River Park System provides countless opportunities for adventure and relaxation, highlighting the city’s commitment to preserving its natural beauty while fostering a strong community connection to the outdoors.
4. Growing craft beer scene
Richmond is known for its craft beer revolution, with numerous breweries, notably The Answer Brewpub and Hardywood Park Craft Brewery, offering locally brewed selections. Food festivals and farmer’s markets add to the city’s foodie appeal, making it a destination for those who love to explore flavors and foods.
5. Virginia Museum of Fine Arts
Richmond’s arts scene is second to none, with a thriving community of artists, musicians and performers. The Virginia Museum of Fine Arts (VMFA) stands out as a beacon of cultural enrichment, showcasing an extensive collection that spans the globe and centuries.
6. The Fan and Church Hill
Richmond’s historic architecture is a visual journey through the city’s past, from colonial times to the present day. Neighborhoods like The Fan and Church Hill boast picturesque streets lined with beautifully preserved homes, offering a glimpse into the city’s architectural evolution. This blend of historical and contemporary architecture underscores Richmond’s respect for its past while embracing modern development.
7. Mymont Park and Belle Isle
In addition to the James River Park System, Richmond hosts a ton of outdoor recreation options. The city’s parks, like Maymont and Belle Isle, provide a peaceful respite from city life, with beautiful gardens, hiking trails and wildlife exhibits.
8. Richmond Folk Festival and more
Richmond is a city that loves to celebrate, hosting a ton of festivals and events throughout the year. From the Richmond Folk Festival to the Richmond International Film Festival, these gatherings showcase the city’s diverse talents and community spirit. Seasonal events, like the Dominion Energy Christmas Parade and the Monument Avenue 10k, bring residents together to celebrate the city’s culture and traditions.
9. VCU and University of Richmond
Home to renowned institutions like Virginia Commonwealth University (VCU) and the University of Richmond, the city is a hub for education and innovation. These universities not only provide top-tier education but also contribute to the city’s culture and economy. Research initiatives, startup incubators and collaborative projects between the universities and local businesses underscore Richmond’s role as a center for innovation and growth in the Southeast.
10. Richmond’s riverfront
The revitalization of Richmond’s riverfront has transformed the city’s relationship with the James River, making it a focal point for leisure and entertainment. T. Tyler Potterfield Memorial Bridge, part of the Virginia Capital Trail, offers stunning views of the river and connects several of Richmond’s most walkable districts, promoting a sense of community and accessibility.
Images by GettyImages; Illustration by Hunter Newton/Bankrate
More than half of aspiring homeowners say living costs are too high or their incomes are too low to squeeze a down payment and closing costs into their budgets, according to Bankrate’s new Down Payment Survey.
Reflecting the bout of inflation that swept through the economy in 2022 and 2023, fully 51 percent of would-be homeowners say the cost of living poses an obstacle to their home-buying plans. Meanwhile, 54 percent of Americans say their incomes haven’t kept pace with home prices that are flirting with record levels.
“With so many aspiring homeowners saying they’re not making enough money to afford a down payment, the job market has been more resilient, the economy more robust than many experts expected,” says Mark Hamrick, Bankrate’s chief economic analyst. “That strength can still be leveraged.”
Bankrate’s key takeaways
Myriad financial challenges vex would-be buyers. In addition to the high cost of living and low income, aspiring homeowners cited these barriers to homeownership: credit card debt (18 percent); friends or family not being able to provide financial assistance (15 percent); and student loan debt (10 percent).
Saving up could take a long time. Fully 20 percent of aspiring homeowners think they will never be able to save enough to purchase a home. Just 7 percent say they’ll be ready in less than a year.
Successful buyers were intentional about achieving their goal. More than four in 10 current homeowners (41 percent) saved specifically for the down payment and closing costs on their first homes, and 14 percent got down payment assistance or a first-time buyer grant.
Americans’ housing outlook is growing less gloomy. Overall, 42 percent believe now is a bad time to buy a home, a decrease from 49 percent in September 2023.
Many say high living costs, constrained incomes pose challenges
More than half of aspiring homeowners say the current cost of living is too high or their income is not high enough for them to afford a down payment and closing costs for a home (51 percent and 54 percent, respectively).
In addition to the high cost of living and low income, aspiring homeowners cited credit card debt (18 percent), friends or family not being able to provide financial assistance (15 percent) and student loan debt (10 percent) as barriers to homeownership, while 8 percent cited some other reason. Just 13 percent of aspiring homeowners said nothing is holding them back.
Younger aspiring homeowners are more likely to point to a lack of financial assistance from friends or family as obstacles to homeownership compared to older generations, while millennials are most likely to point to both credit card and student loan debt.
Aspiring homeowners not hopeful they’ll be able to afford to buy in near future
Fully 20 percent of aspiring homeowners think they will never be able to save enough to purchase a home. Older generations (36 percent of baby boomers and 28 percent of Gen Xers) are more likely to believe they will never be able to save enough to buy a home, compared to 18 percent of millennials and 10 percent of Gen Zers.
Nearly one-third of aspiring homeowners (30 percent) say it will take at least five years or longer to save enough money for a home, while 10 percent say it will take a decade or more.
Americans more optimistic about housing market
Overall, 42 percent believe now is a bad time to buy a home, a decrease from 49 percent in a September 2023 Bankrate survey.
Among other housing market headwinds, nearly two in five (39 percent) say they think mortgage rates will remain elevated for the foreseeable future, while 38 percent say a buyer needs excellent credit to get a mortgage and 17 percent say that renting is cheaper than buying a home.
Current homeowners got there through intentional savings
When asked how they came up with the cash for their first homes, 41 percent of current homeowners saved specifically for that purpose, 14 percent received a gift from family or friends and another 14 percent used a first-time homebuyers grant or loan assistance program. Nine percent received a loan from family or friends, while another 9 percent took money out of retirement savings. Fewer homeowners found additional income streams (8 percent) or sold some personal items such as jewelry, electronics or cars (7 percent).
3 ways to save for a down payment
Leverage a savings account. Although mortgage rates have increased, the rates on savings accounts have gone up, too. Look into high-yield or money market accounts, or even a certificate of deposit, to take advantage of these returns.
Don’t sweat 20 percent. While 20 percent is an ideal amount to put down, the reality is that the typical home price nationally is close to $400,000, and most first-time buyers don’t have $80,000 to devote to the down payment. The good news is that there are plenty of loans available for borrowers with as little as 3 percent to 3.5 percent for the down payment.
Tap into first-time buyer programs. Nearly every state in the country has a program to help first-time buyers become homeowners. These programs typically feature some sort of down payment assistance.
FAQ
Because of the combination of high home prices and still-high mortgage rates, fewer Americans than usual are buying homes. Don’t wait too long, though: If mortgage rates decline significantly in 2024, that shift would lure more buyers into the market, creating more competition and upward pressure on home prices.
No. While the best mortgage offers are available to borrowers with credit scores of 740 or higher, that’s not a requirement. Mortgages are available to borrowers with credit scores as low as 580, although those loans typically carry higher costs.
The current consensus is that mortgage rates will fall to 6 percent or below by the end of 2024. A lot can happen between now and then, however — much depends on the direction of the economy and when the Federal Reserve decides to cut interest rates.
Bankrate commissioned YouGov Plc to conduct the survey. All figures, unless otherwise stated, are from YouGov Plc. The total sample size was 2,267 U.S. adults, of which 864 are aspiring/prospective homeowners. Fieldwork was undertaken between Jan. 24-26, 2024. The survey was carried out online and meets rigorous quality standards. It employed a non-probability-based sample using both quotas upfront during collection and then a weighting scheme on the back end designed and proven to provide nationally representative results. For this survey, Bankrate defined aspiring/prospective homeowners as those who have owned a home in the past but currently do not, and those who have never owned a home in the past but hope to someday.
To answer whether a $40,000 salary is good, you need to consider your perspective. For a recent grad in a small town where the cost of living is low, that might be an annual income that pays the bills. But a $40,000 salary is not typically enough for a household to live comfortably in most parts of the United States. To put it another way, a single person can live more comfortably on a $40,000 salary, but a family — with or without children — may find it more difficult.
Rising inflation has made it more challenging to get by on $40,000 in 2022, but this salary is still far above the United States Census Bureau’s poverty threshold for families of up to six people. The $40,000 figure represents earning more than the federal minimum wage ($7.25/hour).
So is $40,000 a good salary? Well, it depends.
Key Points
• A $40,000 salary may be sufficient for an individual in a low-cost area, but it may not be enough for a family to live comfortably in most parts of the US.
• Rising inflation has made it more challenging to live on a $40,000 salary, but it still exceeds the poverty threshold for families.
• Compared to the median household income in the US, a $40,000 salary falls short, but it can contribute to the median household income when combined with a second income.
• A $40,000 salary translates to a monthly income of $3,333.33, a biweekly paycheck of $1,538.46, and a weekly income of $769.23.
• Living on a $40,000 budget requires careful expense tracking, budgeting, debt management, and saving strategies. Location plays a significant role in how far the salary can stretch.
How Does a $40,000 Salary Compare to the American Median Income?
Here’s a look at how earning a $40,000 annual income compares to that of your fellow Americans.
• According to the U.S. Census Bureau, the median household income in 2020 (when data was gathered) just surpassed $67,500.
• More recently, the Bureau of Labor Statistics determined that the median weekly income of a full-time worker (salary or hourly) was $1,037, or nearly $54,000 a year.
While a $40,000 salary falls short of recent BLS definitions of the median personal income, it could successfully contribute to the Census Bureau’s picture of the median household income, when combined with a second income from a domestic partner.
Could this salary be considered good? Consider the following:
• As an individual, you may find that $40,000 is a good entry-level salary.
• Couples living the DINK lifestyle (which stands for dual income, no kids) and who each make $40,000 would be well above the median household income. Plus, they would have the additional costs of raising children as part of their budget.
$40,000 Salary Breakdown
It can be helpful to know what a $40,000 salary translates to as a monthly budget, weekly paycheck, or even hourly rate. This may help you compare career options and budget wisely, not to mention answer that question, “Is $40K a good salary?”
Here’s how it breaks down:
• Monthly income: $3,333.33
• Biweekly paycheck: $1,538.46
• Weekly income: $769.23
• Daily income: $153.85*
• Hourly income: $19.23**
*Based on 260 working days a year **Based on 2,080 working hours a year
And remember: That’s before taxes. If you are single and make $40,000 a year, your federal tax bracket is at 12%, but you may also owe state, city, and even school district taxes as well. It’s important to keep that in mind as you plan and assess how to pay bills and save with this salary.
Recommended: What to Do When You Get a Pay Raise: 12 Tips
Can You Live Individually on a $40,000 Income?
It is possible to live individually on a $40,000 income. In fact, you may be able to afford the average monthly expenses for a single person and work on your saving and investing goals.
Your location will have the largest impact on how far your dollars will stretch. Areas with a lower cost of living will likely be easier to afford for an individual on a $40,000 income.
As an individual, you can help your salary go further by looking for ways to save money, like:
• Having a roommate or renting out a room in your house if you own one
• Cooking at home instead of eating out
• Buying a used car or, depending on where you live, relying on public transportation
• Finding a higher-yield savings account, ideally over 1.00% APY
Get up to $300 when you bank with SoFi.
Open a SoFi Checking and Savings Account with direct deposit and get up to a $300 cash bonus. Plus, get up to 4.60% APY on your cash!
Best Places to Live on a $40,000 Salary
If you can afford moving expenses and aren’t tied to a specific location for work, you can make your dollars go further more easily in certain locations in the United States. These are places with a lower cost of living. Here are the five cheapest cities to live in the U.S. this year, according to U.S. News:
• Hickory, North Carolina
• Green Bay, Wisconsin
• Huntsville, Alabama
• Quad Cities (Davenport-Bettendorf, Iowa and Moline-Rock Island, Illinois)
• Fort Wayne, Indiana
However, there’s more to moving than just the expenses and the job. Before packing up a rental truck, consider whether you are comfortable leaving behind friends, family, and familiar places.
Recommended: Financial Moves to Make During a Job Transition
Worst Places to Live on a $40,000 Salary
A $40,000 salary might not go far enough in a city with a high cost of living. U.S. News research indicates these are the most expensive cities to live in:
• Los Angeles, California
• Miami, Florida
• San Diego, California
• Salinas, California
• Santa Barbara, California
And if you were expecting to see New York City on this list, don’t worry: It’s not far behind, at number nine.
Tips for Living on a $40,000 Budget
So how can you (and possibly your family) live on a $40,000 budget? It’s important to cut costs, look for deals, pay down your debt, and build up savings for an emergency.
But living on a small salary doesn’t mean you have to completely give up entertainment. Remember that it’s OK to treat yourself to the nice things in life from time to time, as long as they are within reason. Everyone needs some fun in their life.
Here are some important tips for living on a $40,000 budget:
Carefully Tracking Your Expenses
First things first, get an understanding of your current spending habits. Your bank may offer tools that make this easy to analyze or you can download apps or check websites that make this easier.
Consider what bills you have every month, whether they are on auto pay, and, if so, when do they process? (This will help you schedule your bills and avoid getting hit with late fees.) Make a list of all your recurring expenses (mortgage or rent, student loans, car payment, phone, insurance, and utilities), and then analyze how much on average you’re spending on more variable expenses like groceries, gas, clothing, and entertainment.
What can you cut? What bills can you negotiate down? Where can you reallocate money toward savings?
Now that you have an idea of what you’re currently spending, it’s time to design a budget around what you should be spending.
Start by plugging in necessary monthly expenses; these are things you must pay for each month, like your home, insurance, and food. Only once you can see that these basic needs are met should you begin to budget for things like dining out or new clothes, also known as wants vs. needs.
Not sure where to start? Do some online research on how to make a budget. There are different techniques including a line item budget and the 50/30/20 budget rule.
Getting Out of Debt
As you consider how to manage daily life on a $40,000 salary, it’s wise to pay attention to the role that debt plays in your personal finances. Mortgage and student loan debt are structured to be paid off over decades, and can be considered by some to be good debt, as the interest rates are often relatively low and timely payments build your credit history. The rates on credit card debt, however, can be high (currently over 20% on new offers and 16% on existing accounts) and therefore more detrimental to your finances (and mental health). If you have serious credit card debt, it is wise to cut back expenses as much as you can so you can focus on paying off your debt.
You can tackle your debt using the snowball method or the avalanche method. You may also consider a balance-transfer credit card or a debt consolidation program, depending on your situation. A debt counselor who works for a nonprofit, like the National Foundation for Credit Counseling (NFCC ), can be helpful as well.
Saving Your Money
If you are debt-free (house, car, and student loan payments aside) and still have wiggle room in your budget after accounting for necessary expenses and a little bit of fun money, you can allocate some of your $40,000 salary toward your saving goals. These might include vacations, a house down payment, renovations, or a wedding. An emergency savings fund is often a good place to start.
Recommended: How to Save Money from Your Salary
Investing Your Money
After you have gotten a handle on your expenses, designed a budget, and opened a savings account, you might consider if there is enough leftover from your $40,000 salary for investing. This may not be possible if you live in a city or state with a high cost of living.
How can you start investing? If your employer offers a 401(k) match, consider taking advantage of that. It’s basically free money, so contribute enough to snag it.
You can also look for automated investing opportunities so you don’t have to worry about building a portfolio from scratch.
Managing Finances With SoFi
If your $40,000 salary is paid via direct deposit, think about opening a high interest online savings account. With direct deposit, you can get an array of perks from our SoFi Checking and Savings account. You’ll spend and save in one convenient place, plus you’ll earn a competitive APY and pay no fees, which can help your money grow faster. What’s more, qualifying accounts can get paycheck access up to two days early.
Make the most of your money with SoFi.
FAQ
Can you live comfortably on $40,000 a year?
Individuals can often live comfortably on $40,000 a year. Families, however, may struggle with this salary, especially in areas with a higher cost of living.
What can I afford making $40K a year?
If you are an individual living on $40,000 a year in an area with a low to moderate cost of living, you can afford typical monthly expenses like food, housing, and utilities and still have enough for some fun expenditures, like entertainment. If you are frugal and build a budget, you may also be able to pay down debt, build your savings, and even invest a little.
Is $40,000 a year considered middle class?
According to Pew Research, a middle-class family of three makes between $56,000 and $156,000. Families of that size who bring in $40,000 a year would not be considered middle class. However, an individual making $40,000 a year would likely qualify as middle class.
Photo credit: iStock/Prostock-Studio
Third-Party Brand Mentions: No brands, products, or companies mentioned are affiliated with SoFi, nor do they endorse or sponsor this article. Third-party trademarks referenced herein are property of their respective owners.
Financial Tips & Strategies: The tips provided on this website are of a general nature and do not take into account your specific objectives, financial situation, and needs. You should always consider their appropriateness given your own circumstances.
The SoFi Bank Debit Mastercard® is issued by SoFi Bank, N.A., pursuant to license by Mastercard International Incorporated and can be used everywhere Mastercard is accepted. Mastercard is a registered trademark, and the circles design is a trademark of Mastercard International Incorporated.
SoFi members with direct deposit activity can earn 4.60% annual percentage yield (APY) on savings balances (including Vaults) and 0.50% APY on checking balances. Direct Deposit means a deposit to an account holder’s SoFi Checking or Savings account, including payroll, pension, or government payments (e.g., Social Security), made by the account holder’s employer, payroll or benefits provider or government agency (“Direct Deposit”) via the Automated Clearing House (“ACH”) Network during a 30-day Evaluation Period (as defined below). Deposits that are not from an employer or government agency, including but not limited to check deposits, peer-to-peer transfers (e.g., transfers from PayPal, Venmo, etc.), merchant transactions (e.g., transactions from PayPal, Stripe, Square, etc.), and bank ACH funds transfers and wire transfers from external accounts, do not constitute Direct Deposit activity. There is no minimum Direct Deposit amount required to qualify for the stated interest rate.
SoFi members with Qualifying Deposits can earn 4.60% APY on savings balances (including Vaults) and 0.50% APY on checking balances. Qualifying Deposits means one or more deposits that, in the aggregate, are equal to or greater than $5,000 to an account holder’s SoFi Checking and Savings account (“Qualifying Deposits”) during a 30-day Evaluation Period (as defined below). Qualifying Deposits only include those deposits from the following eligible sources: (i) ACH transfers, (ii) inbound wire transfers, (iii) peer-to-peer transfers (i.e., external transfers from PayPal, Venmo, etc. and internal peer-to-peer transfers from a SoFi account belonging to another account holder), (iv) check deposits, (v) instant funding to your SoFi Bank Debit Card, (vi) push payments to your SoFi Bank Debit Card, and (vii) cash deposits. Qualifying Deposits do not include: (i) transfers between an account holder’s Checking account, Savings account, and/or Vaults; (ii) interest payments; (iii) bonuses issued by SoFi Bank or its affiliates; or (iv) credits, reversals, and refunds from SoFi Bank, N.A. (“SoFi Bank”) or from a merchant.
SoFi Bank shall, in its sole discretion, assess each account holder’s Direct Deposit activity and Qualifying Deposits throughout each 30-Day Evaluation Period to determine the applicability of rates and may request additional documentation for verification of eligibility. The 30-Day Evaluation Period refers to the “Start Date” and “End Date” set forth on the APY Details page of your account, which comprises a period of 30 calendar days (the “30-Day Evaluation Period”). You can access the APY Details page at any time by logging into your SoFi account on the SoFi mobile app or SoFi website and selecting either (i) Banking > Savings > Current APY or (ii) Banking > Checking > Current APY. Upon receiving a Direct Deposit or $5,000 in Qualifying Deposits to your account, you will begin earning 4.60% APY on savings balances (including Vaults) and 0.50% on checking balances on or before the following calendar day. You will continue to earn these APYs for (i) the remainder of the current 30-Day Evaluation Period and through the end of the subsequent 30-Day Evaluation Period and (ii) any following 30-day Evaluation Periods during which SoFi Bank determines you to have Direct Deposit activity or $5,000 in Qualifying Deposits without interruption.
SoFi Bank reserves the right to grant a grace period to account holders following a change in Direct Deposit activity or Qualifying Deposits activity before adjusting rates. If SoFi Bank grants you a grace period, the dates for such grace period will be reflected on the APY Details page of your account. If SoFi Bank determines that you did not have Direct Deposit activity or $5,000 in Qualifying Deposits during the current 30-day Evaluation Period and, if applicable, the grace period, then you will begin earning the rates earned by account holders without either Direct Deposit or Qualifying Deposits until you have Direct Deposit activity or $5,000 in Qualifying Deposits in a subsequent 30-Day Evaluation Period. For the avoidance of doubt, an account holder with both Direct Deposit activity and Qualifying Deposits will earn the rates earned by account holders with Direct Deposit.
Members without either Direct Deposit activity or Qualifying Deposits, as determined by SoFi Bank, during a 30-Day Evaluation Period and, if applicable, the grace period, will earn 1.20% APY on savings balances (including Vaults) and 0.50% APY on checking balances.
Interest rates are variable and subject to change at any time. These rates are current as of 10/24/2023. There is no minimum balance requirement. Additional information can be found at https://www.sofi.com/legal/banking-rate-sheet.
External Websites: The information and analysis provided through hyperlinks to third-party websites, while believed to be accurate, cannot be guaranteed by SoFi. Links are provided for informational purposes and should not be viewed as an endorsement.
The VA home loan: Unbeatable benefits for veterans
For many who qualify, VA home loans are some of the best mortgages available.
Verify your VA loan eligibility. Start here
Backed by the U.S. Department of Veterans Affairs, VA loans are designed to help active-duty military personnel, veterans and certain other groups become homeowners at an affordable cost.
The VA loan asks for no down payment, requires no mortgage insurance, and has lenient rules about qualifying, among many other advantages.
Here’s everything you need to know about qualifying for and using a VA loan.
In this article (Skip to…)
Top 10 VA loan benefits
1. No down payment on a VA loan
Most home loan programs require you to make at least a small down payment to buy a home. The VA home loan is an exception.
Verify your VA loan eligibility. Start here
Rather than paying 5%, 10%, 20% or more of the home’s purchase price upfront in cash, with a VA loan you can finance up to 100% of the purchase price.
The VA loan is a true no-money-down home mortgage opportunity.
2. No mortgage insurance for VA loans
Typically, lenders require you to pay for mortgage insurance if you make a down payment that’s less than 20%.
This insurance — which is known as private mortgage insurance (PMI) for a conventional loan and a mortgage insurance premium (MIP) for an FHA loan — would protect the lender if you defaulted on your loan.
VA loans require neither a down payment nor mortgage insurance. That makes a VA-backed mortgage very affordable upfront and over time.
3. VA loans have a government guarantee
There’s a reason why the VA loan comes with such favorable terms.
The federal government guarantees these loans — meaning a portion of the loan amount will be repaid to the lender even if you’re unable to make monthly payments for whatever reason.
This guarantee encourages and enables private lenders to offer VA loans with exceptionally attractive terms.
4. You can shop for the best VA loan rates
VA loans are neither originated nor funded by the VA. They are not direct loans from the government. Furthermore, mortgage rates for VA loans are not set by the VA itself.
Instead, VA loans are offered by U.S. banks, savings-and-loans institutions, credit unions, and mortgage lenders — each of which sets its own VA loan rates and fees.
This means you can shop around and compare loan offers and still choose the VA loan that works best for your budget.
5. VA loans don’t allow a prepayment penalty
A VA loan won’t restrict your right to sell the property partway through your loan term.
There’s no prepayment penalty or early-exit fee no matter within what time frame you decide to sell your home.
Furthermore, there are no restrictions regarding a refinance of your VA loan.
You can refinance your existing VA loan into another VA loan via the agency’s Interest Rate Reduction Refinance Loan (IRRRL) program, or switch into a non-VA loan at any time.
6. VA mortgages come in many varieties
A VA loan can have a fixed rate or an adjustable rate. In addition, you can use a VA loan to buy a house, condo, new-built home, manufactured home, duplex, or other types of properties.
Or, it can be used for refinancing your existing mortgage, making repairs or improvements to your home, or making your home more energy-efficient.
The choice is yours. A VA-approved lender can help you decide.
Verify your VA loan eligibility. Start here
7. It’s easier to qualify for VA loans
Like all mortgage types, VA loans require specific documentation, an acceptable credit history, and sufficient income to make your monthly payments.
But, compared to other loan programs, VA loan guidelines tend to be more flexible. This is made possible because of the VA loan guarantee.
The Department of Veterans Affairs genuinely wants to make the loan process easier for military members, veterans, and qualifying military spouses to buy or refinance a home.
8. VA loan closing costs are lower
The VA limits the closing costs lenders can charge to VA loan applicants. This is another way that a VA loan can be more affordable than other types of loans.
Money saved on closing costs can be used for furniture, moving costs, home improvements, or anything else.
9. The VA offers funding fee flexibility
VA loans require a “funding fee,” an upfront cost based on your loan amount, your type of eligible service, your down payment size, and other factors.
Funding fees don’t need to be paid in cash, though. The VA allows the fee to be financed with the loan, so nothing is due at closing.
And, not all VA borrowers will pay it. VA funding fees are normally waived for veterans who receive VA disability compensation and for unmarried surviving spouses of veterans who died in service or as a result of a service-connected disability.
10. VA loans are assumable
Most VA loans are “assumable,” which means you can transfer your VA loan to a future home buyer if that person is also VA-eligible.
Assumable loans can be a huge benefit when you sell your home — especially in a rising mortgage rate environment.
If your home loan has today’s low rate and market rates rise in the future, the assumption features of your VA become even more valuable.
VA loan rates
The VA loan is viewed as one of the lowest-risk mortgage types available on the market.
Verify your VA loan eligibility. Start here
This safety allows banks to lend to veteran borrowers at lower interest rates.
Today’s VA loan rates*
Loan Type
Current Mortgage Rate
VA 30-year FRM
% (% APR)
Conventional 30-year FRM
% (% APR)
VA 15-year FRM
% (% APR)
Conventional 15-year FRM
% (% APR)
*Current rates provided daily by partners of the Mortgage Reports. See our loan assumptions here.
VA rates are more than 25 basis points (0.25%) lower than conventional rates on average, according to data collected by mortgage software company Ellie Mae.
Most loan programs require higher down payment and credit scores than the VA home loan. In the open market, a VA loan should carry a higher rate due to more lenient lending guidelines and higher perceived risk.
Yet the result of the Veterans Affairs efforts to keep veterans in their homes means lower risk for banks and lower borrowing costs for eligible veterans.
VA mortgage calculator
Eligibility
Am I eligible for a VA home loan?
Contrary to popular belief, VA loans are available not only to veterans, but also to other classes of military members.
Find and lock a low VA loan rate today. Start here
The list of eligible VA borrowers includes:
Active-duty service members
Members of the National Guard
Reservists
Surviving spouses of veterans
Cadets at the U.S. Military, Air Force or Coast Guard Academy
Midshipmen at the U.S. Naval Academy
Officers at the National Oceanic & Atmospheric Administration.
A minimum term of service is typically required.
Minimum service required for a VA mortgage
VA home loans are available to active-duty service members, veterans (unless dishonorably discharged), and in some cases, surviving family members.
To be eligible, you need to meet one of these service requirements:
You’ve served 181 days of active duty during peacetime
You’ve served 90 days of active duty during wartime
You’ve served six years in the Reserves or National Guard
Your spouse was killed in the line of duty and you have not remarried
Your eligibility for the VA home loan program never expires.
Veterans who earned their VA entitlement long ago are still using their benefit to buy homes.
The VA loan Certificate of Eligibility (COE)
What is a COE?
In order to show a mortgage company you are VA-eligible, you’ll need a Certificate of Eligibility (COE). Your lender can acquire one for you online, usually in a matter of seconds.
Verify your VA home loan eligibility. Start here
How to get your COE (Certificate of Eligibility)
Getting a Certificate of Eligibility (COE) is very easy in most cases. Simply have your lender order the COE through the VA’s automated system. Any VA-approved lender can do this.
Alternatively, you can order your certificate yourself through the VA benefits portal.
If the online system is unable to issue your COE, you’ll need to provide your DD-214 form to your lender or the VA.
Does a COE mean you are guaranteed a VA loan?
No, having a Certificate of Eligibility (COE) doesn’t guarantee a VA loan approval.
Your COE shows the lender you’re eligible for a VA loan, but no one is guaranteed VA loan approval.
You must still qualify for the loan based on VA mortgage guidelines. The guarantee part of the VA loan refers to the VA’s promise to the lender of repayment if the borrower defaults.
Qualifying for a VA mortgage
VA loan eligibility vs. qualification
Being eligible for VA home loan benefits based on your military status or affiliation doesn’t necessarily mean you’ll qualify for a VA loan.
You still have to qualify for a VA mortgage based on your credit, debt, and income.
Verify your VA loan eligibility. Start here
Minimum credit score for a VA loan
The VA has established no minimum credit score for a VA mortgage.
However, many VA mortgage lenders require minimum FICO scores of 620 or higher — so apply with many lenders if your credit score might be an issue.
Even VA lenders that allow lower credit scores don’t accept subprime credit.
VA underwriting guidelines state that applicants must have paid their obligations on time for at least the most recent 12 months to be considered satisfactory credit risks.
In addition, the VA usually requires a two-year waiting period following a Chapter 7 bankruptcy or foreclosure before it will insure a loan.
Borrowers in Chapter 13 must have made at least 12 on-time payments and secure the approval of the bankruptcy court.
Verify your VA loan home buying eligibility. Start here
VA loan debt-to-income ratios
The relationship of your debts and your income is called your debt-to-income ratio, or DTI.
VA underwriters divide your monthly debts (car payments, credit cards, and other accounts, plus your proposed housing expense) by your gross (before-tax) income to come up with your debt-to-income ratio.
For instance:
If your gross income is $4,000 per month
And your total monthly debt is $1,500 (including the new mortgage, property taxes and homeowners insurance, plus other debt payments)
Then your DTI is 37.5% (1500/4000=0.375)
A DTI over 41% means the lender has to apply additional formulas to see if you qualify under residual income guidelines.
VA residual income rules
VA underwriters perform additional calculations that can affect your mortgage approval.
Factoring in your estimated monthly utilities, your estimated taxes on income, and the area of the country in which you live, the VA arrives at a figure which represents your “true” costs of living.
It then subtracts that figure from your income to find your residual income (e.g. your money “left over” each month).
Think of the residual income calculation as a real-world simulation of your living expenses.
It is the VA’s best effort to ensure that military families have a stress-free homeownership experience.
Here is an example of how residual income works, assuming a family of four which is purchasing a 2,000 square-foot home on a $5,000 monthly income.
Future house payment, plus other debt payments: $2,500
Monthly estimated income taxes: $1,000
Monthly estimated utilities at $0.14 per square foot: $280
This leaves a residual income calculation of $1,220.
Now, compare that residual income to for a family of four:
Northeast Region: $1,025
Midwest Region: $1,003
South Region: $1,003
West Region: $1,117
The borrower in our example exceeds VA’s residual income standards in all parts of the country.
Therefore, despite the borrower’s debt-to-income ratio of 50%, the borrower could get approved for a VA loan.
Verify your VA loan eligibility. Start here
Qualifying for a VA loan with part-time income
You can qualify for this type of financing even if you have a part-time job or multiple jobs.
You must show a 2-year history of making consistent part-time income, and stability in the number of hours worked. The lender will make sure any income received appears stable. See our complete guide to getting a mortgage when you’re self-employed or work part-time.
VA funding fees and loan limits
About the VA funding fee
The VA charges an upfront fee to defray the costs of the program and make it sustainable for the future.
Veterans pay a lump sum that varies depending on the loan purpose and down payment amount.
The fee is normally wrapped into the loan. It does not add to the cash needed to close the loan.
Find out if you qualify for a VA loan. Start here
VA home purchase funding fees
Type of Military Service
Down Payment
Fee for First-Time Use
Fee for Subsequent Use
Active Duty, Reserves, and National Guard
None
2.3%
3.6%
5% or more
1.65%
1.65%
10% or more
1.4%
1.4%
VA cash-out refinance funding fees
Type of Military Service
Fee for First-Time Use
Fee for Subsequent Uses
Active Duty, Reserves, and National Guard
2.3%
3.6%
VA streamline refinances (IRRRL) & assumptions
Type of Military Service
Fee for First-Time Use
Fee for Subsequent Uses
Active Duty, Reserves, and National Guard
0.5%
0.5%
Manufactured home loans not permanently affixed
Type of Military Service
Fee for First-Time Use
Fee for Subsequent Uses
Active Duty, Reserves, and National Guard
1.0%
1.0%
VA loan limits in 2024
VA loan limits have been repealed, thanks to the Blue Water Navy Vietnam Veterans Act of 2019.
There is no maximum amount for which a home buyer can receive a VA loan, at least as far as the VA is concerned.
However, private lenders may set their own limits. So check with your lender if you are looking for a VA loan above local conforming loan limits.
Verify your VA loan eligibility. Start here
Eligible property types
Houses you can buy with a VA loan
VA mortgages are flexible about what types of property you can and can’t purchase. A VA loan can be used to buy a:
Detached house
Condo
New-built home
Manufactured home
Duplex, triplex or four-unit property
Find out if you qualify for a VA loan. Start here
You can also use a VA mortgage to refinance an existing loan for any of those types of properties.
VA loans and second homes
Federal regulations limit loans guaranteed by the Department of Veterans Affairs to “primary residences” only.
However, “primary residence” is defined as the home in which you live “most of the year.”
Therefore, if you own an out-of-state residence in which you live for more than six months of the year, this other home, whether it’s your vacation home or retirement property, becomes your official “primary residence.”
For this reason, VA loans are popular among aging military borrowers.
Buying a multi-unit home with a VA loan
VA loans allow you to buy a duplex, triplex, or four-plex with 100% financing. You must live in one of the units.
Buying a home with more than one unit can be challenging.
Mortgage lenders consider these properties riskier to finance than traditional, single-family residences, so you’ll need to be a stronger borrower.
VA underwriters must make sure you will have enough emergency savings, or cash reserves, after closing on your house. That’s to ensure you’ll have money to pay your mortgage even if a tenant fails to pay rent or moves out.
The minimum cash reserves needed after closing is six months of mortgage payments (covering principal, interest, taxes, and insurance – PITI).
Your lender will also want to know about previous landlord experience you’ve had, or any experience with property maintenance or renting.
If you don’t have any, you may be able to sidestep that issue by hiring a property management company. But that’s up to the individual lender.
Your lender will look at the income (or potential income) of the rental units, using either existing rental agreements or an appraiser’s opinion of what the units should fetch.
They’ll usually take 75% of that amount to offset your mortgage payment when calculating your monthly expenses.
VA loans and rental properties
You cannot use a VA loan to buy a rental property. You can, however, use a VA loan to refinance an existing rental home you once occupied as a primary home.
For home purchases, in order to obtain a VA loan, you must certify that you intend to occupy the home as your principal residence.
If the property is a duplex, triplex, or four-unit apartment building, you must occupy one of the units yourself. Then you can rent out the other units.
The exception to this rule is the VA’s Interest Rate Reduction Refinance Loan (IRRRL).
This loan, also known as the VA Streamline Refinance, can be used for refinancing an existing VA loan on a home where you currently live or where you used to live, but no longer do.
Check your VA IRRRL eligibility. Start here
Buying a condo with a VA loan
The VA maintains a list of approved condo projects within which you may purchase a unit with a VA loan.
At VA’s website, you can search for the thousands of approved condominium complexes across the U.S.
If you are VA-eligible and in the market for a condo, make sure the unit you’re interested in is approved.
As a buyer, you are probably not able to get the complex VA-approved. That’s up to the management company or homeowner’s association.
If a condo you like is not approved, you must use other financing like an FHA or conventional loan or find another property.
Note that the condo must meet FHA or conventional guidelines if you want to use those types of financing.
Veteran mortgage relief with the VA loan
The U.S. Department of Veterans Affairs, or VA, provides home retention assistance. The VA intervenes when a veteran is having trouble making home loan payments.
The VA works with loan servicers to offer loan options to the veteran, other than foreclosure.
Find out if you qualify for a VA loan. Start here
In fiscal year 2019, the VA made over 400,000 contact actions to reach borrowers and loan servicers. The intent was to work out a mutually agreeable repayment option for both parties.
More than 100,000 veteran homeowners avoided foreclosure in 2019 alone thanks to this effort.
The initiative has saved the taxpayer an estimated $2.6 billion. More importantly, vast numbers of veterans and military families got another chance at homeownership.
When NOT to use a VA loan
If you have good credit and 20% down
A primary advantage to VA home loans is the lack of mortgage insurance.
However, the VA guarantee does not come free of charge. Borrowers pay an upfront funding fee, which they usually choose to add to their loan amount.
The fee ranges from 1.4% to 3.6%, depending on the down payment percentage and whether the home buyer has previously used his or her VA mortgage eligibility. The most common fee is 2.3%.
Find out if you qualify for a VA loan. Start here
On a $200,000 purchase, a 2.3% fee equals $4,600.
However, buyers who choose a conventional mortgage and put 20% down get to avoid mortgage insurance and the upfront fee. For these military home buyers, the VA funding fee might be an unnecessary expense.
The exception: Mortgage applicants whose credit rating or income meets VA guidelines but not those of conventional mortgages may still opt for VA.
If you’re on the “CAIVRS” list
To qualify for a VA loan, you must prove you have made good on previous government-backed debts and that you have paid taxes.
The Credit Alert Verification Reporting System, or “CAIVRS,” is a database of consumers who have defaulted on government obligations. These individuals are not eligible for the VA home loan program.
If you have a non-veteran co-borrower
Veterans often apply to buy a home with a non-veteran who is not their spouse.
This is okay. However, it might not be their best choice.
As the veteran, your income must cover your half of the loan payment. The non-veteran’s income cannot be used to compensate for the veteran’s insufficient income.
Plus, when a non-veteran owns half the loan, the VA guarantees only half that amount. The lender will require a 12.5% down payment for the non-guaranteed portion.
The Conventional 97 mortgage, on the other hand, allows down payments as low as 3%.
Another low-down-payment mortgage option is the FHA home loan, for which 3.5% down is acceptable.
The USDA home loan also requires zero down payment and offers similar rates to VA loans. However, the property must be within USDA-eligible areas.
If you plan to borrow with a non-veteran, one of these loan types might be your better choice.
Explore your mortgage options. Start here
If you apply with a credit-challenged spouse
In states with community property laws, VA lenders must consider the credit rating and financial obligations of your spouse. This rule applies even if he or she will not be on the home’s title or even on the mortgage.
Such states are as follows.
Arizona
California
Idaho
Louisiana
Nevada
New Mexico
Texas
Washington
Wisconsin
A spouse with less-than-perfect credit or who owes alimony, child support, or other maintenance can make your VA approval more challenging.
Apply for a conventional loan if you qualify for the mortgage by yourself. The spouse’s financial history and status need not be considered if he or she is not on the loan application.
Verify your VA loan home buying eligibility. Start here
If you want to buy a vacation home or investment property
The purpose of VA financing is to help veterans and active-duty service members buy and live in their own home. This loan is not meant to build real estate portfolios.
These loans are for primary residences only, so if you want a ski cabin or rental, you’ll have to get a conventional loan.
If you want to purchase a high-end home
Starting January 2020, there are no limits to the size of mortgage a lender can approve.
However, lenders may establish their own limits for VA loans, so check with your lender before applying for a large VA loan.
Spouses and the VA mortgage program
What spouses are eligible for a VA loan?
What if the service member passes away before he or she uses the benefit? Eligibility passes to an unremarried spouse, in many cases.
Find and lock a low VA loan rate today. Start here
For the surviving spouse to be eligible, the deceased service member must have:
Died in the line of duty
Passed away as a result of a service-connected disability
Been missing in action, or a prisoner of war, for at least 90 days
Been a totally disabled veteran for at least 10 years prior to death, and died from any cause
Also eligible are remarried spouses who married after the age of 57, on or after December 16, 2003.
In these cases, the surviving spouse can use VA loan eligibility to buy a home with zero down payment, just as the veteran would have.
VA loan benefits for surviving spouses
Surviving spouses have an additional VA loan benefit, however. They are exempt from the VA funding fee. As a result, their loan balance and monthly payment will be lower.
Surviving spouses are also eligible for a VA streamline refinance when they meet the following guidelines.
The surviving spouse was married to the veteran at the time of death
The surviving spouse was on the original VA loan
VA streamline refinancing is typically not available when the deceased veteran was the only applicant on the original VA loan, even if he or she got married after buying the home.
In this case, the surviving spouse would need to qualify for a non-VA refinance, or a VA cash-out loan.
A cash-out mortgage through VA requires the military spouse to meet home purchase eligibility requirements.
If this is the case, the surviving spouse can tap into the home’s equity to raise cash for any purpose, or even pay off an FHA or conventional loan to eliminate mortgage insurance.
Qualifying if you receive (or pay) child support or alimony
Buying a home after a divorce is no easy task.
If, prior to your divorce, you lived in a two-income household, you now have less spending power and a reduced monthly income for purposes of your VA home loan application.
With less income, it can be harder to meet both the VA Home Loan Guaranty’s debt-to-income (DTI) guidelines and the VA residual income requirement for your area.
Receiving alimony or child support can counteract a loss of income.
Mortgage lenders will not require you to provide information about your divorce agreement’s alimony or child support terms, but if you’re willing to disclose, it can count toward qualifying for a home loan.
Different VA-approved lenders will treat alimony and child support income differently.
Typically, you will be asked to provide a copy of your divorce settlement or other court paperwork to support the alimony and child support payments.
Lenders will then want to see that the payments are stable, reliable, and likely to continue for another 36 months, at least.
You may also be asked to show proof that alimony and child support payments have been made in the past reliably, so that the lender may use the income as part of your VA loan application.
If you are the payor of alimony and child support payments, your debt-to-income ratio can be harmed.
Not only might you be losing the second income of your dual-income households, but you’re making additional payments that count against your outflows.
VA mortgage lenders make careful calculations with respect to such payments.
You can still get approved for a VA loan while making such payments — it’s just more difficult to show sufficient monthly income.
VA loan assumption
What is VA loan assumption?
One benefit for home buyers is that VA loans are assumable. When you assume a mortgage loan, you take over the current homeowner’s monthly payment.
Verify your VA loan home buying eligibility. Start here
That could be a big advantage if mortgage rates have risen since the original owner purchased the home. The buyer would be able to acquire a low-rate, affordable loan — and it could make it easier for the seller to find a willing buyer in a tough market.
VA loan assumption savings
Buying a home via an assumable mortgage loan is even more appealing when interest rates are on the rise.
For example:
Say a seller-financed $200,000 for their home in 2013 at an interest rate of 3.25% on a 30-year fixed loan
Using this scenario, their principal and interest payment would be $898 per month
Let’s assume current 30-year fixed rates averaged 4.10%
If you financed $200,000 at 4.10% for a 30-year loan term, your monthly principal and interest payment would be $966 per month
Additionally, because the seller has already paid four years into the loan term, they’ve already paid nearly $25,000 in interest on the loan.
By assuming the loan, you would save $34,560 over the 30-year loan due to the difference in interest rates. You would also save roughly $25,000 thanks to the interest already paid by the sellers.
That comes out to a total savings of almost $60,000!
How to assume (take on) a VA loan
There are currently two ways to assume a VA loan.
The new buyer is a qualified veteran who “substitutes” his or her VA eligibility for the eligibility of the seller
The new home buyer qualifies through VA standards for the mortgage payment. This is the safest method for the seller as it allows the loan to be assumed knowing that the new buyer is responsible for the loan, and the seller is no longer responsible for the loan
The lender and/or the VA needs to approve a loan assumption.
Loans serviced by a lender with automatic authority may process assumptions without sending them to a VA Regional Loan Center.
For lenders without automatic authority, the loan must be sent to the appropriate VA Regional Loan Center for approval. This loan process will typically take several weeks.
When VA loans are assumed, it’s the servicer’s responsibility to make sure the homeowner who assumes the property meets both VA and lender requirements.
VA loan assumption requirements
For a VA mortgage assumption to take place, the following conditions must be met:
The existing loan must be current. If not, any past due amounts must be paid at or before closing
The buyer must qualify based on VA credit and income standards
The buyer must assume all mortgage obligations, including repayment to the VA if the loan goes into default
The original owner or new owner must pay a funding fee of 0.5% of the existing principal loan balance
A processing fee must be paid in advance, including a reasonable estimate for the cost of the credit report
Find out if you qualify for a VA loan. Start here
Finding assumable VA loans
There are several ways for home buyers to find an assumable VA loan.
Believe it or not, print media is still alive and well. Some home sellers advertise their assumable home for sale in the newspaper, or in a local real estate publication.
There are a number of online resources for finding assumable mortgage loans.
Websites like TakeList.com and Zumption.com give homeowners a way to showcase their properties to home buyers looking to assume a loan.
With the help of the Multiple Listing Service (MLS), real estate agents remain a great resource for home buyers.
This applies to home buyers specifically searching for assumable VA loans as well.
How do I apply for a VA loan?
You can easily and quickly have a lender pull your certificate of eligibility (COE) to make sure you’re able to get a VA loan.
Most mortgage lenders offer VA home loans. So you’re free to shop and compare rates with just about any company that catches your eye.
Getting a VA loan for your new home is similar in many ways to securing any other purchase loan. Once you find an ideal home in your price range, you make a purchase offer, and then undergo VA appraisal and underwriting.
VA appraisal ensures that the home meets its minimum property requirements (MPRs) and is structurally sound and safe for occupancy.
What’s more, VA-specific mortgage lenders are actually some of the highest-rated (and lowest-priced) on the market. Here are a few we’d recommend checking out.
Time to make a move? Let us find the right mortgage for you
Automation, Pre-Approval, QC Products; Rent vs. Buy; More Proposed Paperwork for Lenders
<meta name="smartbanner:author" content="We now have a native iPhone and Android app. Download the NEW APP”>
This website requires Javascrip to run properly.
Automation, Pre-Approval, QC Products; Rent vs. Buy; More Proposed Paperwork for Lenders
By: Rob Chrisman
7 Hours, 10 Min ago
Saturday was George Thorogood’s 74th birthday, and fans know that he wrote the classic tale of rent collection, land ladies, and payment avoidance. Time flies, but that may change. We’re faced with an actual five-day workweek this week, with no Federal holidays until Memorial Day, May 27th, two months away! Yikes. Here in Houston at the TMBA’s Southern Secondary Conference, the attendees are already making use of what time they have, discussing best execution procedures, warehouse tactics, management strategies, economic trends, the market for servicing, and operational efficiencies. I’m a capital markets guy, so arguably learned math good. But I didn’t learn math like this! MBS versus cash sales pick-ups is always a favorite topic, although last year the market was deluged by excess servicing trades. Flow and bulk purchasers of HELOCs and 2nds is search being undertaken by some, as well as climate change and insurance cost increases. (Found here, this week’s podcast is brought to you by nCino, makers of the nCino Mortgage Suite for the modern mortgage lender. nCino Mortgage Suite’s three core products – nCino Mortgage, nCino Incentive Compensation, and nCino Mortgage Analytics – unite the people, systems, and stages of the mortgage process. Today’s has an interview with Yardsworth’s Matt Lucido on creative ways that homeowners can leverage their tappable equity, and how we can see more supply hit the market.)
Lender and Broker Services, Products, and Software
Promising Updated MBA Forecast: The MBA released their recent forecasted predictions on mortgage originations (1 to 4 family). A welcome sight is that they predict a 25+ percent increase in 2Q over 1Q 2024 and a 13 percent increase in 3Q over 2Q 2024. In addition, the 3Q 2024 prediction is nearly 22 percent higher than the same quarter in 2023’s actual originations. As volumes continue to rise quickly, having a solid quality control program is as important as ever in order to continue to produce quality loans while mitigating risk. Quest Advisors has nearly 30 years of experience in assisting mortgage lenders with their quality control needs. Examples of services Quest Advisors provides, are Post-Closing and Prefunding loan QC reviews, along with Servicing, HMDA, and MERS audits. To find out more information on how Quest Advisors can help, please reach out to Matthew Reich at (336) 404-1409.
Tired of paying costly Agency LLPAs for non-owner occupied (NOO) and second home loans? More than 150+ originators have signed up to receive daily mandatory bids and MAXEX is currently winning more than 10 percent of loans bid! Get competitive pricing from five leading non-agency buyers and underwrite to Agency guidelines while avoiding Agency LLPAs. It all seamlessly integrates with your existing bulk trading process. Visit maxex.com/conforming to learn more.
Get a Sweetheart Deal with Loan Stream’s February Specials on FHA/VA and Non-QM price improvements! Get 37.5 BPS Price Improvement on all FHA and VA, Low Balance, and High Balance >=680 FICO, excludes DPA and 25 BPS Price Improvement on FHA Streamlines/IRRRLS. Plus, a Non-QM Price Improvement of 50 BPS on all Non-QM, not including Closed End Seconds and Select Programs. Valid for loans locked 2/1/2024 through 2/29/2024. Terms/Conditions apply see our site and talk with your Account Executive.
“Everyone wants to make their borrowers sticky and we’ve got the Krazy Glue. I’m talking ‘gotta get to the emergency room to get your fingers unstuck’ kind of glue. It’s called QuickQual, it integrates with Encompass® by ICE Mortgage Technology™ and once you pre-approve your borrower, they’re coming back.
Just as Morpheus offered Neo the ultimate choice between reality and illusion in The Matrix, Dark Matter Technologies invites you to choose between the past and the future of mortgage lending in its “Choose Your LOS Experience” ad campaign. Take the blue pill and stay the course with old-school thinking and technology. Or take the red pill and join DMT to revolutionize your business with cutting-edge technology, unparalleled automation, and relentless innovation, as evidenced by the Empower® LOS and the AIVA® artificial intelligence solution. When it comes to your future, “choose wisely.” Schedule a demo with the Dark Matter team today to explore how the Empower LOS can transform your business.
Is More Paperwork Heading Our Way?
Do we need more rules and regulations and paperwork, or better rules and regulation and paperwork? The federal bank regulatory agencies announced their first of a series of requests for comment to reduce regulatory burden. The Economic Growth and Regulatory Paperwork Reduction Act of 1996 requires the Federal Financial Institutions Examination Council and federal bank regulatory agencies to review their regulations every 10 years to identify any outdated or otherwise unnecessary regulatory requirements for their supervised institutions.
To facilitate this review, the agencies divided their regulations into 12 categories and are first soliciting comments on their regulations in three categories: Applications and Reporting, Powers and Activities, and International Operations. Comments on the relevant regulations will be accepted for 90 days after publication in the Federal Register.
But Ballard Spahr reports that on February 16, the Financial Crimes Enforcement Center (“FinCEN”) published a Notice of Proposed Rulemaking (“NPRM”) regarding residential real estate. The final version of the NPRM published in the Federal Register is 47 pages long. We have created a separate document which more clearly sets forth the proposed regulations themselves, at 31 C.F.R. § 1031.320, here.
“FinCEN also has published a Fact Sheet regarding the NPRM, here. The Fact Sheet, slightly over four pages long, is helpful and walks through the basics of many of the proposed requirements. The NPRM proposes to impose a nation-wide reporting requirement for the details of residential real estate transactions, subject to some exceptions, in which the buyer is a covered entity or trust. Title agencies, escrow companies, settlement agents, and lawyers need to pay particular attention to the NPRM because, based on FinCEN’s “cascade” approach to who should be responsible for complying with the reporting requirements, these parties are the most likely to be responsible.
”Rent Versus Own” Economics
If you’re still paying off your mortgage, renting is likely cheaper than owning in each of the nation’s 50 largest metros. Median rent costs are lower than median homeowner costs for those with mortgages but higher than costs for homeowners without mortgages. LendingTree analyzed housing data to compare monthly rental and housing payments for homes with and without mortgages in the 50 largest metros in the U.S.
The difference between median housing costs for homes with a mortgage and median gross rent is $563 a month. The spread in costs between renting and owning a home with a mortgage is widest in the San Jose, Calif., San Francisco, and New York metros. The difference between the median monthly housing costs for homes with a mortgage and the median monthly gross rent in these metros is $1,341, $1,303, and $1,289, respectively. Phoenix, Orlando, Fla., Jacksonville, Fla., and Atlanta have the narrowest gaps between renting and owning a home with a mortgage. In Phoenix and Orlando, median gross rent costs are $87 and $145 less than median monthly housing costs for homes with a mortgage. In both Jacksonville and Atlanta, the difference is $216.
That said, Barron’s reports that, “Prospective buyers spent the President’s Day holiday last week window shopping, early data suggest. ‘Showing activity was strong,’ says Orphe Divounguy, a senior economist at Zillow, citing data from home tour software company Showingtime. Home touring activity was up 19.4% from the start of the year, pointing to a strong seasonal ramp-up.”
Capital Markets
Markets are known for “getting ahead of themselves,” and the latest example may be the “insatiable demand” for Nvidia’s artificial intelligence chips. The stock has shot up, resulting in the company briefly surpassing a $2 trillion valuation. But other equity prices have tagged along, boosting the general stock market.
That said, investors have been walking back expectations for Federal Reserve rate cuts. Goldman Sachs, for example, has pushed back expectations for a Fed rate cut to June. If you like rates where they are, fine. If you’re hoping for lower rates to jump start your business in the near future, well…
The dominating market narrative recently has been that while interest rate cuts may be appropriate at some point this year, it is not likely to be anytime soon. Resilient economic growth and optimism that inflation will continue to fall in the face of high interest rates has fostered household demand, bolstered expectations the U.S. will avoid a downturn in the near term and forced investors to ratchet back bets on early rate cuts. Philadelphia Fed President Harker warned against betting on early rate cuts late last week, saying “I will signal my belief that we’re ready for a rate decrease when all the data, both the hard and the soft, give me that signal.” Pricing in fed funds futures has all but erased the chance of a March rate cut, and the chance of a cut in June is currently a coin-toss. Economists now see a 40 percent chance of recession in the next year, the lowest reading since mid-2022.
Last week was fairly quiet in terms of economic releases and the few that came out did nothing to change the current narrative of U.S. economic conditions. The Leading Economic Index declined 0.4 percent versus a -0.3 percent forecast and is now just two points above its April 2020 low. Historically, the prolonged decline observed in this data set predates a recession, but at the moment, it appears this recession signal is out of step with current economic conditions. Elsewhere, existing home sales rose 3.1 percent in January thanks in part to declining mortgage rates in December.
Since then, rates have moved back up towards 7 percent. The FOMC has repeatedly indicated it is in no hurry to begin reducing the fed funds rate until they are fully confident inflation is sustainably moving towards their 2 percent goal.
This week opens with $169 billion in month-end supply over the first two days along with the usual $309 billion in Treasury bills. There are several important economic releases with the highlight being the Fed-favorite PCE price index for January is on Thursday. We will also receive durable goods for January, home price indexes for December, consumer confidence for February, the second reading on Q4 GDP, Chicago PMI for February, January construction spending, and final February consumer sentiment.
The deadline for Congress to avert a partial government shutdown is Friday. Today starts quietly with new home sales for January, expected to register 680k versus 664k in December, Dallas Fed manufacturing business index for February, and remarks from the new Kansas City Fed President Schmid. The Treasury will auction $63 billion 2-year notes, $70 billion 6-month bills, $63 billion 5-year notes, and $79 billion 3-month bills. We begin the week with Agency MBS prices roughly unchanged from Friday’s close and the 10-year yielding 4.24 after closing last week at 4.26 percent. Helping ARM rates, the 2-year is down to 4.68 percent.
Jobs and Transitions
Logan Finance is hiring! Non-QM Account Executives are in high demand at Logan Finance, especially those of you in Florida. Contact us today to learn more. Speaking of hiring, Logan is happy to announce that Ryan Rathert and Sarah Gonzalez have joined the executive team as Chief of Staff and Chief Operating Officer, respectively. Ryan is a proven mortgage finance wizard and Sarah a renowned industry maven, so put your sunglasses on, because the future at Logan is bright! And the spotlight will be on Logan’s SVP Business Development, Paul Jones, as he presents “Discover the DSCR Difference with Logan Finance”, session #2 in the monthly series, “The Modern Non-QM Experience”. Join Paul on March 6 at 2pm ET. Register here. If you’re looking for a Non-QM career boost, send your resume or check out LoganWholesale.com and LoganCorrespondent.com for more information. Join Logan and become a #LoganLeader today.
“Don’t just close loans, close the gap on your potential. Kind Lending is seeking mortgage professionals with an entrepreneurial spirit and KIND mindset. We will provide a comprehensive catalog of loan products to serve your clients, along with advanced marketing and tech tools to grow your brand and exponentially expand your reach. You will be empowered to rewrite your success by leveraging the powerful tools available at your fingertips. It’s your business. We are here to fuel it. If you are ready to build win-win relationships with a company that values you and your growth, contact Traci Miller, National Talent Acquisition Manager.”
Click n’ Close, a multi-state mortgage lender serving consumers and mortgage originators through its wholesale and correspondent channels and formerly known as Mid America Mortgage, announced Polly Cracchiolo has joined the organization’s third-party originator (TPO) sales team as an account executive.
Download our mobile app to get alerts for Rob Chrisman’s Commentary.
Share via Social Media:
All social media shares will include the image and link to this page.
“Despite the significant decline in mortgage affordability in the past two years, millions of families who do not own their home have the means to afford the largest share of a homeowner’s cost — the mortgage,” said Zillow senior economist Orphe Divounguy. However, he emphasized that income isn’t the only obstacle. “It’s crucial to recognize … [Read more…]
Million-dollar homes are the perfect blend of form and function, setting the stage for true elegance and luxury.
Whether it’s the understated minimalism seen in Kim Kardashian’s home or the opulent maximalism of designer high-end houses, the key lies in creating spaces where functionality becomes virtually invisible, contributing to an overall aesthetic that’s both breathtaking and discreet.
You can see this in the prohibitively expensive homes from shows like Selling Sunset and Million Dollar Listing. Those million-dollar homes focus on hiding conventional features and appliances, allowing the eyes to revel in the design without distraction.
The philosophy here is simple yet profound: less is more.
Luxury design hinges on the power of illusion – making the essential elements of a home feel like an integrated, almost indistinguishable part of the overall design.
This invisible functionality transforms living spaces into masterpieces of high-end hospitality and cozy elegance, where every detail is meticulously crafted to elevate the experience of luxury living.
Blend kitchen appliances with the design
Looking at luxury homes and apartments, you won’t find their microwave, stove, or refrigerator glaring out like sore thumbs in the kitchen.
One of the best examples we’ve seen of this is in actor Jesse Tyler Ferguson’s house in Encino, a newly built contemporary house in Los Angeles with impeccable interiors.
The impressive property’s most distinctive interior traits are the warm wood tones used throughout, which serve as both décor elements and provide tons of storage space — particularly in the kitchen, which is clad in cabinets and wood paneling made out of hemlock wood.
The refrigerator is an essential appliance in any home but as we can see in the Modern Family star’s home, it is artfully hidden within the cabinetry.
It perfectly matches the surrounding cabinets, giving a unified and uninterrupted visual flow that exudes sophistication.
Similarly, the microwave is tucked away, out of the direct line of sight, allowing guests to focus on the elegant lines and luxurious finishes of the kitchen without the distraction of appliances.
Strategically concealing appliances amplifies the spaciousness and clean lines that are synonymous with luxury, making the kitchen not just a place for meal preparation but a statement of design excellence.
That’s not because the owners don’t own any and eat out for every meal but because their appliances are expertly designed to be hidden away when they are not needed.
Luxury designs do not break the viewer’s experience of ah and wonderment with the typical microwave or fridge sticking out.
Hide air vents in plain sight with frameless diffusers
When it comes to the interiors of the most coveted million-dollar listings, the devil is in the details—or perhaps, it’s the lack thereof. The luxurious spaces you see have a secret: the art of concealment.
This is particularly true when it comes to the mechanics of comfort, like HVAC air diffusers, which are essential yet often an eyesore.
But not in these homes. Here, they’re incorporated with such finesse that they’re almost invisible, represented by the hardly visible lines blending into the ceilings and walls as seen in the image below.
These aren’t your standard vents; they’re design statements in their own right, albeit in the most understated way.
Frameless diffusers like the ones from Invi Air are installed into the drywall and colored to match the room’s palettes for a nearly invisible finished look flush with the wall or ceiling.
They don’t demand attention. Instead, they support the room’s ambiance in quiet anonymity, allowing the stunning vistas outside the window or the curated art pieces to hold the gaze. Invi Air diffusers are easily customizable with any type of paint, allowing them to blend seamlessly with the color and texture of the surrounding surface.
The TV is almost always out of sight
In the modern luxury home, the television—once the centerpiece of every living room—has found a new role as the hidden gem of the room.
The trend in million-dollar homes is clear: the TV should be felt, not seen until it’s time for it to shine.
This philosophy has created creative solutions that make the TV almost magically appear when needed and disappear when not, maintaining the room’s sleek, elegant aesthetic.
Take Samsung’s Frame TV, for example. This ingenious device takes the concept of ‘hidden in plain sight’ to new heights, doubling as a digital art display when not in use.
It sits flush with the wall, encased in a stylish frame that one might mistake for an actual painting or photograph.
It’s a perfect fit for spaces where the presence of technology needs to blend with the strokes of interior design finesse.
Take this one step further with LG’s latest technological innovation: the transparent TV.
The TV becomes practically invisible when not in use and can even blend itself to look like a live fish tank or fireplace to disguise itself further.
When the TV is revealed, it’s not just about catching up on the latest series or movie; it’s an event. The act of the screen coming to life from its artistic camouflage adds a layer of luxury and technical prowess to the space. It’s a conversation starter, a nod to the homeowner’s taste for elegance and their flair for the dramatic.
The TV in a luxury home is no longer just a piece of technology; it’s part of the home’s dynamic, an indulgent experience that’s there when you want it without compromising the minimalist ethos of the space.
This approach to home entertainment design is yet another detail that sets high-end homes apart, offering a seamless blend of lifestyle and luxury.
As all the posh houses seen on Selling Sunset prove time and time again, a million-dollar home’s aesthetic is a symphony of design and technology where every note is perfectly pitched for an experience that’s both sumptuous and smart.
These homes aren’t just living spaces but canvases for expressing the height of personal luxury, where every hidden feature is a brushstroke in a masterpiece of modern living. And we don’t find it fair that they’re reserved for luxury homeowners, so we hope the above tips might inspire you and you’ll end up implementing them in your own home.
*Featured image credit: R ARCHITECTURE on Unsplash
More stories
Ultra-luxury rentals: What you need to know about renting million-dollar homes
What are spec homes? A recent history & the biggest, boldest spec mansions to come to life
What is biophilic design in architecture and home building? Definition and examples
In today’s volatile housing market, ensuring your home is protected against unexpected repairs and replacements is more crucial than ever. As homeowners seek peace of mind amidst the unpredictability of homeownership, home warranty companies have stepped up to offer a buffer against unforeseen expenses.
5 Best Home Warranty Companies
With so many options available, pinpointing the most reliable and value-packed home warranty company can be daunting. To help you choose, we’ve curated a list of the best home warranty companies to ensure your home’s systems and appliances receive the top-tier coverage they deserve. Take the time to discover which provider aligns best with your needs.
#1 Choice Home Warranty
There are plenty of reasons to go with Choice Home Warranty. First, they are a top-rated business according to ConsumerAffairs.com and have an average rating of 4.8 out of 5.
They have a five-star rating from Trust Pilot, and Inc. 5000 has recognized them as one of America’s fastest-growing private companies.
Choice has customer service available 365 days a year, 24 hours a day, 7 days a week. So if you’ve got a problem, don’t be afraid to pick up the phone and call them.
They are more than happy to answer any questions about your home warranty plan or, if need be, put in a request for a repair. A licensed, pre-screened, and continuously monitored technician will come to your house, usually within one or two business days.
The age of your home, its systems, and appliances is not relevant to Choice Home Warranty. They always cover items that have been properly maintained and were in well-working order when coverage was initiated.
If the item in question needs to be replaced but is no longer available on the market, they will give you a cash payment of the item’s replacement cost.
Another plus is that you don’t even have to get your home inspected before Choice Home Warranty will begin offering you coverage.
Choice also has a very reasonable $85 dollar service call, which makes them among the most competitive warranty providers for service calls.
Plan Options
1. Total Plan ($450 a year)
Includes coverage on the following —
AC
Heating
Electrical
Plumbing
Water Heater
Whirlpool
Refrigerator
Oven
Dishwasher
Microwave
Garbage Disposal
Washer and Dryer
Ductwork
Garage Door Opener
Ceiling and Exhaust Fans
2. Basic Plan ($378 a year)
Includes coverage on everything mentioned above, EXCEPT:
AC
Refrigerator
Washer and Dryer
Items that can be added at additional cost include:
Pool
Central Vacuum
Well and Sump Pump
Limited Roof Leak
Stand Alone Freezer
Second Refrigerator
Septic System
Septic Pumping
Read our full review of Choice Home Warranty
#2 Advanced Home Warranty
Advanced Home Warranty offers comprehensive coverage and a 24/7 claims hotline, making it a strong choice for anyone considering a home warranty.
Home warranties are available nationwide, so you can qualify for a plan, no matter where you live in the U.S. Plus, you can try it out without any risk by signing up to get your first month completely free of charge.
Trade service fees are reasonable at $60. If the cost of the repair is less, you’ll pay the smaller amount. This is one of the lowest service fees available among the providers on our list.
While they don’t offer a wide range of plans, you can get coverage on some of the big-ticket items associated with homeownership.
A low monthly fee can be much more manageable than paying for replacements outright every time an appliance breaks. There are also parts of even larger systems that are included in their coverage.
Here’s a breakdown of the two home warranty plans available from Advanced Home Warranty, how much you’ll pay, and what exactly they include.
1. Basic Plan ($370 a year, plus one month free)
Includes coverage on the following:
Heating System
Electrical System
Plumbing System
Dishwasher
Microwave
Garage Door Opener
2. Total Plan ($450 a year, plus one month free)
Includes coverage on everything above, PLUS:
Air Conditioning
Refrigerator
Washer/Dryers
Do read each home warranty plan for details on exactly how each specific item on the list is covered.
Read our full review of Advanced Home Warranty
#3 Liberty Home Guard
Liberty Home Guard offers a high degree of personalization for your home warranty coverage. For example, you can pick the plan and also how often you want to be billed.
You can choose monthly payments, annual payments, or for the most savings, multi-year home warranty plans.
Liberty Home Guard offers a service call fee of $60, which is a competitive service fee. You can also expect your service call to be delivered within 48 hours of making a claim.
You don’t need a home inspection to qualify for coverage with Liberty Home Guard. There’s also no limit to how many claims you can file within a year.
You can file your claims online for your ease and convenience. And with a 60-day satisfaction guarantee on service, you’re sure to be satisfied with the repair or replacement process.
If for some reason, you want to cancel your plan early, it’s entirely possible because there’s no annual contract. You’ll receive a prorated refund for any time you’ve paid for, except for a small administrative fee.
With Liberty Home Guard, there are three different coverage options you can choose from. You can also include optional add-ons in any plan.
1. Appliance Warranty for $39.99 Monthly or $399.99 Annually
Clothes washer
Clothes dryer
Refrigerator with ice maker dispenser
Built-in microwave oven
Dishwasher
Garbage disposal
Range/ oven/ cooktop
Ceiling and exhaust fans
Garage door opener
2. Systems Guard for $49.99 Monthly or $499.99 Annually
Air conditioning
Heating
Ductwork
Plumbing
Electrical
Water heaters
3. Total Home Guard for $59.99 Monthly or $599.99 Annually
This choice offers the most protection of all the plans and includes everything listed in the two plans above.
4. Optional Add-ons
Pool and spa: $17.00 monthly; $195.00 annually
Sump and pump: $3.00 monthly; $36.00 annually
Central vacuum: $3.00 monthly; $36.00 annually
Well pump: $9.00 monthly; $101.00 annually
Additional spa: $16.00 monthly; $188.00 annually
Septic system and septic sewage ejector pump: $11.00 monthly; $123.00 annually
Stand alone freezer: $4.00 monthly; $44.00 annually
Second refrigerator: $4.00 monthly; $44.00 annually
Read our full review of Liberty Home Guard
#4 Complete Protection
Complete Protection is another excellent home warranty company. Servicing all but nine states, this A+ Accredited Business is open 24/7.
Only slightly more expensive, this once small-scale, family-owned business offers some of the most comprehensive home warranties available in North America.
One of the many benefits offered by Complete Protection is their no-fee service call policy. With most quality providers charging at least $50 per service call, having no service call fee at all is a major perk.
They have five plans you can choose from:
Kitchen/Laundry: $32 a month/ $384 a year — covers your dishwasher, oven, refrigerator, and washer and dryer.
Heating/Cooling: $34 a month/ $408 a year — covers your furnace, AC, and water heater.
Basic Built-ins: $40 a month/ $400 a year — Furnace, AC, water heater, dishwasher, and oven.
Full House: $50 a month/ $600 a year — Furnace, AC, water heater, dishwasher, oven, refrigerator, and washer and dryer.
Full House Plus: $60 a month/ $720 a year — Includes everything mentioned in the first four plans, but also includes electrical wiring and in-bound water pipes.
What makes Complete Protection stand out even more:
There are a few other things that make Complete Protection stand out from its competitors. For one, their home warranties don’t have a deductible. As a result, you don’t have to pay any approved repair costs when something happens — this includes the initial service call, parts, and labor.
Secondly, CP pays for all preventative maintenance. Other home warranty companies mandate that their customers undergo preventative maintenance on items such as HVAC systems, but they won’t even pay for it. Instead, they force their customers to do so!
Thirdly, CP home warranties cover all the parts within an appliance. Most home warranty companies exclude parts like ice makers or washing racks within dishwashers. CP does not pick and choose which parts it will cover.
Lastly, Complete Protection allows you to choose your own service contract provider. So, if you have a certified contractor with whom you work, you can go to them whenever home repairs are needed.
They do this because they feel that their customers should always be comfortable with the person working in their house.
Read our full review of Complete Protection
#5: American Home Shield
The accolades American Home Shield has received are many. In addition to being a Better Business Bureau Accredited Business, they also received the Women’s Choice Award from 2014 to 2016.
On top of that, Home Warranty Reviews gave American Home Shield the Best in Service award in 2014 and ranked them as Top Rated from 2015-2017. Last but not least, they are Consumer Affairs Accredited.
Why so much recognition from the industry? For starters, they’re always open. You can always reach them regardless of what day or time it is. And, when you do, expect a local contractor to be at your home within no more than 24 hours. You don’t even have to get on the phone. You can request home repairs directly from their website.
Another reason American Home Shield is recognized as the best among the best is its versatility with its home warranty plans. They have four to choose from:
Systems Plan: Covers the replacement or repair of your home’s key systems, such as: plumbing, electrical, heating, air conditioning, and smoke detectors.
Appliances Plan: Includes coverage on common, everyday household appliances, such as refrigerators, built-in food processors, dishwashers, and washer and dryers.
Combo Plan: Get coverage on all of your primary home systems and appliances. Saves you $14 a month if you were to rather purchase the systems and appliances plans separately.
Build your own plan: Choose only what you want to be covered by selecting 10 or more items from their list of covered items. This way you get the coverage that you care about the most.
Another element of their customized service is their service fees. American Home Shield allows customers to choose from a service fees range of $75, $100 or $125 per service request. This allows you to get the plan you want without having to account for a high service call fee.
The ability to choose your own service call fee regardless of the plan you’re on separates American Home Shield from most other home warranty companies which carry a standard service call fee.
Additionally, American Home Shield can provide coverage for your pool, spa, well pump, and septic system (at additional costs) and can assist you during the moving process by covering your home while it’s listed. If the new owner decides they would like to upgrade service afterward, it’s an easy switch to do so at closing.
Read our full review of American Home Shield
Methodology: How We Chose The Best Home Warranty Companies
When researching the best home warranty companies, we analyzed over 20 of the most popular home warranty companies. Our team spent hours reviewing each home warranty company. We examined many factors, but mainly focused on the following:
Home warranty plans and options
Pricing
Reputation and trustworthiness
Customer reviews
Pros of Home Warranties
Peace of Mind
One of the major benefits of a good home warranty is peace of mind. A home warranty can bring some real financial security against unexpected home repairs. While getting your home in ideal shape can be tough, maintaining that level can be even more stressful. A good warranty coverage can cut away a big chunk of that worry.
Convenience
One of the biggest problems people can encounter when faced with unexpected breakdown at home is finding good help. But a home warranty also reduces some of that stress, as your provider can provide you with a relevant licensed expert within their network.
Potential Savings
In many cases, standard home repairs – such as a new boiler, for example – can be a lot cheaper if replaced under warranty. While home warranties can’t guarantee savings, chances are you will see the benefits speak for themselves over time.
Transferable
Many home warranties are transferable, meaning you could carry your plan to a new home if you decide to move. Be sure to check whether transferability is a feature of any warranty before signing if that’s important to you.
Cons of Home Warranties
Wait Times
Unfortunately, wait times for claims can sometimes keep you waiting. If you need a quick fix or emergency repairs at home, you may have to wait longer than you would like. One thing that can help here is looking for a provider that provides an online claims process. This is because online claims are often processed faster than those done over the phone.
Coverage Exclusions
Home warranties don’t cover everything, and it can be hard in an emergency to remember your exact coverage limits. It’s important to read the details carefully before signing up, and put a plan in place if you need work that falls outside your warranty coverage.
Cost
Home warranty coverage isn’t cheap, especially if you want to secure protection across your property. You won’t necessarily be covered by service fees, even if you choose a plan with a high service fee. And of course, some maintenance and repairs can come with further costs on top of your plan. These high costs can make it difficult to discern whether a home warranty is the right thing for you.
Other Home Warranty Companies to Consider
Here are a few other home warranty companies that didn’t make our top 5 that you may still want to look into.
Like so many things in our lives, a home warranty is something that we don’t often think about until we absolutely need it. Sure, you have home insurance, maybe even flood insurance, but that only covers certain situations.
Homeowners Insurance
Homeowners or renters insurance can cover damage to your home from things like fire, theft, storms, and some natural disasters. In addition to your homeowners insurance plan, you should choose to purchase a home warranty to protect your belongings in a way that insurance lacks.
If you’ve ever purchased a large appliance, a computer, or even a television from a retailer, then you’re probably familiar with the concept of a warranty.
However, those are warranties sold at the time of purchase and cover only one product. The benefit of home warranty protection is that it can cover every product in your home and more.
Choosing a Home Warranty Plan
What a home warranty plan covers will depend on the plan you choose, and there are many to choose from. A home warranty can cover anything from your microwave oven to your plumbing and your electrical systems.
Deciding which plan is right for you will determine what items and systems it covers and how much it will cost. Typically, home warranties charge either a small monthly or annual fee that can save you a lot of money in the long run.
How to Choose the Right Home Warranty
Choosing the right home warranty is key. Let’s run through all the details you need to consider before making your decision.
Determine Your Coverage Needs
At the very least, it’s important to get at least an idea of what sort of coverage you need. Take the time to decide which items in your home you want to protect before comparing offers. You’ll find plans that cover appliances, home systems, and plans that cover both.
Compare Quotes
It’s worthwhile to shop around. Try to acquire at least three different quotes from plans that you’re genuinely interested in. And use this time to also prioritize clearing up any questions you have about the policies you’ve been offered.
Don’t forget to pay close attention to the various prices you’ll see for service call fees. Some companies are much more competitive than others, and some even offer a service fees range which you can choose from depending on your needs and budget.
Review Sample Contracts & Liabilities
The next step is to review any sample contracts carefully. You’ll want to identify the limitations and exclusions in the contract, especially.
Furthermore, be sure to double-check cancellation policy just in case you decide your warranty isn’t working for you later on.
Check Reviews
Finding the best home warranty company for you will require some further research. You can read customer reviews online to find a company that provides great customer service as well as competitive plans.
Be sure to look out for any record of previous legal action taken against the company, too.
Home Warranty FAQ
What is a home warranty?
A home warranty is a type of service contract purchased to cover breakdowns, repairs, and replacements of home appliances and systems. Home warranties are designed to cover normal wear-and-tear damage on covered items and systems.
When a covered item breaks down or otherwise requires attention, you file a claim with your warranty provider. They then send a licensed technician to your home to assess the issue. Instead of paying for the full cost of the repair, being under warranty generally means paying only a small service fee for necessary repairs. The price of service fees varies between providers.
Home warranties are popular because they offer homeowners maintenance coverage and emergency repairs without having to rely on savings. The home warranty market today is huge and can provide terms for homes and budgets of many shapes and sizes.
What does a home warranty cover?
Home warranties can cover a whole range of systems and appliances within your home. You can decide how much you want to spend and determine what items will be covered by your home warranty.
Most home warranty companies break down their offerings into good, better, and best options. The good option, and least expensive, is one that covers most if not all of your appliances.
Major Home Systems
More expensive on an upfront basis are plans that cover major home systems. These home warranty plans cover the systems within your home. If you’re renting, this may not be of concern to you. However, if you own your home, you know that a plumber or electrician can cost a lot more than replacing your refrigerator.
If you’re less concerned with appliances and worried about what keeps your home humming along, then you may want to consider a system plan.
Appliances
Appliances like your microwave, washer and dryer, dishwasher, and often a lot more are covered by the best home warranty companies. These are great options for those who are renting or want to spend the least amount of money.
Systems & Appliances
The most expensive plans, of course, offer the most coverage. The best plans cover both systems and appliances. So while they’re the most expensive, they’re also the best value. Covering your systems and appliances together will typically save you around 20% to 30% of your total bill.
Basic plans from the best home warranty companies will cover the majority of systems and appliances in your home but don’t cover everything. If you have a pool, for instance, you may have to choose additional coverage.
Some home warranty companies even allow you to add coverage to cover your homeowners’ insurance deductible. Combining appliance and system coverage may also include these additions.
There are exclusions to what a home warranty will cover. Unfortunately, no plan is a blank check to have every item in your home replaced. These are repair plans and not replacement plans.
What is not covered by a home warranty?
The extent of your warranty coverage will vary greatly between companies and plans available. Having said that, however, here is a list of the ideas that are usually not covered by a home warranty:
Structural issues, paint and flooring
Commercial-grade equipment or systems
Pre-existing conditions
Rust, corrosion and sediment problems
Improper maintenance, installation, design, or manufacturer defect
Detection and removal of asbestos and mold
Building and zoning code violations
How much does a home warranty cost?
Home warranty pricing varies greatly depending on the coverage you choose, the home warranty company, and the area in which you live. In general, though, if you’re just covering appliances, expect to pay around $30 a month.
If you’re looking for only system coverage, you’ll probably pay around $35 a month. However, if you combine your coverage to include both systems and appliances, expect to pay around $45 per month.
Adding things not covered by a typical home warranty plan can also increase your monthly bill. If you have an atypical appliance or system, it’s possible that basic plans do not cover it. Not everyone has a swimming pool, a septic tank, a whirlpool tub, or a spa.
Check with your individual plan to ensure that all systems and appliances you want to have covered are actually included. If they aren’t, see if you can add them separately.
Service Fees
In addition to your monthly fee, you’ll also need to pay service fees for a service call. This cost can vary greatly.
The best home warranty companies offer plans that will cost you around $50 to $125 per repair. This is based on the home warranty company, the plan, and the item that needs to be fixed. While this may seem like a lot, consider the cost of the average repair without a warranty.
What can you expect to pay without a home warranty?
The average repair cost of a refrigerator is $275 to $325. The igniter on an oven or range may only cost $110 to $200 to repair, but a control board could cost you more than $260.
Replacing a rubber gasket on your washer will set you back between $200 to $300. These expenses can quickly add up compared to the fee home warranty companies charge for a visit.
Bottom line: They’ll address the issues with your current item but won’t give you a new one.
Pre-Existing Conditions
Pre-existing conditions are not covered either. Unfortunately, if one of your major appliances breaks, you can’t just sign up for coverage and expect to have it fixed.
Most home warranty companies will cover an unknown pre-existing condition. However, you can’t have an appliance covered if you or the home warranty provider knows that it’s already broken. This is why it’s a good idea to think about purchasing home warranty coverage before your appliances break.
Coverage Waiting Period
Most companies impose a 15 to 30 day waiting period before coverage can begin. There are, however, exceptions to this rule. For instance, if you have a home warranty that is ending soon, you may be able to begin on the date your coverage stops.
It’s important to read the fine print of your service contract. Each home warranty company will have very specific coverage details.
While all will most likely cover your refrigerator, not all of them will cover wear and tear on the gasket that seals it. Typically, the more expensive the plan, the more it covers, but this is not always the case.
What is the process for having an item repaired?
When something breaks, especially if you have a home warranty, you’ll want it fixed as quickly as possible.
Going without a microwave for a week or two may be acceptable, but if it’s your refrigerator, you may not be so patient. When an item malfunctions or breaks, you’ll need to contact your home warranty company’s customer service and explain the issue.
Make sure you report the problem as quickly as possible. The faster you make the call, the faster you’ll get an appointment and have your issue resolved.
Independent Contractors
The home warranty provider will most likely assign an independent contractor to inspect and repair the item. Obviously, system repairs can take longer and be more labor-intensive.
For example, replacing a part on your furnace will be a lot easier than repairing electrical wiring or plumbing inside your walls.
Depending on what is wrong, the contractor may have to order parts or return with specialized equipment. You’ll be required to pay a service fee for each item you wish to have repaired. However, the contractor should ensure that the item returns to working order.
Workmanship Guarantee
Once you’ve had an appliance or system repaired, that item is covered under a workmanship guarantee. Think of it as a warranty within your warranty.
The home warranty provider guarantees the parts and labor of that particular repair for a specified amount of time. This is usually around 90 to 180 days after the repair. So, even if you cancel your plan, they will still cover the repair during that time.
Who should pay for a home warranty?
Many times the seller will buy a home warranty to make the purchase of the home more appealing. Sometimes a real estate agent will even purchase a home warranty as a courtesy to the clients they’re representing. However, buyers, sellers, real estate agents, and current homeowners can all buy a home warranty. It’s also important to note that buying a home warranty can be done at any time, before or after closing.
What should you look for in a home warranty company?
A home warranty can save you a lot of hassle and headaches, not to mention money, down the road—as long as you do your homework and think it through.
A home warranty covers many things that homeowners insurance does not. Having peace of mind knowing that costly home repairs won’t spring up unexpectedly is a great feeling.
Choosing the right type of coverage for you is the next step. When you think about the type of coverage you want, think about the items you want to protect in your home.
Renters
If you’re just renting, then plumbing and electrical work is not a concern for you. Your homeowners insurance should cover things like theft and fire, but you still want to be covered when something breaks that you actually own. Choosing an appliance plan is probably the right option for you.
If you live in an older home that you own, a more comprehensive plan may be the right choice for you. It’s comforting to have your home inspected before purchasing, but things can still go wrong. You can avoid costly maintenance as long as you plan ahead.
Are home warranties worth it?
The answer to this question will depend largely on your unique circumstances. Two of the biggest factors are the age of your home and the quality of your appliances. In addition, your own ability and comfort with repair and maintenance is a factor.
Almost every home appliance and system will eventually require significant repair or even replacement. Depending on your own DIY skills, you might be comfortable taking responsibility for most repairs. Others might want more comprehensive coverage. But even still, there could be plenty of reasons why you would prefer to have a home warranty.
How do I cancel my home warranty?
Your first step should be to review your contract and make sure you understand the cancellation policy. Most companies will charge a cancellation fee that can range from 5% to 10% of the outstanding fee.
Thereafter, you can contact the company and tell them you’re considering cancelling your warranty. If possible, try to speak to a sales rep with whom you’re familiar.
Some companies require you to send a written notice of termination. Remember to cancel any automated payments from your credit card or bank account, if necessary. It might also be a good idea to request a written confirmation of the cancellation for your records.
Which home warranty company has the lowest service call fee?
Service call fees can vary widely between companies, but it’s important to try to find the most competitive service call fee available to you. Service fees generally range from $50 to $150 per service call.
The trick with finding a competitive service fee call is making sure you don’t sacrifice the quality of service calls. Some of the top-rated home warranty companies charge a higher service fee. However, it could be worth it to have the security and confidence of quality home service.
Final Thoughts
To find the best home warranty company, you will need to read the contract thoroughly. Every company that you investigate will have a contract. In that contract, they’ll spell out exactly what they do and do not cover.
They’ll also explain the cost, who will fix your items if they break, and more. Comparing two or more home warranty companies can give you a sense that you’ve made the right decision. Always make sure you do your homework.
Furthermore, check to see if a home inspection is required before qualifying for a home warranty with a specific company. Many don’t require this extra step, but it’s wise to be prepared in case they do. You definitely want to consider both cost and convenience as part of your ultimate decision.
Full Reviews of Home Warranty Companies
Looking for more options? Check out our other home warranty reviews below.
Looking for a real estate side hustle? Whether you are looking for passive income ideas or if you are looking for a part-time job (or more!), there are many different real estate side hustles. I have done a few different real estate side gigs, and I know many people who have side hustles in this…
Looking for a real estate side hustle?
Whether you are looking for passive income ideas or if you are looking for a part-time job (or more!), there are many different real estate side hustles.
I have done a few different real estate side gigs, and I know many people who have side hustles in this area as well. To get started in real estate, you don’t have to spend a lot of money – there are several real estate side gigs that can be started even if you are brand new or are on a budget.
Key Takeaways
Real estate side hustles have a range of options from income generating assets to freelance opportunities to office jobs.
You can supplement your income with both short-term and long-term real estate strategies.
Finding the right fit depends on your availability, investment capacity, and financial goals.
Best Real Estate Side Hustles
Here’s a quick summary of some of the different best real estate side hustles:
House hacking: Buy a property, live in one unit, and rent out the rest.
REIT investing: An easy way to start investing in real estate with less capital.
Airbnb rentals: Rent out a spare room or an entire property on a short-term basis.
Property management: If you’re organized and good with people, managing properties for others could be a perfect fit.
Long-term rentals: Becoming a landlord can generate steady cash flow.
Fix and flip: Buy properties that need work, renovate them, and sell them for a profit.
Below, you will read the full list and learn more about each one.
1. House flipping
Flipping houses can be a good real estate side hustle if you like real estate and enjoy fixing things up.
When you flip houses, you’re basically buying homes, making them better with repairs and upgrades, and then selling them to make more money.
The first thing to do for a successful house flip is to find a property that can be made better, such as by looking for homes in neighborhoods that are getting better or have room to grow. Think about things like where it is, what the market is like, and the condition of the property.
Before putting money into anything, it’s important to carefully look at the finances. You’ll want to figure out how much it will cost to buy, fix, and keep the property, and think about things like the cost of materials, paying workers, getting a loan, and the costs while you’re fixing things.
To flip a house well, you need to make smart changes that make the property better, without spending too much, by concentrating on important areas like the kitchen and bathrooms, and fixing any big problems with the structure or safety.
Recommended reading: 10 Best Books on Flipping Houses To Make Money
2. Investing in REITs
Real Estate Investment Trusts (REITs) are companies that own, operate, or finance income-generating real estate. They are a way for you to invest in real estate without directly managing or owning properties.
An REIT is like a company that owns and takes care of real estate that makes money. They sell shares of this company to people, kind of like how stocks work.
When you invest in REITs, you can earn money from the real estate world without actually owning any property. So, if you don’t want to deal with being a landlord, this could be a good option. It’s way less work than owning property and handling it yourself.
You can even spread out your money and invest in different kinds of properties with REITs, like houses, offices, factories, and stores.
3. Getting a roommate
Getting a roommate in your home, whether that be a full-time roommate or renting out an extra room in your home short-term on Airbnb, can be a great real estate side hustle that doesn’t require very much work from you.
The earnings you can make from having a roommate depend on things like:
Where your home is (an expensive area? rural?)
The space you are renting to a roommate (for example, do they get their own bathroom? private entrance available?)
To find a roommate, you can share about it on your own Facebook page, put up an ad on sites like Craigslist, or make a rental listing on Airbnb. There are lots of places where you can let people know you’re looking for a roommate.
I have had many roommates in the past when I was younger and had a home with spare bedrooms. I would rent them out to long-term renters and people that we personally knew (such as friends and my sister).
Recommended reading: Tips For Renting A Room In Your House.
4. Airbnbs and vacation rentals
Turning your property into an Airbnb or other short-term rental can be a way to generate extra income. This is when you rent out your space, whether a full house, an apartment, or just a room, to travelers for short stays.
Before starting your Airbnb side hustle, be sure to:
Check local laws: Make sure short-term rentals are permitted in your area. There are many areas nowadays that are more strict when it comes to short-term rentals.
Understand the financials: Calculate potential earnings against expenses like mortgage, utilities, and maintenance.
Set up your space: Furnish and decorate to create a welcoming environment.
Market your rental: Use high-quality photos and create listings on rental platforms like Airbnb and Vrbo.
The amount you can earn can vary, with some hosts making around $5,000 to $10,000 a month or more, but this depends on factors such as location, rental type, and occupancy rates. Always plan for occupancy ebbs and flows – it’s part of the short-term rental business.
5. Real estate photography
If you’ve ever looked at a house listing and thought that the pictures looked awful, then this may be the real estate side hustle for you.
Real estate agents many times hire out for the photography side of selling a house, as they know and understand how important good pictures are.
Real estate photography is all about taking pictures of houses and spaces to grab the attention of people who might want to buy them. Real estate photographers might take pictures of the outside of a house, the backyard, the living room, attic, bathroom, and more.
You can start with the equipment you likely already have, like your smartphone, which can work well because phones these days have great cameras.
How you show a property can really impact a client’s chance of selling it. Your photos are not just pictures; they’re an important part of how the property gets advertised.
As you continue with this real estate side hustle, you might think about getting better equipment (like a real camera!), but for now, practice paying attention to details and getting better at taking pictures.
If you’re thinking about doing something extra to earn money in real estate, photography could be a great choice.
Recommended reading: 18 Ways You Can Get Paid To Take Pictures
6. Real estate drone photography
Drone pilots sell real estate photography services to help real estate agents showcase the properties they are selling.
When property listings include pictures from various angles and heights, it gives a different perspective compared to regular photos. This helps show aspects of real estate that traditional pictures might miss.
When you sell property photography services using your drone, you’re providing a valuable service to real estate companies that want to stand out in a crowded housing market.
Homes are increasingly being sold using drone photos, and it’s understandable because they can showcase the surroundings of a home. Also, potential home buyers can see the entire property and house through a drone picture, giving them a better understanding of what the home includes.
Recommended reading: How To Make Money With A Drone
7. Long-term rentals
A long-term rental is when you rent out a property for a long amount of time, usually six months to a year or even longer. An example would be renting out an apartment or house to a family to live in full-time.
Long-term rentals are different from short-term rentals like vacation homes or Airbnb listings. They are meant for people or families looking for a longer place to live.
A benefit of long-term rentals is the reliable and steady income they can give you. When you rent your property to tenants for an extended period, you set up a regular cash flow of rental payments. This stability can be especially nice for people who are looking for a dependable source of passive income.
Plus, it’s usually less work than a short-term rental, because you don’t have to clean the home every few days or find new people to rent out to.
Recommended reading: How This 34 Year Old Owns 7 Rental Homes
8. Buy and hold for long-term wealth
If you want to grow wealth through real estate, the buy-and-hold strategy is a way to achieve lasting growth. This means buying a property and keeping it for an extended period, benefiting from both its increasing value over time and the rental income it makes you over the years.
Some positives to think about with a buy-and-hold real estate side hustle include:
Appreciation: Over time, real estate often increases in value.
Rental income: It can provide a steady cash flow each month.
Tax advantages: Possible deductions can reduce your taxable income.
The buy-and-hold strategy requires patience and a willingness to handle market changes. It’s a long-term approach, not a quick one, but if you stay persistent, you can create an investment portfolio for future financial stability.
9. Notary services for real estate
If you want to get more into the real estate world without becoming an agent or broker, becoming a notary public can be a way to make extra money.
Many documents, including deeds, mortgages, and power of attorney, require notarization to be legally binding.
With a notarization license, you can provide an important service required for different real estate transactions.
Notaries are important because they help make sure that the people signing documents are who they claim to be to prevent fraud.
10. Rental arbitrage
Rental arbitrage is a way to make extra money in real estate without owning a property. You rent a place for a long time and then sublease it as a short-term rental using platforms like Airbnb.
Here’s how to get started:
Check local laws: You’ll want to make sure your city or state allows for short-term rentals.
Make sure the rental allows for you to do this: Not every rental will be okay with you renting it out. You will want to read your rental contract carefully.
Do market research: Understand the demand for short-term rentals in your target area, such as by looking for locations with high tourist traffic or business conferences.
Potential Benefits
Considerations
+ Strong cash flow potential
– Initial setup and furnishing cost
+ Low startup costs compared to buying
– Dependence on short-term rental market stability
Making money in rental arbitrage comes from the difference between the cost of the long-term lease and the income from short-term rentals. The bigger the gap, the more potential for profit. But remember to factor in the expenses of running the rentals, like cleaning and maintenance costs.
11. House hacking
House hacking is a strategic approach to real estate where you purchase a property with multiple units and live in one unit while renting out the others. This is a side hustle because it can help offset your living expenses through the rental income.
House hacking can be an easy starting point if you want to dip your toes into real estate investing with the added perk of reducing your personal living expenses.
Back when we were living in a traditional house, we house hacked for a little while and had a few different roommates live with us. The monthly rent we collected allowed us to lower our house payments and put more money in savings.
We house hacked with our first house, and it was really great for us. Being able to set more money aside even helped me get ready to quit my job to become a full-time blogger.
If you are looking for a good book on the subject of house hacking, then I recommend reading The House Hacking Strategy: How to Use Your Home to Achieve Financial Freedom by Craig Curelop.
Recommended reading: What Is House Hacking & How To Live For Free
12. Real estate agent
A real estate agent is a person who helps people, like you and me, find real estate to buy or sell. They usually earn their income through a commission, which is a percentage of the property’s sale price.
To become a real estate agent and start this real estate career, you only need a high school diploma and a professional license. As of 2021, the median pay, according to the U.S. Bureau of Labor Statistics, is $23.45 per hour, or $48,770 per year.
And, there are tons of real estate agents who make a lot more money than this.
13. Crowdfunding and peer-to-peer lending
If you want to learn how to make extra money in real estate, then crowdfunding and peer-to-peer lending are areas to look into.
Crowdfunding platforms allow you to invest in real estate deals with a smaller amount of money compared to purchasing property outright. This can provide you with passive income through rental returns or potential property value appreciation.
Peer-to-peer lending platforms enable you to lend money directly to borrowers. You can potentially earn higher returns compared to traditional savings accounts, but there is always the risk of a borrower not repaying the loan.
Both crowdfunding and peer-to-peer lending utilize technology to connect investors with individuals seeking funding.
14. Bird dogging
Bird dogging in real estate can be a side hustle where you help find potentially profitable properties for investors. Your skill in spotting undervalued or distressed properties is important.
Here’s what you usually need to do:
Conduct market research to locate properties that are flying under the radar.
Build a network with local real estate investors who are looking for deals.
Learn to use the Multiple Listing Service (MLS) to spot opportunities.
Typically, you’ll be on the lookout for foreclosures, bank-owned properties, and distressed homes due for a quick sale.
As a bird dog, your compensation usually comes from a referral fee after the investor decides to move forward with your find. Importantly, to perform this role, you don’t necessarily need any initial capital, just the time and skill to identify promising investment opportunities.
15. General contractor
General contractors handle the day-to-day activities on construction sites, overseeing tasks from residential remodels to constructing new homes.
This is typically more of a full-time job, but this can sometimes be done as a real estate side hustle.
As a general contractor, you can choose projects that match your schedule and interests, providing flexibility. Despite the responsibilities, this role allows you to play a central role in turning plans into actual buildings, giving you the potential to make extra money.
16. Flip raw land
Getting involved in raw land flipping is when a person finds and buys undeveloped land to sell later at a profit.
The main benefits include a lower initial investment and less complexity compared to traditional real estate investments, as it doesn’t involve renovation or improvements. There are no buildings, instead it may be a lot or acres of land.
Here’s a step-by-step guide on how to start:
Find raw land – Research areas with potential growth or upcoming developments that could boost land value.
Due diligence – Perform thorough checks on land titles, zoning laws, and road access to avoid legal issues.
Pricing strategy – Your selling price should be attractive enough for buyers yet ensure you make a reasonable profit margin.
Sell and negotiate – Use online platforms to reach potential buyers and negotiate the best deal.
17. Rent out your storage space
If you have unused land or space in your home, renting it out for storage space can be an easy way to make passive income.
People have a lot of stuff, and they will pay you to store their stuff in your unused spaces.
You can sell storage solutions for vehicles, boats, personal belongings, and more. You can rent out your parking space, closet, basement, attic storage, and more.
A site where you can list your storage space is called Neighbor and you can earn $100 to $400+ each month. This depends on the demand in your area and the type of storage space you are renting out.
Recommended reading: Neighbor Review: Make Money Renting Your Storage Space
18. Property manager
A property manager side hustle can be a great way to make extra money.
A property manager is a real estate professional who finds and oversees tenants, collects rent, and handles repairs and maintenance activities. It’s a side hustle that property owners pay for because they may not have the time or skills to effectively manage their own property.
Property managers can manage long-term rentals like apartments, short-term rentals like Airbnbs, and even commercial spaces as well.
I have a friend who is a property manager on the side of his full-time construction job – he manages many different types of properties, from second homes to vacation rentals to someone simply being out of town. He checks on their properties to make sure that everything is running smoothly.
19. Home stager
If you’re passionate about real estate and design, starting a side hustle as a home stager could be profitable for you. As a home stager, your job is to improve the appearance of a home before it’s listed for sale.
This often results in faster sales and higher prices, making your service valuable to sellers.
You can start by staging homes for friends or family, if possible, to build a portfolio. Before and after photos are powerful tools to showcase your work.
You can even provide consultations to homeowners who prefer to do the actual staging themselves. In such cases, your design style can be a more budget-friendly option for a do-it-yourself homeowner.
20. Home inspector
We recently bought a house, and our home inspector was actually a home inspector on the side – this was his real estate side hustle! I think he was a city inspector (or something similar) full-time, so he was very knowledgeable in the area.
Home inspection as a side job can be a strategic move if you’re interested in real estate. This job allows for flexibility since you can set your hours, such as by completing home inspections on the weekends or before or after your day job.
You’ll need to invest in proper training and get licensed, which is a process that can be completed relatively quickly.
The responsibilities of a home inspector include:
Inspecting homes for possible problems, like a leak or bad wiring.
Creating and delivering reports based on what you find during the inspection.
21. Real estate appraiser
Real estate appraisers determine the fair market value of a property, and this process is important in transactions, such as home sales and refinances.
Appraisers assess property values by taking notes on unique characteristics and comparing them with similar properties that have sold recently.
They then prepare reports, detailing findings and providing a valuation that banks and other institutions depend on for loans.
22. Real estate wholesaler
Real estate wholesalers are middlemen who find properties under market value, contract them with the seller, and then sell the contract to a buyer, often an investor. Their profit comes from the difference between the contracted price with the seller and the amount the buyer pays.
Here is a quick summary of what a wholesale real estate side hustle is:
Find a distressed property – Search for properties that can be bought below market value.
Evaluate the property – Determine the After Repair Value (ARV) and estimate repair costs.
Secure under contract – Enter into a contract with the seller, giving you the right to purchase.
Find a buyer – Locate an investor interested in buying the contract.
Assign the contract – Transfer your purchasing rights to the investor for a fee.
By becoming skilled at finding good deals and building connections with trustworthy investors, real estate wholesaling can become a profitable real estate side hustle.
23. Start a real estate blog
Starting a real estate blog (or even a real estate YouTube channel or social media account!) can be a good way to make extra money without having to spend a lot of money.
With a real estate blog, you can write about local market insights, home buying and home selling tips, property investment strategies, home improvement and DIY projects, and more.
I have been a blogger for years, and I really love it. I am able to create my own schedule, decide how I make money online, travel whenever I want, and more. And, it all started on the side of my day job – so I definitely think that a real estate blog can be started as a side hustle.
Learn more at How To Start A Blog FREE Course.
Frequently Asked Questions
Below are answers to common questions about real estate side hustles.
Can real estate be a side hustle? Is real estate a good side hustle?
Yes, real estate can be a lucrative side hustle. Many people do real estate activities on a part-time basis, which can include short-term rentals, getting a roommate, and more, with lower time commitments.
Is real estate worth it as a side hustle?
Real estate as a side hustle can be worth it if you are looking for more income streams and have an interest in the housing market or real estate. As you probably noticed above, there are many different kinds of side hustles, so the amount of money you can earn or the amount of time you will spend will just depend on the gig you choose.
How can realtors make extra money?
Realtors can make extra money by managing rental properties, taking part in real estate crowdfunding, selling real estate photography services, and more.
Is real estate a good side hustle for teachers?
Yes, real estate can be a good side hustle for teachers. There are many options that may work for a teacher.
For example, some teachers work as real estate agents on the side. This is possible because you can handle listing and selling homes during weekends, breaks, evenings, and over the summer. However, keep in mind that selling homes might pose challenges, as clients may require your full attention during the day, which could clash with your teaching commitments.
You can find more ideas at 36 Best Side Jobs for Teachers To Make Extra Money.
Which licenses might be required to pursue a side hustle in the real estate field?
Depending on the side hustle, certain licenses like a real estate license may be required. For example, to become a real estate agent or home inspector, you’ll need a specific license. However, if you’re looking into just getting a roommate, then you may not need a license. It all just depends on the real estate side gig you are interested in.
How to make money in real estate without ever buying any property?
As you learned above, you don’t need to personally buy or own real estate in order to make money in real estate. You can invest in REITs, become a notary for real estate transactions, include affiliate marketing for real estate products on a blog, and more.
Real Estate Side Hustles – Summary
I hope you enjoyed this article about real estate side hustles.
Picking the right side hustle gig in real estate might feel overwhelming because there are many choices.
Some people might like jobs where you have to do more, like fixing up houses or taking care of Airbnb rentals. Others might prefer making money without doing much, like through REITs or renting out a spare room.
Whatever you’re into or however much money you have to invest, there are probably real estate side business ideas that fit with what you have and what you want to achieve.
What do you think is the best real estate side hustle?
My wife and I moved out of our former primary residence a year ago, and we have been renting it out for $4,000 a month. Our current tenant is moving out next month and we will need to find a new one.
The house is probably worth about $750,000 and we have a $450,000 mortgage on it, which we managed to refinance when mortgages were rock bottom at 2.5%.
Should we plan to sell the house in two years in order to get the capital gains tax exemption, and then use the proceeds to buy a new investment property?
Or would we be better off keeping the property, continue renting it and abandon the tax exemption in order to hold on to our low mortgage?
Looking for Opportunities
‘The Big Move’ is a MarketWatch column looking at the ins and outs of real estate, from navigating the search for a new home to applying for a mortgage.
Do you have a question about buying or selling a home? Do you want to know where your next move should be? Email Aarthi Swaminathan at [email protected].
Dear Looking,
You have a 30-year mortgage at a rock-bottom rate of 2.5% that you will possibly never see again in your lifetime. Why are you in a rush to sell?
If you are trying to get ahead without paying taxes, you have time, but how much time is the question.
The biggest challenge with waiting to sell is that your home could appreciate significantly, and you may not qualify for the capital gains tax exemption of $500,000 when filing jointly with your spouse.
You don’t say how much you bought it for, but even if you had bought it for $500,000 and the home is $750,000, you’ve still got time before hitting that cap of $500,000. As long as you don’t exceed that, and the government does not change that number, your plan to wait and sell makes sense.
As you’re looking to buy a new investment property, consider doing a 1031 exchange. With a 1031 exchange, you can sell whenever you want, and defer paying taxes on the profit. The “catch” is you need to move that money into another investment property. Plus, you may have to take on a new mortgage.
Factor in the new rate and the potential rental income, and see if the math makes sense. If that other investment property you’re looking at doesn’t net you the same or similar profit as your current rental, then don’t sell.
The bottom line: Unless there’s a strong reason for you to sell independent of taxes — perhaps you need the extra money, or you are sick of dealing with tenants, for instance — it seems like the best move would be to hold on to the home, or try to swap it out for another.
And don’t just take it from me. “There is no hurry to sell,” Ed Fernandez, president and CEO of 1031 Crowdfunding, a company specializing in 1031 exchanges, also advises.
“You can always capture the gains any time after two years, but in this scenario, it looks like the cash flow you are receiving from the current mortgage might be better than any opportunity you would have to go out and buy in the current market environment,” he added.
That’s two opinions in favor of retaining your rental. The third opinion? That’s up to you.
By emailing your questions, you agree to having them published anonymously on MarketWatch. By submitting your story to Dow Jones & Company, the publisher of MarketWatch, you understand and agree that we may use your story, or versions of it, in all media and platforms, including via third parties.