Returning home with a suitcase full of souvenirs can be one of the highlights of a trip. You might travel specifically to buy clothes, such as some folks who head to Hoi An, Vietnam, which is known for its tailor-made clothing. Or you might come from Japan with a case of Kit Kats in bold flavors like red bean and Japanese sweet potato, plus other unique gifts for the folks back home.
Some travelers might have to limit the momentos they buy because of financial constraints. But others are bound simply by what fits in the suitcase for the flight home.
With these three packing tips, you’ll not just avoid overpacking, but you’ll make room for souvenirs, too.
1. Don’t pack items you’d want a souvenir version of
You may have seen the somewhat cliche lists of things you likely never need to pack, like toiletries, towels or hair dryers (most hotels provide these things for you). But what about the items you do need — the ones that are perfectly logical to pack, like shirts, sunglasses and hats?
If you’re the kind of person who’s likely to buy souvenir versions of these items, then rethink how many of them you bring with you to begin with. If you pack one or two fewer shirts, for example, you can buy a couple at your destination, wear them while traveling, and bring them home as souvenirs.
2. Rent clothes upon arrival
A new service has popped up in the travel industry, offering to deliver personally styled rental clothes to your hotel. Travelers wear these temporary duds throughout the trip and leave them behind at the hotel upon checkout.
Trvl Porter lets you pick items to rent at $65 each (with a two-item minimum) for up to two weeks and takes care of the shipping costs both ways.
Some major hotel and airline companies are getting in on the trend too.
In July 2023, Japan Airlines launched its “Any Wear, Anywhere” clothing-sharing service. Customers go online and input criteria like size, style and how many items they want (the minimum is three tops plus two bottoms per rental), which generates a bundle of clothes for them to rent.
And it’s not too expensive either. The lowest-priced bundle costs 4,000 yen (about $27). For now, though, the service is only available to passengers on international, JAL-operated flights and is just a trial project, scheduled to end in August 2024, according to Japan Airlines.
Meanwhile, W Hotels Worldwide, a Marriott brand, has a partnership with Rent the Runway where clothing orders are delivered to travelers at the hotel (and returned to the hotel’s front desk at checkout). This service lets customers pick any four items from a selection of Rent the Runway clothing for $69. Separately, Rent the Runway also offers one-time rentals that might be ideal if you’re looking for something you’d wear only once during the trip (like a suit or formal gown), which would allow you to pack less.
3. Pack old clothes you want to part with
Bring apparel that you were about to donate or throw away anyway. Make your vacation the last time you wear it — and then leave anything too tattered to wear again in the trash. For clothes that are otherwise in good condition (perhaps you’re ready to part with them because you want a closet refresh), look for local thrift stores to drop off donations. Local places of worship might also take quality second-hand clothing donations.
Why you should avoid overpacking
A heavy suitcase can be cumbersome to lug around, particularly if you’re trying to roll it over cobblestone streets in Europe or sprint with it to catch a departing train.
Bringing more than what fits in carry-on means you’ll likely pay airline checked bag fees (though that’s avoidable with certain levels of airline elite status or by holding certain airline credit cards).
If you do check bags, you’ll spend precious vacation time waiting at the baggage carousel. And there’s still the risk that your stuff will get lost. Even protections like lost luggage insurance, which can refund the cost of what went missing, can feel like a poor consolation prize if you lose irreplaceable items like a camera (and the memory card or film inside), or tough-to-get items like the Japanese Kit Kats you flew across the ocean to collect.
By returning with very few of the same items you departed home with, you’ll not only leave plenty of room for souvenirs, but you also might be able to make it all the way home with carry-on bags only.
How to maximize your rewards
You want a travel credit card that prioritizes what’s important to you. Here are our picks for the best travel credit cards of 2023, including those best for:
Before you move your life into a new rental, you need to look over your new digs with a fine-tooth comb to make sure everything is on the up-and-up, clean and safe. Don’t put off an apartment inspection.
What is an apartment inspection?
Think about renting an apartment like buying a used car. Someone has had the item in their possession before you. Whether they used it properly and are passing it on in good condition isn’t always easy to tell. You’d take a used car for a test drive, ask about past accidents and repairs and eyeball every scratch, mark or dent. An apartment inspection that ensures you’re getting what you expect in your next home.
An apartment inspection should take place before you sign your lease. “This can help avert or minimize disputes with your landlord in the future about the condition of the property, as well as providing you with a safer, more pleasant place to live,” according to Justia.
Not only does completing an apartment inspection ensure everything gets fixed and to your liking, it also prevents your property manager from claiming any pre-existing issues are your fault or responsibility when it’s time to move out. Your property manager may even have time to address the specific issues you find before you move into the apartment.
So you know what you’re looking for, here’s a breakdown, by room, for your apartment inspection. Focus on each section of the apartment separately to give it as close a once-over as possible. Look at issues:
You can take our apartment inspection checklist with you too. Download it here.
Throughout the apartment
Each room will have its own items to inspect, but certain things should get examined throughout the apartment. It’s best to start with these since you’ll need to remember to check them out as you move from room-to-room.
1. Walls
Check for cracks, structural holes or evidence of water leaks, especially around windows and vents. If you find small holes from pictures and the like, note these so you property manager is aware they’re pre-existing.
While looking for issues, also check out the paint job. It should feel professional, with no drips or chips along the wall. Paint color should also consistently match throughout the apartment. Don’t forget to do the same inspection on the ceilings.
2. Electrical outlets
Make sure every plug in the apartment works. Plug something small (like a nightlight) into every outlet to check that it’s functioning. Make sure you don’t smell anything either. Look for burns around outlets and cracks in the covers.
3. Cable hookups
Check that all cable, internet and fiber optic outlets are in good condition, not blocked and in the areas of the apartment where you need them. If the apartment has a satellite dish, check that it’s secure and there are no leaks or holes around the connection to the unit.
4. Smoke detectors
Be sure smoke detectors exist in or near each bedroom, by the front door and by the kitchen. Test them to make sure they all work properly. Ask your property manager when the last time the batteries got replaced and the age of each smoke detector. Batteries should be changed every year, and the entire device should get replaced every 10 years.
Find out if fire extinguishers, carbon monoxide or radon detectors are also within the apartment, and make sure they’re in working order.
5. Lighting
Turn on all lights in all rooms to ensure everything works. Look for cracks or burn marks around light fixtures and recessed lighting. Ask your property manager to replace any burnt out bulbs before you move in, especially if the fixture is hard to reach without a ladder. That’s a job for maintenance, not you.
6. Thermostat
Check to make sure the temperature reading on the thermostat feels like the temperature in the room. Examine other rooms to see if the temperature is consistent throughout the apartment.
Turn up the heat, and check vents for heated air. Then do the same for the air conditioning. If the apartment has a radiator for heat or a window unit for A/C, check those, as well.
7. Blinds and shades
Inspect each set of blinds, shades or curtains for damage or holes. Open and close blinds and shades to ensure they are in working order.
8. Windows and doors
Run your hand along the frame of each window and door to feel for leaks or drafts. Inspect any insulation for cracks or brittleness. Determine if you can see light through any cracks in a closed door, indicating poor insulation.
Open and close the windows and doors to ensure they work properly. Make sure all windows and doors lock completely and feel secure when you pull on them. You should never have an apartment window that does not lock.
9. Flooring
Inspect all areas of the floor and carpet (including behind any furniture and in corners) for stains or holes. Get down and check for pet or other smells. Tug on some of the edges of the carpeting and floorboards to see if they come up too easily. Look around for improperly installed flooring nails that have popped up. You don’t want to step on those babies in your bare feet.
10. Overall cleanliness
As you’re conducting your simple and thorough visual inspection, take note of the overall cleanliness of the apartment. Look around for small brown pellets or insect eggs, evidence of roaches, other insects or rodents. You may find these in gaps in the walls, the bathtub and around plumbing and utility wires.
For furnished apartments, extend your cleanliness and damage checks to all furniture.
In the bathroom
Bathrooms are sneaky places when it comes to problems. With pipes hidden inside cabinets, you might not notice a leak. Tile cracks or issues with grout can be small when you move in, but quickly get worse. Out of all the rooms in an apartment, this one deserves a very close inspection. Don’t forget to check everything.
11. Toilet
Flush the toilet and make sure it works. The bowl should refill properly and quickly, and it should stop running in sufficient time. Lift up the lid on the back of the toilet to make sure nothing is damaged or broken. Sniff for bad odors, and look for cracks and nicks, especially where the toilet meets the floor. Check that the seat is sturdy, as well (how you choose to do that is up to you).
12. Sink
Turn on all faucets, and check water pressure. See how long it takes the hot water to heat up and the cold water to get cold. Be sure there are no drips or leaks both from the faucet and the plumbing underneath. Even small drips over time can balloon your water bill. Look for cracks both in the bowl and the pipes.
13. Shower
Turn on the water, and see if the temperature heats up in sufficient time. If you feel comfortable leaving it on, let the water run to determine how long before you lose hot water.
Check that the water pressure meets your personal needs, and there’s no excessive dripping after you turn it off. Make sure the water looks clear and clean and drains properly. Examine the tiles and grout for mold and chips.
14. Tub
If you have a bathtub, stand in it and jump (safely) around a bit. If you feel any give, it could be a sign of damaged flooring or mold underneath. Pull gently on the soap dish to make sure it’s secure, especially if you tend to put your foot up on it to balance for cleaning or shaving. Make sure water runs properly out of the tub faucet and the drain closes for when you want to take an actual bath.
15. Storage
Look under the sink to check that the storage area is clean and dry and nothing is blocking access. Check for signs of rodents or insects.
Medicine cabinets should open and close easily, and shelves should seem secure and clean. Test the sturdiness of the shelves of any built-ins, as well.
16. The rest of the bathroom
Examine the floor and tiles for damage or mold. Look carefully in corners. Assure yourself any hardware attached to the walls is secure. While you’re checking the toilet paper holder, also make sure you can reach it from the toilet.
In the bedroom
You may not realize it, but you’ll spend the most time in your apartment in your bedroom. Yes, you’ll usually be asleep, but that doesn’t mean you should ignore it during your apartment inspection. In particular, don’t forget to check the spaces that seem most unlikely to have a problem, like the closet.
17. Windows
We already mentioned windows, but it’s doubly important in the bedroom. Run your hand along every edge of the window to check for space for leaks. In the bedroom, poor insulation can mean a very cold night. Check the locks on the windows to affirm you’ll get a safe night’s sleep.
18. Closet
Take a close look at the floor to ensure there’s no damage, and check all built-ins for sturdiness. If you have permanent hanging rods, tug on them slightly to make sure there’s no give.
Closets are dark and favorite hiding places for rodents and roaches. Use a flashlight if necessary but look around for rodent and insect droppings. Also, be sure the door, or doors, open and close easily.
19. Bed
In a furnished apartment, check every part of the bed for damage, cracks, loose bolts and evidence of bedbugs. Bedbugs aren’t very discreet, so if you see any dark staining on the mattress or bed frame, there’s a good chance there was an infestation at some point.
20. Ceiling fan
If you’re fortunate enough to have a ceiling fan in the bedroom, turn it on and off and try all the speeds. Does it rattle or wobble when it’s on high? If so, make sure it’s fixed before you’re nocturnally impaled.
21. Floors
Inspect the floor or carpet around where the bed would go, and make sure there aren’t carpet dents or floor damage from a previous bed. The bedroom is where pets like to sleep and do other things they shouldn’t do, so get your nose down to the floor and smell around for any pet odors.
In the kitchen
There are a lot of moving parts in the kitchen. For an apartment dweller, it’s where most of the functional appliances are located. In addition to making sure they all work, don’t forget to inspect the rest of the space.
22. Oven and stove
Turn on the stove to make sure it heats up as quickly as expected. Open and close the oven door a few times to ensure a good seal. On an electric stove, turn on every burner to make sure they all work and the heating elements all get hot. You can test this by dropping a splash of water from your hand onto each burner.
For gas burners, check that each burner lights without too much effort or releasing a lot of gas. Run the drop of water test, too. Make sure all burners go out and get cold when you switch them off, and you don’t keep smelling gas. Lift the hood and check the trays.
23. Sink
Turn on the water and check the pressure. Make sure the hot gets hot and the cold gets cold. Turn on the garbage disposal (with water on) for at least 15 seconds and listen to see if the sound is smooth and consistent. Try disposing something, like ice, if you wish. Check for odors afterward. Look around the base of the sink and underneath for water damage or cracks.
24. Refrigerator
Check all the stripping around the doors to make sure there’s a proper seal. Loose or dry sealing must get fixed. Open and close the doors. Feel inside the fridge and freezer to make sure they seem cold enough. See if all the lights turn on (sadly, you won’t be able to see if they turn off). Look for missing or cracked trays and shelves. Test the ice maker not only for proper operation but that the ice cubes smell and taste right.
25. Cabinets, counters and drawers
Open and close every door and drawer to see if they’re loose or squeak and if they’re flush on their hinges. Inspect every cabinet and drawer for animal droppings. Look around for cracks and signs of water damage.
26. Miscellaneous kitchen appliances
If luxury living is your style, you may have a few extra appliances. Don’t leave them out of your inspection.
For built-in microwaves, check that the door closes all the way and it operates correctly
Make sure the dishwasher doesn’t have any leaks or odd odors. Turn it on and wait for the water to run before turning it off.
Check that all recessed lighting works properly
Look in tough-to-reach places for floor damage, especially under and around the refrigerator
In the utility closet
Don’t forget about your utility closet. If it’s locked, insist your property manager open it up for you to inspect. Anything goes wrong in there, you’ll have major issues with your apartment, so look closely.
27. Heating and air-conditioning
Inspect your hot water heater and the HVAC unit. With the furnace or air on, put your hand over the vent to check the air pressure and temperature. See if there’s water pooling in the hot water heater tray. Inspect all hoses, and look around for water damage or leaks. Take out the HVAC filter, and note if it needs replacing. It will look gray if it’s dirty, white if it’s clean.
28. Fuse box
Open up the fuse box, and see if everything looks okay. Fuses should all be on with nothing tripped. Each fuse should also have a clear identification should you need to flip something while you’re living in the apartment.
You don’t have to trip every fuse, but see if there are any missing or damaged switches.
29. Laundry
If you have in-unit laundry, inspect the washer and dryer. Check that all the hoses and exhausts are attached and working. Look for blockages, and check that the lint trap in the dryer is in good condition. Start each appliance to see that they work. Watch for water stains and mold, and check for any odd smells.
In the building itself
Now that you’ve taken your time checking everything out on the inside of your apartment, give yourself the opportunity to inspect what’s on the outside. Even if it’s not technically part of your apartment, you want everything around it in good condition.
30. Exterior doors
Recheck all the locks on exterior doors whether they open into hallways or outside. Check for air leakage and if there is any, get it fixed, or expect a big electricity bill.
Be sure you can properly use the peephole, that it’s not painted over, and nothing is blocking it. This is an overlooked part of the security inspection, so don’t forget about it.
31. Exterior windows
Windows get a second check, too. Recheck the outdoor ones for air leakage. Triple check they all lock properly, especially if you’re on the first floor. Look for cracks or loose panes. Check all the windows for properly-installed screens, and assure there’s no damage or holes or you’re going to have a buggy summer.
32. Porches, decks and walkways
No matter what kind of exterior elements you have (if you’re fortunate enough to have one), check all wood and concrete for cracks and water damage. Feel around any gates, fences, posts or handrails for stability and safety. Look around for branches or tree limbs that are in danger of falling on your property (or on you).
33. The rest of the outside
Test that all exterior lights are in working order, whether outside on a post, attached to the building or in the hallway. If there’s a security system, make sure you know how it works and test it before you need it. Wherever your mailbox is located, make sure you can get into it, the key works and — if freestanding — it’s not in danger of falling off or over.
A proper apartment inspection makes a difference
While it may feel tedious, a careful apartment inspection is good for everyone. It ensures you’re getting the apartment you expect, headache-free from immediate issues. Not only that, it means your property manager is getting a tenant who takes the care and maintenance of their home seriously. It’s a win-win even if it doesn’t feel like it at the time.
This is why, before you sign a lease or move in, grab your apartment inspection checklist, and set aside a block of time to closely examine your new home.
Whether you’re moving out of your parent’s house or leaving the dorm life behind, becoming a first-time apartment renter is a big and exciting step. However, if you don’t know the ins and outs of the rental process, the task can seem overwhelming. Luckily, we at Redfin put together a list of 8 key tips to help first-time renters find their perfect first apartment and make the transition as smooth as possible. Whether you’re renting an apartment in Los Angeles, CA, or in Brooklyn, NY, these tips will be invaluable in your journey to securing the ideal rental space.
1. Your budget needs to cover more than just rent
If you’re a first-time apartment renter, knowing how to budget for your first apartment is crucial. Your monthly rent will, of course, be the most considerable expense you need to account for, but there are other one-time and ongoing fees that you should be able to pay. Let’s take a look at these costs more closely.
Initial, one-time costs
Before moving into your new apartment, you should save enough money to pay for the following upfront costs:
Recurring costs
Once you’ve moved into your first apartment, there are several ongoing expenses you’ll need to cover every month:
Rent
Utilities, such as electricity, garbage, water, sewage, etc.
Internet and phone
Parking
Laundry
As a first-time apartment renter, this might be the first time you’re responsible for these types of expenses. The last thing you want to do is misjudge what you can afford because you forgot to factor in these essential components of your cost of living.
2. Make a list of needs, then prioritize them
Start with your dream apartment – what is your ultimate living situation? While you may not end up with everything on your list, it’s essential to understand what you value in your home. Some common needs for first-time apartment renters are:
Functional kitchen
Balcony, patio, or other private outdoor space
Closet and storage space
Proximity to work, nightlife, dog parks, or other amenities
Natural light and direction of exposure
Air conditioning
Building amenities, such as a gym, rooftop, or business center
Once you have your list, prioritize the items from most to least important. This will help you narrow down your choices and choose between similar properties.
3. Ask a lot of questions during apartment tours
There are some things you just need to know when you’re shopping for apartments. You may direct these questions to your prospective landlord, or you might have to do some research on your own. Here is a list of must-ask questions, but you may choose to add others depending on your needs.
How much is the rent?
Are utilities included? If not, how much do they usually cost?
How much is the security deposit?
How do I pay rent and utilities?
Is there a parking fee?
Is the apartment pet-friendly, and if so, what are the associated fees?
Are any deposits or fees refunded at the end of the lease?
Do I need proof of renters insurance?
What’s the application process, and is there a fee?
How long is the lease term?
How often does rent increase and by how much?
What alterations can I make to my apartment?
How is apartment maintenance dealt with?
Is there a property manager?
Am I responsible for any maintenance?
What amenities are available nearby?
Are there any particular policies I should know about?
These questions are just the beginning. You likely have special needs or preferences that should inspire additional questions. Keep a list of these questions with you when touring, along with a way of recording the answers.
4. Know the rental application requirements
Each apartment will have a different rental process. Generally, your process will include some or all of the following:
Fill out an apartment application
Show proof of income
Complete a credit check
Complete a background check
Provide rental history with the landlord’s contact information or a personal reference
Add a co-signer if you have a low credit score or no credit history
Include an optional cover letter
To show proof of income, you’ll likely need to provide your most recent pay stubs. You can also use an offer letter or letter from your employer if you’re moving for work. Many landlords or property management companies want to see that you have a reliable monthly income appropriate for the rent payment. While it depends on the apartment, there is often an income requirement that the renter needs to make 2 to 3 times the monthly rent amount.
5. Clarify the parking situation
Some rentals come with a designated parking area or parking spot(s). If you plan to live with a roommate and you both have cars, are there enough parking spaces to easily accommodate both of you? When there are not enough parking spaces or tandem parking, roommates will often switch off week to week or find another acceptable compromise. If the apartment complex does have parking spaces, be sure to ask if this comes at an additional cost. Parking fees are becoming increasingly common at rental properties.
On the other hand, many apartments don’t come with parking, especially in bigger cities like New York City or San Francisco. In this case, pay close attention to the street parking. The street parking signs will tell you which days or times of day parking is limited or prohibited (usually for street-sweeping or snow plowing). But you should also note how many parking spaces are free on your street— is there plenty of room or are cars packed bumper to bumper? Streets with cars parked close together usually mean that parking is difficult to find.
6. Know the best time of year to rent an apartment
You can’t always control when you need to move, but if you do have flexibility, choosing the right time of year to rent an apartment could have a large impact. If your main concern is price, you’ll want to look for an apartment during the winter months. Typically, most people move in the summer months (college students moving away from home, etc.), so demand and prices are typically highest during this time and lowest in the winter. Keep in mind that while rent prices may be lower, there might not be a large selection of apartment complexes with availability.
On the other hand, if your ideal apartment is your top priority, then moving during the summer may be a better option. Most renters sign 12-month leases in the summer. Therefore, most leases usually also end around that time. This means the highest number of new apartments are coming on the market, so you’ll have plenty of options to choose from. The main downside here is that rent prices will typically be higher, and you’ll need to act fast before the best apartments are off the market.
7. Thoroughly read and understand the lease agreement
As a first-time apartment renter, reviewing your lease agreement is one of the most important steps to getting your apartment. Though the lease may contain complex language, it will outline the most important agreements you’re making by signing it. Here are a few things you should make a note of:
The length of your lease
The pet policy and any special terms (like additional fees)
Deposit requirements and how your deposit is returned
Sub-letting rules
Utility responsibilities
Maintenance procedures
Liens or claims to your property if you don’t pay rent
When in doubt, having your lease reviewed by a landlord-tenant attorney is a great idea. The attorney will be able to catch any illegal provisions, explain how provisions work, point out unfavorable provisions and their consequences, and suggest changes that provide you with a more favorable lease.
8. Get renters insurance
In many cases, carrying renters insurance may be required by your landlord, especially if you’re a first-time apartment renter. Even if it isn’t, it’s still a good idea to have it – regardless of if you’re a long-time tenant or a first-time apartment renter. A renters insurance policy protects you in three significant ways:
Personal property protection: If someone steals, damages, or destroys your personal belongings, you will receive a payout (minus the deductible).
Personal liability: If someone gets hurt in your home, renters insurance will pay for medical bills and lost wages, depending on the terms of your policy. You may also be covered if you end up in a lawsuit.
Loss of use: If your apartment becomes uninhabitable, loss of use coverage pays for your expenses, up to coverage limits, while you live outside your home.
Always be sure to review your policy carefully. It’s a good idea to create an inventory of your personal belongings so that you both have a record of what you own and ensure your coverage limits are high enough to protect you in the event of a total loss. If you are unsure about any part of your insurance policy, speak with your agent.
A final note on renting your first apartment
Searching and finding a perfect apartment rental requires some diligence, patience, and preparation. By following these tips, you can avoid possible pitfalls and make your apartment hunting process as seamless as possible, especially if you’re a first-time apartment renter.
Want to learn how to invest in self-storage? I have stored boxes of my stuff plenty of times over the years and there’s a good chance that you have as well (or perhaps you know someone who has). Investing in self-storage facilities can be a relatively low-risk asset for people looking to diversify their income…
Want to learn how to invest in self-storage?
I have stored boxes of my stuff plenty of times over the years and there’s a good chance that you have as well (or perhaps you know someone who has).
Investing in self-storage facilities can be a relatively low-risk asset for people looking to diversify their income streams. Or, perhaps you’re looking for a full-time income and are looking for your own business to start!
So, what exactly is investing in self-storage?
It is when you put your money into self-storage facilities and rent out units to renters.
I have personally used self-storage facilities for many reasons over the years for a short-term period, and nearly every single time I think about the profitability of it all and how passive it seems to be a self-storage owner or self-storage investor.
There are usually no customers at the facility (I’ve almost always been the only one there when dropping off or picking up), but every unit is being rented. Seems like an interesting way to make money with not too much work!
Plus, over 9% of households pay for self-storage units, and there is a lot of demand for new facilities.
Quick Summary
Self-storage investing can be a way to make money and run a business with low expenses
There is a lot of demand for storage units, with many businesses having a very long waitlist
If you don’t want to run a business, you can also buy shares in an REIT or even just rent out your garage or basement
What is Self-Storage Investing?
To put it simply, self-storage investing is when you invest in storage facilities.
More and more people need storage units for many different reasons such as moving, downsizing a home, needing a place to store something that a person doesn’t have room for (such as an RV or boat), or even businesses that are storing extra inventory.
For example, someone might need a short-term lease to store their belongings due to being in between homes (like if they are moving but their next home isn’t ready yet). Or a person on a long trip may decide to sell their home, but they need a place to store their important items.
If you decide to invest in self-storage, you have a couple of options. You can start by purchasing and owning a facility yourself or passively invest by buying shares in a self-storage REIT (Real Estate Investment Trust). I will be going over each of the options further below.
Related content:
Is Self-Storage a Good Investment?
Yes, deciding to invest in storage units can be a good idea.
According to Neighbor, the average profit margin on a self-storage unit is around 41%, and they typically have high occupancy levels of around 92%.
One of the main positives of investing in self-storage is being able to earn income with less work (you’re not dealing with customers all day long – people tend to store their stuff and not visit it often).
Self-storage facilities usually have low expenses compared to other types of commercial real estate investments. Also, self-storage is usually recession-resistant as people still need to store their stuff.
Another benefit of investing in self-storage is the flexibility it offers because you don’t need very many employees to run a storage lot. Some lots that I’ve been to don’t even have any employees – instead, you call the owner when you want to get your stuff and they then send someone down. People tend to store their stuff and not touch it for a while.
Related: 18 Passive Income Ideas To Earn $1,000+ Each Month
Types of Self-Storage Facility for Investment
When investing in self-storage facilities, you may not know that there are a few different types.
This section will discuss the different self-storage facilities you can invest in.
1. Climate-Controlled Storage
Climate-controlled storage is something that more and more people want these days because it can protect their belongings from temperature changes and humidity.
After all, many places get very hot weather, and storage units can get quite hot inside. You don’t want your things to melt into each other.
These types of units are good for storing items like electronics, artwork, or documents.
Now, your location is important in deciding if you need climate-controlled self-storage, as areas with extreme temperatures or humidity obviously will need AC more. For example, a storage facility in Florida may be more likely to have air conditioning than a facility in Alaska. And, a facility in Alaska is more likely to have heat than a storage unit in Florida.
2. Mixed-Use Storage
Mixed-use storage facilities combine multiple types of storage units in one location.
For example, these types of facilities may have climate-controlled, drive-up, boat, and RV storage all in one place. Many storage facilities are like this. They cater to different customer needs and tend to have a broader target market due to being able to store so many different types of items.
People tend to like these forms of storage as they can store all of their belongings in one place, instead of having their stuff scattered across town.
3. RV and Vehicle Storage
With so many people owning RVs and extra vehicles, the demand for storage has increased over the years.
Also, many neighborhoods simply do not allow for RVs or extra vehicles to be parked in front of their home (or even in their driveway, backyard, etc.), so a storage lot is needed.
Some storage facilities may even just be massive warehouses where people can store their RVs, valuable cars, and boats inside.
We have stored an RV in a place like this many times. We have found the typical rent to be around $5 to $10 per foot for our RV in an indoor parking lot, so you can see how quickly storage revenue can add up! Some businesses even have private RV units, and those fetch a much higher rate, such as $400-$600+ per month.
4. Boat Storage
Boat storage facilities specialize in safe storage for boat owners during the off-season or when not in use. These types of facilities typically have long waitlists too.
Boat storage businesses sometimes have both indoor and outdoor options (or they may focus on one or the other), as well as extra services like boat maintenance, hauling, launching, and more.
Coastal regions or areas with nearby water access (such as Florida) are usually good locations for investing in boat storage facilities as there are more boats, of course.
We have used boat storage facilities many times over the years to store our own boat. The amount you can make per boat can be anywhere from a couple hundred to a couple thousand dollars each month, depending on the location and the type of boat (catamaran vs. small fishing boat, for example) you can store. We have paid anywhere from around $1,200 to over $2,000 a month in the past for boat storage.
5. Drive-Up and Outdoor Storage
This is the type of storage that pretty much everyone has seen, as they are very common.
With this type, customers can drive directly to their storage unit, making loading and unloading much easier. These types of facilities are usually single-story buildings. Many times they do not have AC or heat.
Drive-up and outdoor storage facilities give renters an easily accessible storage solution.
How to Invest in Self-Storage
If you want to invest in self-storage, there are a few different ways to do so.
1. Buy an Existing Self-Storage Facility
One of the easiest ways to enter the self-storage market is by purchasing an existing business, such as those for sale by mom-and-pop operations.
This can save you time as everything is in place and you already have customers with rented units. Yes, you can improve some of their processes, but a lot of the hard work is already done for you.
But, purchasing a facility can be expensive upfront, though, because you will be buying a business with land, a building, and an existing customer base.
Just as an FYI – As you’re looking for storage facilities that are for sale, you may come across different classes. Class A facilities usually are higher-quality climate-controlled storage units, whereas Class B and Class C facilities may be lower-quality.
Buying an existing storage lot can possibly make you more money than investing in REITs (discussed further below), but it also means more hands-on management and responsibility because you will be actively running a business and managing employees.
2. Build a New Self-Storage Facility
There are around 2 billion square feet of storage space in the U.S. alone, but there is a high demand for more. Many self-storage facilities have long waitlists even!
I have called many storage lots only to find out that they had waitlists that were years long. I have even several times called every single lot within a few state radius, and found that every single one had a waitlist.
Yes, the storage business is really in that much demand!
As a self-storage investor, you can take advantage of this high demand and build your own storage facility.
To create a self-storage facility from the ground up, you will need to do the following:
Find land to buy – Once you know that an area needs a storage facility, you will need to find land to buy to build on. You will also want to make sure that it is easy to drive to (for example, if you are building an RV storage lot, you don’t want low bridges as the only way to get to your lot because no one will be able to get there then).
Build – After you buy the land, you will need to think about what you want your facility to look like, then hire a construction company to build your plan.
Open up for business– Once the facility is built, you will need to market it and get customers. You will also want to set up the systems to manage daily operations effectively and as passively as possible.
Self-storage is in demand, so building a new storage business can be a way to get started and make money.
3. Buy Shares in a Real Estate Investment Trust (REIT) That Focuses on Self-Storage
If you want to invest in self-storage without actually owning and managing a business, one way is to invest in an REIT.
REITs are a type of investment that allows you to buy shares in a company that owns self-storage facilities. Think of it like shares of stock in a company that you can buy.
With REITs, you can invest in a portfolio of self-storage properties without physically owning or managing the facilities yourself.
This is more passive because you don’t need to hire employees or do maintenance checks.
4. Rent Your Space on Neighbor.com
If you have extra space in your own home such as a garage, closet, driveway, or spare room, you can rent it out as storage space through a platform like Neighbor.
With this site, you can earn $100 to $400+ each month (the rate you can get depends on demand in your area and the type of storage you are renting out).
Here’s how Neighbor works:
Sign up for a free account – Create an account on Neighbor by clicking here.
Describe your space – Write a detailed description of your space, including the dimensions, location, and any features (such as air conditioning or heat). Add pictures of the space as well so that potential renters can see what you are renting out.
Set your price – Choose how much you want to charge for renting your space.
Manage rentals – Connect with interested renters, agree on terms, and manage ongoing rental contracts, all through the Neighbor platform.
You can learn more at Neighbor Review: Make Money Renting Your Storage Space.
Advice for managing a self-storage facility
If you decide to run your own storage facility, then here are my tips for new self-storage operators.
Making money from self-storage
To make money from your self-storage facility, you need to think about what your customers want. So, you may sell amenities to your renters, such as vehicle washing, starting up their vehicle or checking on it, electrical plugins to charge vehicles or RVs, and so on.
You’ll also want to think about how much money it will cost you to actually run the business. Will you need to hire workers? How much will maintenance cost you so that you can keep the facility in good condition?
Security in self-storage facilities
Security is very important for customers when choosing a self-storage facility. Customers care about their stuff and they don’t want anything happening to it, such as it being stolen.
So, you will want to make sure that your facility has a lot of light (especially at night time), security cameras aimed at different angles, and gates with codes. This helps your customers feel safer about leaving their stuff at your storage facility, and also helps to protect your business from liability issues and bad reviews (for example, if a person has their stuff stolen from your facility, they are likely to leave a bad review and this can cause others to not use your storage units as well).
Frequently Asked Questions About How To Invest In Self-Storage
Here are answers to common questions about investing in self-storage.
How can I find a self-storage business for sale?
To find a self-storage business for sale, you can start by searching on websites like LoopNet and BizBuySell. I took a quick look at both of these sites and found many for sale quite easily from anywhere in the hundreds of thousands to in the millions of dollars price range.
What are the best self-storage stocks to invest in?
The best self-storage stocks for you to invest in will depend on your own money goals and the amount of risk you want to take on. Unfortunately, I cannot tell you which is the best self-storage stock, as I am not your financial advisor and I do not know your specific situation. But, I can tell you which ones are popular.
Some of the most popular and best self-storage stocks include Public Storage (PSA), Extra Space Storage (EXR), and CubeSmart (CUBE).
Which self-storage REITs have the best returns?
Real estate investment trusts (REITs) are a popular way to passively invest in self-storage facilities. Several well-known self-storage REITs include Life Storage (LSI), National Storage Affiliates (NSA), and Simply Self Storage (SSS).
Keep in mind that past performance and dividends do not mean that the same will be true in the future, so it’s important to do your own research.
What risks are there with investing in self-storage?
Like with all businesses, there are risks when it comes to self-storage. Some risks include competition, changes in demand, and possible natural disasters that could hurt the facility (such as a severe storm or a flood).
Also, managing a self-storage facility will, of course, require at least some time from you and may even require employees, so you should also think about operational costs and business management.
How profitable can a self-storage business be?
The amount of money that a self-storage business can make depends on many things such as location, demand, and operating costs.
Can owning a self-storage unit generate passive income?
Having a self-storage facility can earn you passive income through rental fees. But, managing a self-storage facility also requires that someone works at the business, to check people in, show units, and check on the property. You could hire employees so that it is more passive for yourself.
You can also earn passive income by investing in self-storage REITs or stocks instead of owning and running a storage facility.
Does self-storage do well in a recession?
Self-storage in the past has performed relatively well during recessions, as people often downsize their homes or need temporary storage. Of course, though, the past doesn’t mean that it will always do well. So, it is always best to do your research and prepare as best as you can.
What is the future outlook for self-storage?
The future for self-storage looks to be positive, as there is a lot of demand for storage units and I’m still constantly seeing waitlists everywhere. In fact, whenever I need to store something even for just a few months, I’m always being told that I need to call a year in advance for a spot.
Many storage facilities have a high occupancy rate, long waitlists, and cannot keep up with demand.
How To Invest In Self-Storage – Summary
I hope you enjoyed today’s article on how to invest in self-storage.
If you are looking to add a new asset class to invest in, becoming a self-storage investor can be an interesting way to bring in a stable cash flow and make more money.
Self-storage is in high demand too, with many businesses currently having a long waitlist.
Factors such as location, demand, the quality of facilities (Class A, Class B, and Class C), and the type of storage lot all can change the success of a self-storage investment.
Are you interested in learning how to invest in self-storage?
When searching for apartments, there’s always so much to consider, like location, price, proximity to parking or public transportation and closet space.
However, there’s another factor to consider in the apartment hunt that has the potential to profoundly impact your day-to-day lifestyle: which floor is best to live in an apartment. There are benefits and drawbacks to all the different floors, from the ground floors to a top floor apartment.
Which floor is best to live in apartment buildings
What’s the best apartment floor to live on? The top-floor apartments have great views and privacy, but ground-level apartments are usually more affordable. In other words, there are pros and cons to living on a lower floor or a higher floor.
Pros and cons of living in a top-floor apartment
Like all things, there are important factors to consider about living in top-floor apartments, like if the building has an elevator to access the higher floors.
Pro: Less noise
Top-floor apartments rarely have to deal with noise coming from both outside of the building and inside from other tenants. However, if you’re a noisy neighbor, living on the top floor could create some potential problems with your downstairs neighbors on the lower floors.
Pro: Panoramic views of the city
The panoramic views from top-floor apartments are nothing to complain about. However, keep in mind that you might not need to seek out a penthouse apartment to get the views you desire. You might be able to see the same sights from the middle floors, which could save you money in the end.
When touring the apartment initially, observe the view so you can make an informed decision before signing the lease.
Pro: Increased security
One advantage of living on the higher floors of an apartment building is that it’s typically safer than lower-level apartments. Depending on the layout of the apartment building and its built-in security measures, basement and ground-level apartments can pose a higher risk of criminal activity and break-ins than apartments on the top floors.
If your prospective apartment is in a high-rise building with a doorman, is within a gated community, has on-site security or requires a FOB or code for access, crime is less likely to occur.
However, if you fear that criminals could easily access a ground-floor window without an alarm system or bars, you might consider “moving on up” to a higher apartment floor.
Pro: More exposure to natural light
Living on the top floor gives you added height and more exposure to natural sunlight. Natural sunlight is a great way to brighten up your place, especially if it’s a small floor plan. While natural light is great, it can also make your place hotter, so keep this in mind when you budget for utilities. You can also enjoy fresh air courtesy of higher-up breezes.
Pro: Fewer pests
Living on the top floor means fewer visits from unwanted pests and critters. Bugs and other pests typically live in or on the ground outside, so they’re more likely to infest apartments that are closer to where they live in nature.
Con: Added cost for rent and utilities
Apartments with the same or comparable floor plans are typically more expensive the higher up they are. And don’t forget that heat rises. That goes for utility costs, as well. Your monthly electric bill could potentially skyrocket in the summer, especially if you live in a warm climate, like the South.
If money is tight, you should strongly consider these factors when choosing which apartment floor to live on and rent. The abundant sunlight drenching your apartment coupled with the “heat rises” concept is sure to minimize heating costs in the winter. However, that same combination might drive up your air-conditioning bill in the summer.
Con: More difficult to access
Living in a top-floor apartment might be attractive, but how easy is it to get there? Does your building have an elevator, or are we talking four to five flights of stairs every time you come and go? How easy would it be to get to your apartment with two weeks’ worth of groceries?
Make sure to pay extra attention to the ease — or difficulty — of getting up to your place. Additionally, there’s the added element of the actual move in and move out, which results in lots of trips up and down the stairs. Keep in mind, apartments that are more than three stories high must have elevator access to meet ADA standards. On the other hand, walking up and down all those stairs does save you from getting a fitness center membership.
Con: Limited emergency evacuation options
Living on a higher floor can often make evacuating during a fire or natural disaster much more difficult than just walking down a few flights of stairs. Check out the evacuation route and plan for your apartment complex.
Will you be walking down 20 flights of darkened stairs filled with smoke? How many apartments and residents are below you that will also be evacuating at the same time? These questions aren’t meant to scare you, rather more to prepare you. It’s smart to have an emergency evacuation plan in mind when moving to an apartment, regardless of the floor.
Con: Building conditions may impact apartment
Most apartment complexes will have a maintenance team dedicated to the care and upkeep of the place. If you choose to live on the top apartment floor, you want to check out the conditions of the exterior roof and see if any damage has occurred that’ll directly affect your apartment.
Pros and cons of living in ground floor apartments
A ground-floor apartment, too, boasts some enticing amenities. When looking for the perfect place in an apartment complex, consider all that a ground-floor apartment has to offer to ensure it meets your wants and needs in a home.
Pro: Easier to access
The first floor of an apartment is ideal for bringing in heavy loads, such as your furniture when moving or that big trip to the grocery store. You don’t have to carry things all the way to the top floor. The ground floor might be the best choice.
Also, if your health will prohibit you from walking up and down the stairs frequently, ground-floor apartments are beneficial.
Pro: Reduced cost of rent and utilities
Living on the ground floor will help you save on utility bills. The lower floors make for a less expensive air-conditioning bill in the summer as the cool air naturally reigns in lower locations. Also, you’ll likely have less exposure to natural sunlight, which will keep your place cooler in the hot months of summer.
And sometimes, apartment complexes will offer lower monthly rent prices for the bottom level because it lacks the views some people desire. Apartments on the top floors always fetch higher prices because of the views. So, living on the bottom floor can help you save money on rent and utility bills.
Pro: More options for outdoor space
Living on a ground floor unit could mean easy access to outdoor space like a backyard or courtyard, which is great for tenants with pets, kids or people who love entertaining outdoors. This isn’t always the case, but it’s something to keep in mind when deciding which apartment floor you want to rent.
Con: Potentially more noise
While street noise might be a con in first-floor apartments, you also get the benefit of not having to worry about bugging a neighbor below you. If you’re the type who brings a recording of city noises with you on vacation so you can actually fall asleep, the ground floor might be your perfect place to land.
On the other hand, late-night vacuuming or the high-heel lover upstairs might get annoying for a first-floor dweller. Decide how much or how little noise you can tolerate from potentially loud neighbors before making the decision about which apartment floor to live on.
Con: Potential for more pests in the home
When you live on the ground floor, you’re generally more susceptible to getting unwanted pests than on a higher floor. This is a major turn-off for some renters. Pests can access the bottom apartment floor more easily, but if you don’t mind killing the occasional roach or have a great plan for pest control, you’re good to go.
Pros and cons of living in a middle-floor apartment
The top and bottom floors are both great options depending on what you’re looking for in an apartment rental, but when it comes to heating and cooling and worrying about the trek to and from the apartment, each showcases opposing extremes. As a result, the middle floors are, in a sense, just right.
Pro: Consistent bill price
The middle floor may not get a seasonal break from heating and cooling costs, but it usually sees a steady power consumption rate during each season. If you’re someone who likes to live on a steady budget, the middle apartment floor can help you plan a more stable budget.
Pro: Easier access to your home
While the middle floor has both top and bottom neighbors, it doesn’t demand a huge hike up the stairs. And if your building has an elevator, access is essentially a non-issue. Living on the middle floor gives you a little workout, but you won’t work up a sweat every time you go home.
Pro/con: Some noise levels
Mid-level apartment floors like those on the third floor aren’t exposed to street traffic noise. However, you’re surrounded by a lot of neighbors and foot traffic in the hallways is a trade-off there.
Choosing the right location to rent
Home is a place of comfort and peace, so you want to ensure it has everything you need to feel safe, secure and happy. Everything from the cost of the apartment to which apartment floor you choose is important. Not sure you want to live in a high-rise apartment building? Determine which type of rental layout is right for you.
If you haven’t heard about Choice Hotels’ recent acquisition of Radisson Hotels Americas, here’s a key detail: It has opened some new points redemption possibilities.
Radisson has some incredible properties within the Americas, and the acquisition has made it much easier to redeem points for stays. This is the biggest reason I booked the Radisson Blu Aqua Hotel Chicago for my recent stay in the Windy City.
As a five-star property, it’s fairly costly. However, it was such a great deal on points that it made no sense to book anywhere else. Happily, the hotel turned out to be as nice as it appeared online. Let’s talk about it in this review.
Booking
I’ve made such a big fuss about the booking that I feel compelled to lead with this because — and I don’t say this lightly — this is the absolute biggest steal in Chicago.
However, rooms cost just 50,000 Radisson points per night. Thanks to the Choice acquisition of Radisson, Choice points convert to Radisson at a 1:2 ratio, which means 1 Choice Privileges point becomes 2 Radisson points.
I stayed for two nights at the Radisson, which came out to 25,000 Citi points for the stay. The cash cost for the hotel would have been $1,008.98, which means I redeemed those points for 4.04 cents each. This is far above NerdWallet’s valuation of most hotel points.
More than this, however, I also managed to spend just 25,000 points for a two-night stay in central Chicago. This beats the rates you’ll find with other hotel chains, including Hilton, Hyatt and Marriott.
Location
The Radisson Blu Aqua Hotel Chicago has an excellent location for tourists. After I arrived, there wasn’t a single instance in which I needed to use a car or other form of transit. The hotel is close to Navy Pier, Millennium Park, the Riverwalk promenade and tons of other tourist hot spots.
Accommodations
I have no elite status with Radisson, which meant I expected nothing in the way of benefits. Imagine my surprise, then, when I found out that my award booking had been upgraded to the top-tier Executive Queen room with a balcony. I have no idea why, but I’m not complaining.
The room was spacious, and because I was staying with a friend, we opted for separate beds. The room also had a desk with a chair.
We were on the top floor, which presented an interesting problem with the balcony. Namely, it was great to peer at through the window, but its wavy design and the whipping wind made it a little too terrifying to actually go outside.
There was a large television on one wall; the TV worked well for Netflix but errored out for an hour straight when we tried to use other streaming apps.
There was also a sizable closet, which included an ironing board, a hair dryer and a safe.
The room felt freshly renovated, which was especially nice in the bathroom.
I also appreciated the wide range of toiletries available.
However, if I have to lodge a single complaint, it’s this: The room had no carpeting, which meant every sound echoed.
That isn’t normally an issue for me, but it certainly was for my friend when I arrived at 1 a.m. and attempted to tiptoe across the vast, cavernous space.
Food and beverage
Because I received no elite benefits, such as free breakfast, I avoided the restaurant option in the hotel. The only choice available, the FireLake Grill House and Cocktail Bar, appeared to be popular for a sit-down breakfast, lunch or dinner, as well as drinks. The restaurant is on the ground floor and is open the following hours:
8 a.m. to 8 p.m. Sunday to Monday.
8 a.m. to 11 p.m. Tuesday to Saturday.
Amenities
The Radisson Blu Aqua Hotel Chicago is a city hotel but still has amenities like massages, a fitness center and pools.
Pool
I’m not sure how many folks are using these amenities because the majority of the guests seemed to be tourists or business travelers, but there are two pools available at the hotel. Both are lap pools, though the outdoor one is seasonal.
Gym
The hotel also has a gym with plenty of cardio equipment, including treadmills, stair climbers and ellipticals. It even features an indoor basketball court.
Spa
There isn’t an official spa available at the hotel, but the Radisson has partnered with a local massage company to organize massages in your room.
The pricing is a little steep, but it was nice to know the option was there.
How to get to the Radisson Blu Aqua Hotel Chicago
Chicago has two airports within its city limits: O’Hare International Airport (ORD) and Midway International Airport (MDW). It’s simple to fly into these airports because they’re well connected throughout the United States.
If you’re looking to redeem points, ORD is a hub for United Airlines, so you’ll be able to find plenty of daily flights no matter where you’re located. MDW is a hub for Southwest, so if you’re interested in bringing a bag, it might be a better bet because all passengers get two checked bags for free on Southwest.
I flew into ORD late at night, and rather than deal with a train or even Uber, I opted for a taxi right out of the baggage claim area. It cost me $50 but was worth it for the convenience.
Because it was so late, the 18-mile journey took only about 25 minutes. If you travel during the day, expect to find traffic, especially during rush hour.
If you’re looking to stay at the Radisson Blu Aqua Hotel Chicago
I greatly enjoyed my stay at the Radisson Blu Chicago, mainly because it’s a nice hotel with a great location.
However, even if it were only middling at best, I’d still come back. There’s simply no other reason to stay elsewhere when I can pay 12,500 points per night for a five-star hotel in the city center.
The information related to Citi Prestige® Cardhas been collected by NerdWallet and has not been reviewed or provided by the issuer or provider of this product or service.
(Top photo by Carissa Rawson)
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This transcript was prepared by a transcription service. This version may not be in its final form and may be updated.
Jessica Mendoza: Well, good morning, Harston.
Harston Jones: Good morning. How are you?
Jessica Mendoza: I’m well. How are you?
Harston Jones: Oh, just fine. Considering.
Jessica Mendoza: Yesterday I had a call with a man named Harston Jones. He’s 62, recently retired, and is based in Atlanta, Georgia. He lives in a home he bought in 1998.
Harston Jones: It’s a ranch style home, on about a half acre. It’s a very diverse community. It’s very convenient to a lot of important areas of Atlanta.
Jessica Mendoza: Right. And location, location, location. You have to choose the community that you want to live in.
Harston Jones: Absolutely. I got lucky on that.
Jessica Mendoza: Like a lot of people, Harston took out a mortgage when he bought his home. A few years later, he got a second mortgage on the house. It was a home equity line of credit for up to $50,000 and Harston used that money to renovate his property.
Harston Jones: Some major repairs had to be done. All the windows had to be replaced. I needed to put a roof on the house. I needed to fix the driveway, it’s a pretty long driveway. Things like that I needed to get done.
Jessica Mendoza: Soon after Harston took out that second mortgage, the financial crisis of 2008 happened.
Banks were getting bailed out, home prices were crashing, and a lot of people, like Harston, lost their jobs. Many stopped making payments on their home loans. Some banks stopped sending out statements for those loans, giving people the impression their loans had been canceled. Harston was one of them.
Harston Jones: And I thought it was over. And then I got this surprise letter in exactly three years ago this month.
Jessica Mendoza: Since then, Harston has been embroiled in a legal fight to keep his home, a fight that other homeowners across the country are also going through.
Welcome to the Journal, our show about money, business, and power. I’m Jessica Mendoza. It’s Friday, June 23rd.
Coming up on the show, how zombie mortgages are coming back to stalk American homeowners.
The financial crisis was a chaotic time for the housing market. Home prices were falling, people were losing their jobs, struggling to pay their mortgages, and that led to a wave of foreclosures. Here’s our colleague Ben Eisen.
Ben Eisen: A lot of people lost their homes, because when you don’t pay your mortgage, the lender has the right to foreclose on your house and so there were tons of foreclosures. There were a lot of people that went to their mortgage company and modified their loan. Basically got the company to change the terms of the loan so that they could get back on track with payments. And then there were some loans that just kind of disappeared.
The lender, for whatever reason, wasn’t going to foreclose on the house, but they also weren’t going to get repaid back. And so a lot of these banks, they just kind of wrote down the value of the mortgage, basically saying, “We are going to recognize a loss on her own balance sheet for having made these mortgages.” And at that point, depending on just what the lender does with that mortgage, they might stop sending statements to the borrower.
Jessica Mendoza: And why would the bank do that?
Ben Eisen: Banks were under pressure to clean up their balance sheets. They had tons and tons of these loans and that had all soured at once. Not every bank had the appetite to kind of go through with all of these foreclosures, so sometimes they didn’t do that, and instead they basically just kind of ignored the loan for a bit.
Jessica Mendoza: Banks call this charging off a loan.
Ben Eisen: This is basically the technical term for what a company that is in the business of lending money does when they’re not going to be able to collect money on that loan and they need to basically get it off their balance sheet. They charge it off. They just basically take the losses on it.
Jessica Mendoza: Banks all over the US started charging off second mortgages because it seemed like homeowners wouldn’t be able to repay. And this is what Harston says he thought happened to his second mortgage.
He had stopped payments on his second mortgage during the time when he was out of a job. When he was able to restart payments, he got back in touch with his bank.
Harston Jones: I called them when I got stable again, and they told me the mortgage is charged off. And I thought it was over.
Jessica Mendoza: Your bank said that it was charged off?
Harston Jones: Yes. When I saw charge off, I said, “Hey, it’s charged off.”
Jessica Mendoza: But Ben says there’s actually a big difference between canceling a loan and charging it off.
Ben Eisen: That doesn’t mean the loan went away. That simply means the bank is deeming that mortgage uncollectible.
Jessica Mendoza: So just saying like, “It’s not worth the trouble. We’ll take the loss. Moving on.”
Ben Eisen: Exactly.
Jessica Mendoza: Many homeowners, including Harston, thought they could move on too. Then one day, in the spring of 2020, a letter arrived for Harston. It was a pretty ordinary looking letter.
Harston Jones: It wasn’t clear from the outside. I said, “Why are these people contacting me?” And I opened it up and it was an official accelerated foreclosure letter with all the mouse print for like four or five pages.
Jessica Mendoza: The letter was from a law firm representing an investor called IslandCap. It said that IslandCap was now the owner of Harston’s second mortgage. And because Harston had missed a decade of payments, IslandCap was threatening to foreclose on his home.
As you were reading it, what was going through your mind?
Harston Jones: I couldn’t believe it. I was saying, “How could this happen?” I was very confused, but when I tell you that was one of the lowest points of my life to get that notice. It was awful. It was awful. It was a nightmare.
Jessica Mendoza: It turns out that Harston’s second mortgage hadn’t died. His bank had sold his loan to new owners. Banks do this all the time.
Ben Eisen: Often what they do is they just sell them off, to whoever wanted to buy them. They might say, “This loan is no longer worth 100% of its original value, but we might be able to sell it for 5% of its original value.” And then all of a sudden it enters this new world of investors who are buying it because they think there’s some value to be squeezed out of it.
Jessica Mendoza: These investors buy the mortgages for pennies on the dollar, waiting for a day when house prices go back up and it makes sense to start collecting monthly payments again.
Ben Eisen: And that’s what happened with a lot of these mortgages. They changed hands, sometimes many times, and went from an investor to investor. At some point, it lands in the hand of an investor who says, “You know what? I’m going to go to the homeowner and tell them that they have a new mortgage company and they have to start paying again or they have to make up for all those missed payments or I’m just going to foreclose on the house.”
Jessica Mendoza: But Harston wasn’t going to give up his home without a fight.
That’s coming up.
After receiving that letter from IslandCap’s lawyers, Harston says he jumped into action. He started contacting attorneys to figure out what his options were.
Harston Jones: What else could I do? I needed help. I needed representation. I needed somebody who understood what’s going on.
Jessica Mendoza: At first, IslandCap didn’t say how much money Harston owed. But they eventually asked for about $95,000, which included interest and late fees on top of a $43,000 loan. Harston’s attorney tried to negotiate with IslandCap over a repayment plan or settlement. When the Wall Street Journal reached out to IslandCap, the company said it’s in the business of buying defaulted mortgage loans from banks at a discount. And that if the borrower simply restarts loan payments, IslandCap would take no further action. But Harston and IslandCap couldn’t reach an agreement.
Harston Jones: And we tried to negotiate with something reasonable, but they won’t budge. And I knew why they were doing it, because in one of the last correspondences we had with them, they said, in clear writing, “because he has so much equity in the property.” I knew that’s what it was all along. But they even said it out loud that the reason they’re not given up on this, in so many words, they said it clear as day, “because of the amount of equity he has in the property.”
Jessica Mendoza: We ran this point about Harston’s home equity past IslandCap, but didn’t get a response. Our colleague Ben says that higher home prices are the reason so many zombie mortgages are coming out of the woodwork now.
The US housing market has been on a tear lately. Home values have been soaring. And after years of making payments on their first mortgages, homeowners have built up a lot of equity in their homes.
Ben Eisen: And the equity is important because that is the value of your home and if somebody owns the right to foreclose on that home, the thing that they’re foreclosing on has gotten a lot more valuable or the thing that they’re using to demand payment has gotten a lot more valuable.
Jessica Mendoza: In other words, the more valuable a house is, the more profit there is for the second mortgage holder, after all the other home loans have been paid off.
Ben Eisen: So what we’re seeing today really kind of comes from this place of there’s a lot of value in these homes so it’s now worth my while to go and try to use that old loan to squeeze some money out of it.
Jessica Mendoza: This experience left Harston feeling like the system is unfair. He tried to settle with IslandCap, but he also sued them. Harston argued that IslandCap hadn’t shown proof that it had the right to foreclose on his home, but his case hasn’t succeeded.
Harston Jones: My attorney made it clear the statutes don’t support us, but something needs to be updated. And that’s what I was hoping somebody would step in and say, “Okay, this is something that needs to change. It’s not fair to these people who didn’t realize this was going on, that their charged off loans were being sold again.” I just thought by principle, somebody would see this is clearly wrong. At one step or the other, I thought one jurisdiction or another would say, “Okay, we have to stop this. But nobody stepped up.”
Jessica Mendoza: In Washington, the Consumer Financial Protection Bureau has started looking into this issue of zombie mortgages and held a hearing about it in April. But for now, Ben says there isn’t usually much homeowners can do if investors threaten foreclosure.
Ben Eisen: And I think what’s so jarring for people is just to go from this place of, “I haven’t thought about this debt in 10 years,” to, “Oh wow, all of the financial gains that I’ve accrued since I thought that debt went away are now in jeopardy.” It really shows sort of the flip side of rising home values. We think of the housing market rising being mostly a good thing. You’re building generational wealth and such. If you have some sort of zombie or ghost in your closet or whatever it can kind of bring that out of the woodwork because all of a sudden you have something that is a lot more valuable than it was. And that’s really what we’re seeing here.
Jessica Mendoza: At this point, Harston has been fighting to keep his home for three years. And now he’s exhausted most of his options. He says he sometimes gets calls from property developers who want to buy his home. Selling would potentially give Harston a way out, by giving him the money to end his dispute with IslandCap. But-
Harston Jones: I just say, “I’m not interested.” I just say, “No, thank you.”
Jessica Mendoza: And so you wouldn’t consider selling your home to an investor, like that’s not-
Harston Jones: No.
Jessica Mendoza: -that’s not a path you’re-
Harston Jones: Not in my plans.
Jessica Mendoza: Harston says his last resort might be to declare personal bankruptcy. He still hopes to find a way to keep his home.
Harston Jones: I was told to contact a bankruptcy attorney. So I did pay a bankruptcy attorney. I went through the process. My attorney said, “Do you want to have that ready just in case?” Because he and the bankruptcy attorney both said, “We’re not going to let you lose your house, Harston.” So that gave me, once I got over the fact that I might have to file bankruptcy, it was easier to deal with. I have resolved the fact that if I have to, I have to. I’m a different person than I was three years ago. I’m not freaking out about anything. I’m not freaking out about if that’s my last option. I’m okay now. I’m okay. I’m not losing any sleep anymore because I know it’s like the kill switch. If I have to pull it, I will. And I’ll file bankruptcy.
Jessica Mendoza: That’s all for today, Friday, June 23rd. The Journal is a co-production of Gimlet and The Wall Street Journal. Additional reporting in today’s episode from Nicole Friedman. The show is made by Mahara Dhoni, Annie Baxter, Arianna Beau, Katherine Brewer, Maria Byrne, Pia Gadkari, Rachel Humphreys, Ryan Knutson, Matt Kwong, Kate Linebaugh, Annie Minoff, Laura Morris, Enrique Perez de la Rosa, Sarah Platt, Alan Rodriguez Espinoza, Heather Rogers, Jonathan Sanders, Pierce Singgih, Jeevika Verma, Lisa Wang, Catherine Whelan, and me, Jessica Mendoza. Our engineers are Griffin Tanner, Nathan Singhapok, and Peter Leonard. Our theme music is by So Wiley. Additional music this week from Peter Leonard, Bobby Lord, Nathan Singhapok, Griffin Tanner, and Blue Dot Sessions. Fact checking by Sophie Hurwitz.
Thanks for listening. See you on Monday.
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Take a tour
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A century-old Hollywood Hills home has recently hit the market — and its rich history takes us on a trip back to the very beginnings of Hollywoodland.
Just shy of its 100th anniversary, the residence is one of the first homes ever built in the Hollywoodland neighborhood and is nestled under the iconic Hollywood sign.
As the story goes, the neighborhood of Hollywoodland began in 1923 when two developers purchased 500 acres of land nestled at the foot of Mt. Lee, just above the town of Hollywood. This was well before any houses dotted the hillside, and the plan was to build a unique community for Los Angeles’ “movie people”, whose stars had started to shine brightly.
To attract attention to their new development and help sell the houses, they erected a huge sign that spelled out its name, Hollywoodland, and that’s how the Hollywood sign was born.
One of the first homes built as part of that community, this 1925-built storybook cottage we’ll take a closer look at today retains many of its original details, including built-ins, leaded glass windows, and a fireplace crane.
But it has been updated for modern-day living with a period-appropriate remodel that didn’t alter the original design.
Now, the charming storybook home is being offered for sale with a $2.625 price tag. Jill Galloway and Manuel Pablo Arnao with Compass hold the listing.
The 2,205-square-foot home comes with 3 bedrooms, 2 baths and 1 half-bath, with two of the bedrooms set on the ground floor. The primary bedroom, set upstairs, invites rest and relaxation and features a cozy sitting area, built-ins, a skylight, a large walk-in closet, and a new bath.
The living room boasts an expansive vaulted ceiling, as well as hickory wood floors, re-glazed leaded glass windows, built-in bookcases, and a newly rebuilt fireplace that adds to the home’s charm.
But its value extends beyond its square footage.
“Its rich Hollywoodland history makes the home special,” listing agent Manuel Pablo Arnao tells us. “It was just completely renovated; it has modern conveniences throughout. There’s very little inventory especially in this part of town, much less with this rich pedigree.”
The three-bedroom home sits in the historic Beachwood Canyon, set right under the iconic Hollywood Sign.
In fact, the upper portion of the canyon housed the 1920s-built Hollywoodland community that was advertised by the original sign, which used to say “Hollywoodland” (with the word “land” later dropped from the sign to reflect the whole district, not just the housing development).
Historic appeal aside, the area is one of the best in all of Los Angeles, providing access to countless nearby locations. The home is surrounded by convenient amenities like hiking trails, Sunset Ranch riding stables, and the Beachwood Market & Cafe. The location also provides easy access to Hollywood studios, the 101 freeway, and the Valley.
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self-expression, color and creativity. Does orange make you smile? Dress your kitchen in the happy hue. Love a variety of styles? Do a mashup.
The look goes by many names. Fashion writer Dawnn Karen referenced the feel-good brain chemical in her book “Dress Your Best Life,” holding that “dopamine dressing” — wearing clothes in your own, individual style — gives you positive feelings.
Decorators and influencers say the same thing happens when we throw out old decor rules and step into a space adorned with personal touches. We’re more relaxed. More creative.
People are asking themselves what colors and patterns they really love, “and then bringing those features into their spaces — even if it goes against conventional decorating advice or what they might have seen online 10 years ago,” says Lauren Phillips, associate director of special projects at Better Homes & Gardens.
‘BARKITECTURE’ AND OTHER WAYS TO USE A ROOM
The trend toward making rooms more comfortable, functional and personal gained steam during the pandemic, when many people were homebound. And it continues to grow, Phillips says.
“Unused guest rooms are home offices. Formal dining rooms become craft spaces. And ‘barkitecture’ is having a moment — installing dog baths and other pet-specific features,” she says.
Decor is awash in aesthetic “cores” — Barbiecore, cottagecore, coastal grandma, mermaidcore.
“But I don’t take it to mean we’re bouncing from trend to trend super quickly. To me, it means people are defining their own style, and really getting to the root of the designs they love, even if that’s a little more colorful, kitschy or funky,” says Phillips.
SOCIAL MEDIA HAS LOOSENED THE CREATIVE REINS
There’s lots of inspiration on the internet. “If, 15 years ago, we all wanted the picture-perfect kitchen we saw online, today it’s all about taking a trend or beautiful interior that you see on TikTok or Instagram and pulling out the details you love,” says Phillips.
“Gen Z is on the cusp of becoming our new homeowner,” says Amanda Kruse of Upspring PR, a New York-based marketing firm for real estate, design and interiors.
And they’re more likely to mix styles for a personal spin, she says.
ARTSY ELEMENTS
Emilie Munroe began designing a San Francisco family’s Victorian home by leafing through a sheaf of torn-out magazine images from the client.
“We knew immediately our design should exude happiness and inspire curiosity,” says Munroe.
A tiny powder room got an exuberant pink-and-black, animal-print wallpaper. In a tight hallway next to a window, there’s a kaleidoscopic wallpaper, an abstract rug and a Basquiat-patterned chair.
London-based design editor Cara Gibbs, meanwhile, has noticed the free-wheeling use of paint.
“I feel like it used to be wacky to paint a room pink from top to bottom, but now the application of these bright, poppy palettes is chic, interesting and most importantly very livable. I’m here for it!” she says.
So is Massachusetts designer Nicole Hirsch. She’s put a zingy green — she calls it “alligator” — on a bathroom ceiling. Tangerine on a playroom ceiling. Cobalt blue, lipstick pink and chrome yellow add lively punches on furnishings.
HIDEAWAYS
In her own California home, designer Alison Pickart has the kind of roomy closet that storage-challenged homeowners would envy. But she saw value in a different use.
“It was a hall closet, but with its generous size and great natural light from a back window, I just felt like the space could be ‘more,’” she says.
So she turned it into a little “phone room” for herself. “It seemed like the perfect size and place to escape, with some privacy to make a call.”
Clara Jung of Banner Day Interiors worked with clients on a San Francisco ranch house that’s full of big, airy spaces. But nudge the secret panel in the living room bookcase and you’ll find a cozy, color-saturated, album-lined music den. There’s a vintage wood bar and a sprawl-worthy crimson rug.
“The homeowners are avid LP collectors,” she says, “and the husband’s a musician.”
Jung was ready to install a door when the clients suggested creating the secret entrance instead. “We loved the idea!” she says. “It’s the perfect escape for an audiophile.”
Maybe that’s the new decorating rule: Create your own “perfect escape.”