When you purchased your first home, it likely checked off all the boxes. But over time, perhaps your lifestyle has changed and your family has grown, and now you’ve started asking yourself, “Should I buy a bigger house?” Whether you’re looking for larger bedrooms, expanded family space or more storage solutions, buying a bigger home — or even just moving to a different layout or location — might be a change you’re ready to make.
Scott Bridges, Senior Managing Director of Consumer Direct Lending at Pennymac, says that upsizing happens frequently. He explains that a “healthy percentage of buyers are looking to buy up for space, neighborhood, school district and work proximity reasons. It’s a great pursuit and one of the more exciting chapters in one’s homeownership journey.”
Here’s how to figure out if you’ve outgrown your current home and how to determine how big a house you actually need.
The Signs You’ve Outgrown Your Home
While starting a new chapter in a bigger home may sound appealing, moving is a big decision that can come with a hefty price tag. How do you know if you’ve really outgrown your house? Bridges says the following are some of the most important items to consider.
Physical Aspects
One of the first things you’ll want to assess is the number of bedrooms and bathrooms you have versus the number you need. Bridges notes, “If your family is growing, if you have kids or parents moving in, you will need additional space for the new members of the household.”
Evolving household dynamics can also change your idea of an optimal home layout. If you currently have a one-story home, do you want to move to a two-story residence or vice versa? Do you want your children’s bedrooms on the same floor as yours? Do you need a separate entrance and living area for mom and dad or grandma and grandpa?
You’ll also want to think about your outdoor space. Bridges recommends asking yourself how much space you’ll need. For example, will you want to entertain, maybe have a pool, how much yard would you like to manage? All things to consider when looking to buy a bigger house.
Future Plans
Even if you’re comfortable in your home right now, do you foresee life events on the horizon that may lead to things getting cramped? Think carefully about your future plans and determine if they align with your current living environment. Consider the following:
Will you be having more children or expanding your family?
How long will your kids be living in the house before they leave for college or work?
Will you need a larger garage or driveway as your children get their driver’s licenses?
Do you envision an elderly parent moving in with you at some point?
Your answers to these questions will help you decide if moving to a bigger home is right for you.
Daily Life
Your home’s physical size may be the primary factor when deciding if you’ve outgrown it, but there are other lifestyle factors to consider as well. For example, do you have a short or a long commute from your current home? Bridges points out, “Most people don’t want to add significant time to their commute, even if it is for a larger home.” Others, however, may feel a longer commute is an adequate trade-off for increased space.
Or maybe you aren’t commuting as much because you work or attend school from home. Could a dedicated work area in a larger home reduce distractions?
Consider, too, the benefits and drawbacks of your present location. Even if you love your neighborhood, perhaps you want to move to a quiet, traffic-minimal cul-de-sac. Or maybe you’d like to be within walking distance of stores, restaurants or public transportation.
Quality of life is key. If your current home is causing you stress and not providing you the comfort you need, it may be time to upsize. Bridges urges, “Carefully think about how much better your day could potentially be with more space, a bigger kitchen, larger yard and more rooms.”
Considerations for Staying Put
There are many reasons why you may want or need to move to a bigger house. But that increase in square footage will likely increase your expenses and responsibilities. Here are a few reasons why staying put may be a better option for some homeowners.
Difficulty Finding a Home in Your Ideal Location
Depending on your desired location, a larger home in your price range may be difficult to find. If you want to remain in the same neighborhood or school district, you’ll have to decide whether moving away from your preferred area for a bigger space is worth the sacrifice.
Higher Costs Beyond the Mortgage
Even if you can comfortably afford your down payment and monthly mortgage payment, there are other expenses you’ll need to consider when moving to a bigger house. “If you live in an area with colder winters, understand your heating costs will go up,” Bridges says. “In a warmer climate, think Arizona and Texas in the summer, AC costs can run very high electric bills in bigger homes.”
Increased Responsibilities
A larger home requires more interior and exterior upkeep. There’s more to clean, furnish, repair, landscape and maintain, which takes time, money and energy.
Not a Guaranteed Investment
If you’re purchasing a home based on an anticipated greater return on investment, keep in mind that real estate values can be unpredictable. There’s no guarantee that your larger home will increase in value when you’re ready to sell.
Commute
Housing costs are often less the further you move away from city centers, giving you more bang for your real estate buck. But if it takes you longer to get to your job, the added time, hassles and transportation expenses may not be worth it. Bridges notes, “If you’re extending your commute to live in a bigger house in the suburbs, the drive may be just too hard.”
Financial Tips for Buying a Larger Home on a Budget
Moving involves a considerable amount of expense, stress and time. Many people try to avoid it by buying a home that will meet their needs for many years to come. However, it’s also important not to buy a house bigger than what you really need. Maintenance requirements, increased utility bills and expensive mortgage payments can be significant burdens. When purchasing a home, how can you be prepared for a growing family without overstretching your budget? Here are a few tips.
Anticipate Costs
Try your best to forecast the additional costs of a bigger home. “When you buy a larger home, you can easily anticipate your mortgage, taxes and insurance costs increasing, but many people don’t anticipate the additional costs of a larger home,” Bridges explains. “Your utilities will be more expensive, lawn and landscaping and amenities like pools will increase your monthly expenses as well. Lastly, repair costs can be much more expensive on bigger homes. Think of a roof replacement on a 2,000 square foot house versus a 4,000 square foot house.”
Consider Your Income and Employment Stability
While more space may support your plans, Bridges stresses that stability of income and employment must be part of the discussion when considering moving to a larger home. Your household income will need to cover the higher costs of owning a bigger house — now and in the days ahead.
Rent Out Your Original House for Income
It may make sense to sell your current home and use the proceeds for the down payment. But if you don’t have to do that, consider keeping it as a rental. Some homeowners move to a bigger home while renting out their old home, creating what can be a lucrative income stream in the future. Bridges advises, “Depending on how much you owe on your house, sometimes it makes sense to keep the original house and rent it out, as it can represent a good income source in the long run. Over time, real estate tends to appreciate and rents tend to rise, so holding the property as a rental can add to your overall wealth as the years go by.”
What to Look Out for When You’re Ready to Buy a Bigger House
Moving to a larger home is a significant change and takes careful thought. If you’re ready to upsize, think about how your prospective new home could adapt as your needs evolve. Bridges says that during the buying stage, homeowners with growing families often look for the following:
Bedrooms on the same floor
A bigger kitchen, a nursery or a media room
Backyard space for kids and pets
A better school district, which generally speaking, impacts home value stability
Want to start your new home search now? See how much your current home is worth, and then go beyond home affordability calculators to determine how much house you can actually afford.
Are You Ready to Move to a Larger Home?
So, should you move to a bigger home? “Every buyer has to make their own decision, as their circumstances vary,” Bridges says. Moving may be challenging, and selling is a process, but he adds, “At the end of the day, buying a bigger home might be one of the more memorable and enjoyable things you can do in your life, so don’t wait too long, if you can!”
Choosing a home that is the right size for your life today and tomorrow involves balancing both your family needs and your budget. If you’re ready to take the next step toward a larger home and are looking for expert guidance in the mortgage loan process, get a custom instant rate quote from Pennymac today.
Mortgage rates remain at jarringly lofty levels. In late September, the average rate on a 30-year home loan surged past 7.5 percent for the first time since November 2000, according to Bankrate data.
For October, experts don’t expect rates to depart much from that high point.
The biggest risk to mortgage rates is a broad souring of sentiment for Treasurys — a low-probability but extremely high-impact event. Barring that, October will likely bring renewed concerns about a weakening economy and strained consumer, helping reel mortgage rates back in a bit, but not enough to get below the 7 percent threshold.
— Greg McBride, Bankrate chief financial analyst
Fed’s ‘higher for longer’ keeps pressure on mortgages
Mortgage rates broke through 7 percent faster than anticipated. The average rate on a 30-year home loan was 7.42 percent as of early September, according to Bankrate’s weekly national survey of lenders. That figure surged all the way to 7.55 percent in Bankrate’s final survey of the month.
For a 30-year loan at that rate, you’d pay $702 per month for every $100,000 borrowed. At the current median national price of $407,100, that equates to about $2,775 per month, assuming you’re making a 3 percent down payment.
Not long ago, experts thought rates might fall to 5 percent this year.
At its September meeting, the Federal Reserve declined to boost its policy rate again, but did signal it doesn’t expect to cut rates any time soon.
That new outlook led to a spike in 10-year Treasury yields, which are correlated with 30-year mortgage rates.
“Higher for longer seems to be the mentality of the Fed right now,” says Scott Haymore, head of Capital Markets and Mortgage Pricing at TD Bank. “They pushed out any decrease in rates until Q2 2024.”
For months, the major mortgage rate driver was inflation and the Fed’s response. While the policymaker doesn’t directly control mortgage rates, its moves set the overall tone for borrowing costs.
Outlook hazy for the rest of the year
Economists agree that the pandemic-era 3 percent rates aren’t coming back. The question now is how much higher they’ll go.
“The biggest risk to mortgage rates is a broad souring of sentiment for Treasurys — a low-probability but extremely high-impact event,” says Greg McBride, chief financial analyst for Bankrate. “Barring that, October will likely bring renewed concerns about a weakening economy and strained consumer, helping reel mortgage rates back in a bit, but not enough to get below the 7 percent threshold.”
Some are optimistic. The Mortgage Bankers Association (MBA) predicts rates will drop to 6.3 percent by the end of 2023.
Haymore, of TD Bank, sees little change in rates in the near future.
“I think over the remainder of the year, we’ll be within a quarter point of where we are now,” says Haymore. “I don’t think we’ll see 8 percent.”
Lawrence Yun, chief economist at the National Association of Realtors, says that threshold is very much in the realm of possibility.
“In the short run, it’s possible mortgage rates may go to 8 percent,” says Yun.
More forecasts
A roadblock in more ways than one
Despite rising mortgage rates, home price appreciation hasn’t slowed and listings are still moving quickly. As the height of homebuying season fades, buyers are now weighing whether to take a higher rate — in hopes of refinancing later — or, perhaps more frustrating, wait things out.
If your aim is to close by the end of 2023, don’t delay, and carefully consider a rate lock.
“The trend has not been our friend and rates continue to get worse than I had expected based on recent data,” says James Sahnger of C2 Financial Corporation in Jupiter, Florida, adding “until we receive additional data to indicate a decidedly weaker economy, take a defensive posture when locking your rate.”
Rates above 7 percent are as much a psychological barrier as a financial one, says Lisa Sturtevant, chief economist at Bright MLS, a listing service in the Mid-Atlantic region.
“For many would-be homebuyers, a mortgage rate above 7 percent simply means that the numbers do not work for them,” says Sturtevant. “Consumer confidence has started to stumble as individuals and households are becoming more anxious about the economy.”
Indeed, 42 percent of respondents to a recent Bankrate survey cited paying for housing, either a mortgage or rent, as a negative influence on their mental health.
Still, American homeowners have proven their ability to adapt. In the 1980s, mortgage rates averaged 12 percent, but we kept buying homes.
Of course, home values weren’t nearly as high then. Add those two things together, Sturtevant says, and “the seemingly unstoppable housing market may be about to finally and truly stall out.”
It’s that time again, when presidential candidates boost rhetoric into overdrive, which sadly has revolved around the nation’s housing problems for the past couple elections.
Four years ago, Republican hopeful John McCain and Obama exchanged jabs, with the former strongly opposed to a government bailout, noting at the time that, “the fundamentals of our economy are strong.”
He got a lot of flack for that statement, especially after he couldn’t remember how many houses he owned when put on the spot (it turned out to be seven).
McCain also said he was opposed to lower down payment requirements for FHA loans (which I agreed with) and the idea of Fannie and Freddie insuring underwater mortgages – the latter eventually happened.
Housing Under Obama
As we know, Obama went on to become president and introduced a variety of programs to reduce foreclosures and improve the housing situation, most notably the Making Home Affordable plan.
It includes HAMP, HARP, HARP 2.0, FHA-HAMP, HAFA, HAFA II, and many other initiatives.
Thus far, millions of Americans have taken advantage of the programs, which include loan modifications, refinancing to lower interest rates, principal reductions, forbearance, and so on.
The President has also cut costs for FHA streamline refinances, making it much cheaper and easier for those who hold such loans to snag a lower rate.
Oh, and mortgage rates on the popular 30-year fixed are nearly three percentage points below where they stood back in 2008.
Unfortunately, there has been no magic bullet to “save” or “fix” housing thus far. Indeed, it has been a long and difficult road, and many, many Americans have lost their homes.
Perhaps one of the biggest pieces missing at the moment is a wide scale program that addresses underwater loans not owned by Fannie and Freddie.
These private-label mortgages make up a large chunk of the problem loans, but haven’t been addressed by the government, only via individual lender-based programs.
Obama actually pushed a plan to tackle these types of loans back in February, but it seemed to fall on deaf ears because it required Congressional approval.
And now Oregon Senator Jeff Merkley has proposed a similar plan, though that too has been largely ignored.
Romney Says Obama Has Failed Housing
So it appears as if a variety of programs and initiatives have been introduced under the Obama administration to help housing.
And whether you’re left or right leaning, they appear to have done some good. I’m sure many Republicans and Democrats have taken advantage of the programs on offer.
But now Republican hopeful Mitt Romney has unloaded on Obama, as we all knew he (or any opponent) would in this situation.
He noted that under Obama, home prices have fallen, 8.5 million homeowners have received foreclosure notices, and 11 million Americans owe more on their mortgages than their homes are worth.
Unfortunately, what goes up astronomically must come down, and it takes time for bad things to unravel (just look at lengthy foreclosure timelines).
That’s what we have seen over the past several years. And of course the person in charge at the time of the carnage takes the blame, even if it’s the result of actions taken years before.
Ironically, it now appears as if housing is beginning to improve, if just marginally. Home prices are finally up, negative equity levels are dropping, and homes are selling faster.
So if Romney wins the election, and housing continues on its current path, he would likely receive the praise.
Mitt’s Housing Plan
That brings us to Romney’s “plan to end the housing crisis.” Sounds pretty ambitious, doesn’t it?
So what exactly does it entail?
Well, for starters, Romney wants to unload the 200,000 vacant foreclosed homes owned by the government in a “responsible” fashion.
Romney says he’ll return these homes to productive uses and increase neighborhood values, but doesn’t specify how.
Additionally, he will facilitate foreclosure alternatives for those who can’t afford to make their mortgage payments.
Again, no specifics here, but it’ll be “creative.”
Next, Romney will replace the new “complex rules” born out of the crisis with “smarter regulations” that hold banks accountable and restart lending to creditworthy borrowers.
By the way, he blames Obama’s housing programs for making it more difficult for Americans to get a mortgage.
Last I checked, it’s more difficult to get a mortgage because they were handing them out to anybody with a pulse before the wheels fell off.
Finally, Romney plans to reform Fannie Mae and Freddie Mac, but again, doesn’t identify how.
Aside from not providing any details, it appears as if many of Romney’s “ideas” have already been implemented or addressed by the current administration.
And at the end of the day, there isn’t a magical solution to solve the current mess we’re in. It took time to get into this mess, and it will take many more years to get back on track, that is, before the next crisis hits.
When buying a home, it can be challenging to know what to look for. Should you look for a garage, a spacious bedroom or even a big driveway? You could, but you should also look for structural aspects of the home. Ensuring that the house you are buying is made with quality materials that will not either wear down or break, will project a happy and safe home ownership.
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Below are the specific things you should look for in a house to make sure that your future home will stand strong!
Exterior Face
The base of a house is what keeps it afloat. Making sure that you have a safe foundation is key.
Brick is very low maintenance and long-lasting but there are limited colour options and it does get quite expensive. Brick is also eco-friendly and is resistant to fire and infestations that may occur. It is also a great temperature regulator that can increase the comfortability of your home.
Vinyl Siding is quite durable in various weather conditions and is significantly cheaper but it is not as eco-friendly and can be susceptible to leaks. Though vinyl siding doesn’t require a lot of maintenance, in the case that it does break or tear, the entire plank will need to be repaired which can become costly.
Roofing
Metal roofing is more expensive, lasts usually twice as long as asphalt, endures worse weather, has better energy efficiency and tends to weigh less, putting less stress on your foundation.
Asphalt roofing is cheap and easier to install, it is somewhat durable but can be damaged with weather.
Slate roofing is made up of tiled slates that can come in various colours. This roofing type is very durable, fire-resistant and eco-friendly as it can be recycled. The downsides are that it is very expensive, heavy and takes a lot of work and precision to install.
Foundation
Looking for the foundation can help buyers avoid costly repairs if it is already damaged and possibly leaking. Always remember to ask the realtor about the foundation if it is not visible. Here are the three types of foundations:
Insulation concrete form incorporates insulated forms and poured cement. This option is expensive but increases energy efficiency and is far stronger than any other form.
Poured cement is the standard foundation for many homes. It is reliable and durable with a lesser tendency to crack while being easier to repair if needed.
A cement block wall is more prone to leaking because of cracks that can occur and is harder to fix, but is the more affordable option.
Windows
It is also important to inspect the windows on the property and make sure that they are operating properly. Faulty windows can spike your energy bill and be a safety concern. Here’s what to do and look for:
Double-pain glass is something to look for as this means that you have quality windows. This helps with sound, energy efficiency and durability.
Research the manufacturer of the windows if you can’t tell to see the credibility of the window and if it is a quality brand.
See if they are operating properly. Are they moving smoothly and sealing with no cold air seeping through?
Doors
Just like windows, it is vital to check your doors for operational malfunctions so you can enjoy your home to the fullest. Here’s what to look for:
Are they operating properly? Ensure that there is no air drafting through, no major cracks visible and that there is no condensation between the glass panel of your door.
Check the weather stripping around the door to ensure proper sealing which helps with energy efficiency and comfortability.
Are you currently looking for a property? Call us today to talk with one of Zoocasa’s experienced real estate agents to guide you through the exciting home-buying journey!
Inside: Are you looking for ways to make money while you’re still in college? This guide has a variety of ideas for side hustles for college students that can help you get started. From online businesses to odd jobs, there’s something for everyone.
Are you a college student searching for ways to increase your income and improve your financial situation while balancing your academic commitments? We’ve got your back!
In this student-friendly guide, we’ll share side hustles for college students, giving you many opportunities to earn extra cash.
You can even learn to get paid to go to school!
Whether you’re tech-savvy, creative, or inclined towards offline work, you’ll find something that suits your preferences.
Let’s jump in and explore how you can transform your free time into a valuable money-making asset!
What is a Side Hustle?
Simply put, a side hustle is like having a little extra adventure on the side while you’re busy with your main gig, which in this case might be college classes.
It’s your chance to boost your finances and gather valuable experience that could pave the way for future career opportunities. It’s like adding a dash of extra flavor to your college life along with extra cash!
What side hustles can I do as a college student?
As a college student, you possess a unique set of skills and resources that can be leveraged to generate income.
Whether you aspire to know how to make quick money in one day or debate what should I do for a living, opportunities await you.
Stay tuned for the second part of this article, where we’ll explore a treasure trove of side hustles perfectly tailored for college students.
What can I do to make extra money as a college student?
As a college student, there are various ways to earn extra money.
Most importantly, you need to find something that works well into your college schedule.
That is why many college students prefer to learn how to make money online for beginners. That gives them the chance to make money on their time from their campus or anywhere else they choose to move.
Now, let’s move on to the best online and offline side hustles for college students that may be of interest to you.
This post may contain affiliate links, which helps us to continue providing relevant content and we receive a small commission at no cost to you. As an Amazon Associate, I earn from qualifying purchases. Please read the full disclosure here.
Best Online Side Hustles for College Students
As the digital era continues to expand, opportunities for online side hustles are becoming more prevalent.
These side gigs leverage the power of the internet allowing flexibility, diversity, and potential profitability without sacrificing full-time commitments.
From millennials to retirees, are venturing into online side hustles to supplement their income, make use of their skills, or explore new career paths.
1. Write Articles for Websites
If you have a flair for writing, you can explore freelance opportunities as a content writer for websites and blogs. Numerous online platforms offer paid writing gigs.
Create a portfolio of your writing samples, sign up on freelancing websites like Upwork or Fiverr, and start bidding on writing projects.
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2. Build Websites
If you’re tech-savvy and have web design skills, offer website design services to individuals or small businesses looking to establish an online presence.
Showcase your web design work through a portfolio website, network with potential clients, and consider joining platforms like WordPress or Wix for easy website creation. Just make sure to use Kadence WP for themes!
This is a great gig for college students because you can take on more clients during your school breaks and none during finals week.
3. Starting an Etsy Business Selling Printables
Creating printables on Etsy is a popular and potentially profitable endeavor. It involves designing digital products that users can download and print at home.
Find the most popular digital products to sell on Etsy.
Beyond imagination and design skills, it is essential to learn how to optimize product descriptions and pricing, for which you can turn to comprehensive online courses. By following this how to sell printables course, you can equip yourself with the right tools to excel in this Etsy niche.
4. Create Videos
As a college student, there are two possible avenues for this side gig.
You can start a YouTube channel or offer video creation/editing services.
If you choose to venture into your own YouTube challenge, then you are able to monetize your videos through ads and sponsorships. Most importantly, you need to choose a niche for your YouTube channel, then create engaging content, and build a loyal audience.
Don’t want to be in the limelight? You can also offer video editing services on freelancing platforms.
5. Start a Blog
Share your knowledge or passion through a blog and monetize it through affiliate marketing, sponsored posts, and ads.
Pick a niche you’re passionate about, set up a blog using platforms like WordPress and Kadence theme, and consistently publish high-quality content.
This is not for the faint of heart, but college students traditionally have better success because of promotion through social media and engaging with readers.
6. Start an E-commerce Business
Launch your online store selling products you’re passionate about. Platforms like Shopify make it easy.
Source or create your products, set up an e-commerce website, and market your products through social media, email marketing, and search engine optimization.
One of the main benefits is an e-commerce business with low start-up costs, low ongoing maintenance, and the ability to remain open and generate sales 24/7.
7. Become a Freelancer
Explore freelance platforms for various opportunities like graphic design, programming, or digital marketing.
As a freelancer, you can work remotely and at your own pace. Create a compelling freelancer profile, showcase your skills, and bid on projects that match your expertise on platforms like Upwork, Freelancer, or Guru.
This is a great way to start building your portfolio of experience.
8. Write Your Classmates’ Cover Letters and Resumés
Engaging in the preparation of your classmates’ cover letters and resumes can be a rewarding side hustle.
Many employers today express concern about the lack of well-written cover letters and resume submissions they receive. By capitalizing on your writing skills, you can provide a much-needed service for your peers while earning some income.
Hence, build your proficiency with practice resumes, then decide on your charge per each document created.
9. Sell Stock Photos
If you have photography skills, sell your photos on stock photography websites like Shutterstock.
This is a perfect side hustle for young adults because you are constantly capturing the moments.
To get started, create an account on stock photography platforms, upload high-quality images, add relevant keywords, and start earning royalties when your photos are downloaded.
10. Write eBooks
Capitalize on your expertise in a specific subject and create eBooks to sell on platforms like Amazon Kindle Direct Publishing. Design an eye-catching cover and promote your eBook through social media and book-related forums.
This is the first step to passive income before you even graduate!
11. Proofreading
Proofreading can be a fruitful side hustle for students looking to earn extra money.
By leveraging your writing skills, you can charge a fee to proofread and edit classmates’ assignments, theses, or essays. Also, many small businesses are always looking for help!
With platforms like Fiverror college bulletin boards, you can advertise your services and set your own rates, potentially making $25–$45/hour according to proofreading expert Caitlyn Pyle.
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12. Start a Podcast
Starting a podcast can be an excellent revenue stream, given the significant increase in podcast listenership, with 82 million Americans being weekly podcast listeners according to a 2021 study.1
Your revenue can come from sponsorships, donations, and offering premium content or services. It’s essential to plan your podcast content aligning with your targeted audience and consistently producing high-quality episodes to grow and maintain your listener base.
13. Work as a Virtual Assistant
If you’re looking to start as a virtual assistant without prior experience, don’t worry!
Many businesses look for virtual assistants for tasks like email management, data entry, or social media management. Find out exactly what is needed with this virtual assistant checklist.
Plus working as a virtual assistant offers the flexibility to work remotely, which is a benefit for a college student.
Learn how to jumpstart your side hustle with this free Virtual Savvy training.
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If you’ve ever wanted to make a full-time income while working from home, you’re in the right place!
This intensive training combines thousands of hours of research, years of experience in growing a virtual assistant business, and the power of a coach who has helped thousands of students launch and grow their own businesses from scratch.
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Best Offline Side Hustles for College Students
In this section, we delve into the world of in-person side hustles.
Ideal for those preferring tangible interactions and a more predictable income, these opportunities demand physical presence and often offer good remuneration for physical labor.
However, they come with their own set of challenges like fixed service hours and potential clashes with a busy schedule.
1. House Sitting
House sitting is an excellent side hustle for college students.
You can offer your house-sitting services to neighbors or anyone going on vacation. It’s all about providing peace of mind to homeowners by ensuring their property is secure and well-maintained.
Build trust in your community by offering reliable house-sitting services, and word-of-mouth recommendations will follow. Consider promoting your services through Trusted Housesitter.
2. Food Delivery Driver
This is an extremely easy way to make money.
Sign up as a food delivery driver for platforms like UberEats or DoorDash. After registering as a driver and meeting the platform’s requirements, you can start delivering food orders in your area.
This side hustle allows you to set your hours and earn extra cash while enjoying the freedom of the open road.
3. Offer Lawn and Gardening Services
For those with a green thumb or a passion for outdoor work, offering lawn and gardening services can be a lucrative side hustle.
All by helping homeowners in your area with lawn care and gardening tasks. Investing in basic gardening tools is essential, and you can advertise your services through flyers, local online groups, or by simply offering your services to friends and family.
In fact, this may turn into your full-time business like this high school student.2
4. Shovel Snow During the Winter
If you live in an area with snowy winters, don’t miss the opportunity to capitalize on it. Offer snow shoveling services to residents in your community.
Promote your snow shoveling services well in advance of the winter season to secure clients.
On a snowy day, you can easily make 200 dollars fast. Just by being prepared to respond promptly to snowfall, and ensuring that driveways and walkways are safe and clear.
5. Become a Tutor
Sharing your knowledge by becoming a tutor is not only a valuable service but also a great way to earn extra income.
You can tutor fellow students in subjects you excel in or offer your expertise to local school kids. You can also tutor your classmates who are struggling in class.
Advertise your tutoring services through college bulletin boards, social media, or tutoring websites.
6. Clean Houses and/or Offices
Cleaning services are in demand, and you can provide them to individuals or businesses in your area.
Invest in basic cleaning supplies and equipment, set competitive rates, and market your services through local ads, referrals, and social media.
A reputation for thorough and reliable cleaning can quickly build your clientele.
7. Edit Your Classmates’ Papers — For a Fee, Of Course
If you have strong writing and editing skills, consider offering your editing services to your fellow students.
Many students appreciate having their papers reviewed and improved by a peer.
Promote your editing services within your college network, showcase your skills, and offer reasonable pricing to attract clients. This can quickly spiral to making 300 dollars fast.
8. Become a Handyman or Handywoman
If you’re skilled in fixing household issues or performing basic maintenance tasks, this side hustle can be highly profitable.
Acquire a basic toolkit, and offer your handyman services locally. From minor repairs to assembling furniture, providing reliable and affordable solutions can earn you a good reputation and repeat business.
You can quickly get started on TaskRabbit today.
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9. Translator
This is a highly needed service! If you’re proficient in multiple languages, offering translation services can be a rewarding side hustle.
Create a portfolio that showcases your language proficiency and advertise your skills to businesses or individuals who require translation services.
Your ability to bridge language barriers can be a valuable asset to various clients.
10. Deliver Anything Else Someone Might Need
If you’re the proud owner of a vehicle or even a trusty bicycle, you can tap into the world of delivery services. While food delivery is a popular option, you can expand your offerings to deliver a wide range of items.
Consider offering delivery services for groceries, prescription medications, packages, and even care packages for college students.
People are always willing to pay for help.
11. Drive for Uber or Lyft
Becoming a rideshare driver with companies like Uber or Lyft is a popular side hustle that offers flexibility. Sign up as a driver, meet the platform’s requirements, and start offering rides to passengers.
The benefit is you can choose your working hours, making it convenient to fit around your class schedule.
12. Hauling Junk
Help people declutter their homes by offering junk hauling services. You’ll need access to a pickup truck or a vehicle with ample cargo space.
Advertise your services, establish rates based on the volume of items to be hauled, and provide efficient and responsible junk removal.
Seriously, I see three or more posts in my neighborhood with people asking for help to move their junk!
13. Turning Your Car into a Moving Advertisement
Ever wondered if you could make money while driving around town? Well, here’s an interesting side hustle idea – turning your car into a moving advertisement.
Some companies are willing to pay you to wrap your car with their branding, turning it into a rolling billboard.
As you cruise through town, you’ll not only earn money but also become a conversation starter. It’s a unique way to earn extra income while sparking interesting discussions about the products or services you’re promoting.
14. Offer Moving Services
Assisting with local moves can be physically demanding but financially rewarding. Advertise your moving services locally, and consider forming a team if necessary.
Ensure you have the necessary equipment, such as dollies and moving blankets, to facilitate the moving process. By providing a smooth and efficient moving experience can lead to positive reviews and referrals.
15. Entertaining Kids at Birthday Parties
Entertaining children at birthday parties is a profitable side hustle for college students, especially those who have a knack for acting or enjoy engaging with children.
This venture could earn you between $50 and $100 per hour.
Develop a repertoire of entertaining acts, start promoting your services through local event planners and social media, and offer packages for different party sizes.
16. Teach Music or Sports Lessons
Share your musical or athletic skills by offering lessons to aspiring learners.
Whether you’re skilled in playing an instrument, coaching a sport, or giving dance lessons, there’s likely a demand in your community. Advertise your lessons through flyers, social media, or local community centers.
Make sure you have the necessary equipment and expertise to provide quality instruction. This is what I did in high school and college.
17. Proctor Tests
If your college conducts exams, there may be opportunities for students to work as test proctors for a fee. Inquire about proctoring opportunities at your college’s testing center or academic department.
This can be a convenient way to earn extra income without straying far from your campus.
18. Become a Legal Street Performer
If you have a talent for street performing (e.g., playing music or juggling), consider performing in public spaces for tips.
Choose a suitable location, prepare your act, and follow local regulations for street performances.
Could you make $1000 in a day?
19. Be a Lifeguard
Lifeguarding is a responsible job that requires attentiveness and quick response in case of emergencies. If you’re a strong swimmer with the necessary certifications, consider working as a lifeguard at local pools or aquatic centers.
Unfortunately, this is a high-stress and low-paying job. So, you are better off considering one of these low stress jobs that pay well.
20. Offer a Painting Service
Offering painting services can be a rewarding side hustle, especially for those who find the task peaceful and enjoy bringing a fresh new look to rooms or entire homes.
Most homeowners dread the prospect of painting their own homes and are often willing to hire a handyman to do the job. You can easily make 500 dollars fast.
With minimal initial investment in quality brushes and rollers, you can unleash your creativity and transform spaces with color and design, choosing your own hours and clients in the process.
21. Sign Up as a Substitute Teacher
Working as a substitute teacher is an excellent opportunity for individuals who do not necessarily have a teaching certificate but possess a high school diploma and a clean background check.
My husband, having served as a substitute teacher, found the experience to be rewarding when he was in college.
Not only did it pay well, averaging about $131 per day, but it also allowed him the chance to engage in student activities and provide value to the local school district.
22. Babysitting
Babysitting is a viable side gig, particularly suitable for early childhood education degree seekers, offering flexibility and a rewarding experience while caring for others’ children.
It involves variable commitments mostly during evenings, weekends, and some weekdays, with an average earning potential of $17 per hour.
Securing babysitting roles can be accomplished through personal connections, local community outlets, and digital platforms likeCare.com and Sittercity.
Why is college the best time to start a side hustle?
Before we bid adieu for now, let’s ponder why college is the perfect breeding ground for side hustles:
Flexibility: College schedules often come with pockets of free time, making it easier to juggle academic responsibilities and a side gig.
Learning and Growth: Side hustles offer valuable lessons in time management, financial literacy, and entrepreneurship that complement your academic knowledge.
Networking: Your college is a hub of potential clients, collaborators, and mentors, providing a fertile ground for your side hustle to thrive.
Financial Independence: Earning your own money allows you to alleviate the burden of student loans and gain financial independence.
Employing multiple streams of income is the savviest thing you could do for your finances and your long-term wealth.
Tips to be Successful with Your Side Jobs for Students
One of the best things about side hustles, is you are able to get real-life experiences and knowledge. This side hustle may or may not become your full-time job, but the skills are transferable.
The goal is to find success, so let’s explore some essential tips to succeed in your side hustles as a college student:
Time Management: Prioritize your college commitments and allocate dedicated time for your side hustle.
Skill Utilization: Leverage your skills, whether it’s writing, design, or a particular subject you excel in.
Online Presence: Create a portfolio or profile to showcase your skills and attract potential clients or customers.
Networking: Connect with fellow students, professors, and professionals who might offer opportunities or guidance.
Also, don’t give up if your first side justle doesn’t work out the way you hoped. Keep going until you find something you love to do!
Are You Ready To Start Hustling?
As you set off on your side hustle journey, keep in mind that consistency, dedication, and adaptability will be your trusted companions.
Whether you choose to dive into online opportunities, embrace offline endeavors, or strike a balance between the two, every experience will play a part in your personal and entrepreneurial growth.
If you are going to be in various locations during your college years, it is best to look for remote jobs for college students.
Your path towards financial empowerment is only just beginning, and we’re thrilled to be with you every step of the journey.
Between each college exam and class, you can make money to pay for your schooling. I think that is a win-win to pay for college without loans.
Start your side hustle today and get on the path to financial freedom with Money Bliss.
Source
Statistica. “U.S. Podcasting Industry – statistics & facts.” https://www.statista.com/topics/3170/podcasting/#topicOverview. Accessed on October 4, 2023.SSt
10 News. “A CEO at 17: How this Colorado teen transformed his side hustle into a legitimate business.” https://www.10news.com/news/green-worx-landscaping-golden-colorado. Accessed on October 4, 2023.
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Many people are lured into the world of real estate investing by stories of millionaires who started their journey with no money down or no steady employment. But the reality is that making money in real estate isn’t easy; a good credit score, investment capital and steady income can help in the beginning.
You’ll also need to grasp the nuances of the local real estate market and learn how to manage financial aspects such as cash flow and property taxes. While real estate buying, selling, and renting may not be much like a game of Monopoly, it is possible to earn steady side income, supplement your retirement, or even build a full-time real estate investment business with the right tools, knowledge, and patience.
Unlike mutual funds, the stock market, cryptocurrency or many other investments, real estate is tangible. Real estate is a concrete asset—one can see, touch, and even reside in. That gives investors a sense of security. However, it also creates unique challenges.
Managed well, the stability and passive income from rental properties can be a safety net against more volatile investments.
This guide is here to clarify the process for beginners. It aims to empower you to make informed decisions, reduce risks, and lay a strong foundation for your real estate investing journey.
Benefits of Investing in Real Estate
The allure of real estate goes beyond the mere ownership of tangible assets. It presents a robust suite of financial benefits that have the potential to amplify wealth and provide stability in uncertain times. As we navigate the advantages, it becomes evident why many seasoned investors prioritize real estate in their portfolios.
Steady and Passive Income
Real estate investing, especially in rental properties, stands out for its potential to provide a consistent revenue stream. When you own a rental property, the monthly or quarterly distributions from tenants contribute to steady income, which can safeguard your finances against unexpected events or economic downturns.
This consistency contrasts with the often erratic nature of the stock market, which can fluctuate daily based on global events, company performances, and other factors. Additionally, for those aiming to attain financial freedom, the passive income generated from real estate can be a step closer to achieving that goal. Over time, as the mortgage payment decreases or remains static, rental rates may rise, increasing your monthly cash flow.
Appreciation Potential
Every investor dreams of their assets appreciating, and real estate often doesn’t disappoint. While there can be periodic downturns in the real estate market, historical trends suggest that properties generally gain value over the long run.
This means that not only can investors benefit from rental income, but they can also potentially see substantial gains when they choose to sell the property.
Tax Benefits
Navigating the world of taxes can be intricate, but real estate investors often find several advantages here. The ability to deduct mortgage interest and property taxes from taxable income can be a significant financial boon.
Furthermore, strategies like depreciation allow real estate investors to offset rental income, reducing their tax burden. Consulting with a financial advisor can help investors maximize these benefits and understand other potential tax advantages, such as 1031 exchanges or deductions related to property management.
Diversification
The saying “don’t put all your eggs in one basket” is sound investment advice. Diversification is a fundamental strategy to mitigate risks. By adding real estate to an investment portfolio, investors introduce a separate asset class that doesn’t directly correlate with the stock market or mutual funds. This can provide a buffer, ensuring that a downturn in one sector doesn’t wholly derail an investor’s financial trajectory.
Leverage
Leverage, in the context of real estate investing, refers to the ability to use borrowed capital to increase the potential return on an investment. When you purchase property with a mortgage loan, you’re often putting down only a fraction of the property’s total cost, while still reaping the benefits of its entire value in terms of appreciation and rental income.
This magnifies the return on investment, as the gains and income generated are based on the property’s total value, not just the down payment. It’s a powerful tool but should be used wisely. Over-leveraging or not accounting for potential rental vacancies can turn leverage into a double-edged sword.
Types of Real Estate Investments
As one dives deeper into the world of real estate, it becomes evident that this asset class is multifaceted, with various avenues to explore and invest in. The right choice often depends on an investor’s goals, risk tolerance, budget, and expertise. Here’s a closer look at some prominent types of real estate investments:
Residential Properties
Residential properties cater to individuals or families. They range from single-family homes to duplexes, triplexes, high-rise buildings with apartments, and other multi-unit properties. You may encounter the term “MDU” or “MUD,” which stand for multi-dwelling unit or multi-unit dwelling, to describe anything more than a single family home, or SFR (single family real estate).
Investing in residential real estate, especially the SFR market, is often a beginner’s first step due to its familiarity and the perpetual demand for housing. While these properties can be a reliable source of rental income, investors should be prepared for the challenges tied to property management, tenant turnover, and ongoing maintenance.
Commercial Real Estate
When one thinks of skyscrapers lining city horizons or sprawling office parks in suburban locales, that’s commercial real estate. These properties are tailored to businesses, and can include complete corporate headquarters or individual offices.
Commercial leases often run longer than residential ones, offering the potential for stable, long-term rental income. However, the entry point can be higher, with larger down payments and a more extensive due diligence process. Additionally, commercial real estate values can be closely tied to the business environment of the locality.
Industrial
Industrial real estate encompasses properties like warehouses, distribution centers, and manufacturing facilities. They’re integral to business operations, ensuring products move efficiently from manufacturers to consumers.
Investing in this sector can offer substantial rental yields, especially if the property is strategically located near transportation hubs. However, the nuances of industrial real estate, such as zoning laws and environmental concerns, necessitate a more in-depth understanding than residential or commercial sectors.
Retail
This sector includes shopping malls, strip malls, and standalone stores. What’s unique about retail real estate is that leases sometimes include a provision where the landlord gets a percentage of the store’s profits, termed as “percentage rent.”
In a thriving commercial area, retail properties can be quite profitable, with long-term leases and the potential for appreciating property values. However, investors should be mindful of shifts in consumer behavior and the evolving retail landscape, especially with the rise of e-commerce.
Multi-Purpose Commercial
A new breed of commercial real estate has emerged to compete with the growth of e-commerce. Multi-purpose commercial spaces blend housing units with office space and retail, often adding hospitality and entertainment venues.
Typically, these spaces are the domain of large real estate investment and property management firms. But if you invest in commercial office space or retail, you will be competing with these multi-purpose properties for tenants, so they are worth acknowledging.
Real Estate Investment Trusts (REITs)
For those not keen on direct property ownership, REITs present an attractive alternative. These are companies that own, operate, or finance income-producing real estate across various sectors. What makes REITs distinctive is that they’re traded on stock exchanges, similar to stocks.
By investing in a REIT, you’re buying shares of a company that manages a portfolio of properties, thus gaining exposure to real estate without the hassles of property management. Moreover, by law, REITs are required to distribute at least 90% of their taxable income to shareholders, leading to potentially attractive dividend yields. However, it’s essential to remember that like all publicly traded entities, REITs can be subject to market volatility.
9 Ways to Invest in Real Estate
Investing in real estate can seem tricky for beginners. But, with time and patience, anyone can master it. Focus on simple investment methods first to get to know your local property scene, meet experienced investors, and learn how to handle money wisely. As you learn and grow, you can dive into more complex investment options.
Here are some great ways for beginners to start in real estate:
1. Wholesaling
Acting as the bridge between property sellers and eager buyers, this method primarily focuses on securing properties at a rate below the prevailing market value. The secured contract is then transferred to an interested buyer, ensuring a margin for the wholesaler.
2. Prehabbing
Unlike intensive property renovations, prehabbing is about amplifying a property’s appeal through minimalistic enhancements. These properties, once given their facelift, usually attract investors with a keen eye for larger renovation projects.
3. Purchasing Rental Properties
An avenue promising consistent returns, this involves acquiring properties to lease them out. For those not inclined towards the intricacies of landlord duties, there’s always the option of hiring seasoned property management professionals.
4. House Flipping
A strategy that has garnered significant attention, house flipping involves a cycle of purchasing, upgrading, and promptly reselling properties, aiming for a profit. The emphasis is on swift transactions and keen market acumen.
5. Real Estate Syndication
Envision a collective where like-minded investors come together, pooling both resources and expertise. Such collectives venture into large-scale property acquisitions, and the ensuing profits or rental incomes are distributed among the participants.
6. Real Estate Investment Groups (REIG)
Primarily, these are conglomerates that steer their operations around real estate investments. By amassing capital from a plethora of investors, they dive into acquisitions of sizeable multi-unit residences or commercial holdings.
7. Investing in REITs
Real Estate Investment Trusts (REITs) revolve around the ownership and meticulous management of properties that yield income. However, investors don’t have to handle the management themselves. Instead, participants can relish the benefits of the real estate sector without the responsibilities of direct property ownership.
8. Online Real Estate Platforms
A fusion of technology with real estate, these platforms seamlessly connect potential investors with vetted property developers. This synergy enables backers to finance promising property ventures and, in exchange, enjoy periodic returns that encompass interest.
9. House Hacking
A blend of homeownership and investment, house hacking is about maximizing the potential of a multi-unit property or a single-family home. Investors live in one segment while leasing out the remaining portions. This dual approach can significantly reduce or even negate monthly housing expenses, serving as an excellent introduction to the world of property management for novice investors.
6 Steps to Get Started in Real Estate Investing
Starting on the path of real estate investing requires careful planning, due diligence, and a methodical approach to ensure that your investments are sound and have the potential for fruitful returns. Whether you’re dreaming of becoming a millionaire real estate investor or merely looking to diversify your investment portfolio, following a structured process can be the key to success. Here’s a step-by-step breakdown:
1. Assess Your Financial Health
Every investment journey should begin with introspection. As an aspiring real estate investor, it’s essential to have a clear understanding of your current financial standing. Ask yourself questions like:
How much capital am I willing to invest?
What are my short-term and long-term financial goals?
Do I have an emergency fund set aside?
Evaluating your risk tolerance is equally crucial. Some might be comfortable flipping houses, while others might prefer the steadiness of rental properties. Consulting a financial advisor at this stage can provide insights tailored to your financial health, enabling you to make informed decisions as you proceed.
2. Dive Deep into Market Research
Knowledge is power in the world of real estate. The local market can be significantly different from national or even statewide trends. Delve deep into understanding:
The demand for rental properties in your target area.
The average property values and rental rates.
The historical appreciation rates.
Any upcoming infrastructure projects or urban development initiatives.
Furthermore, familiarize yourself with real estate terminology. Phrases like “cap rate,” “loan-to-value,” and “operating expenses” will become a regular part of your vocabulary. The better informed you are, the more confidently you can navigate your investments.
3. Assemble Your Real Estate Team
No investor is an island. Success in the real estate business often hinges on the strength and expertise of your team. Look for professionals with a proven track record and positive reviews. Your team might include:
Real estate agents who understand the investor’s perspective.
Property managers to streamline tenant interactions and maintenance.
Lawyers specializing in real estate transactions.
Accountants familiar with the tax implications of real estate investments.
4. Explore Financing Options
The path to acquiring a property is paved with various financing methods. Traditional mortgages are common, but the real estate industry offers other mechanisms like:
Hard money loans.
Private money loans.
Real estate syndication where multiple investors pool resources.
Seller financing.
Each of these has different pros and cons, interest rates, and repayment terms. Understand each deeply to determine which aligns best with your financial strategy.
5. Analyze Potential Properties
The crux of real estate investing is ensuring that the numbers make sense. Before purchasing, assess the property’s potential for generating rental income. Break down:
Monthly mortgage payments
Property taxes
Maintenance costs
Potential vacancy rates
Your goal should be a positive cash flow, where the monthly income from the property (rent) exceeds all these expenses.
6. Negotiate and Close the Deal
Once you’ve zeroed in on a property, the negotiation phase begins. Here, understanding the property’s market value, any existing damages or repair needs, and the local real estate market dynamics can give you an edge.
When it comes to closing, be aware of all associated costs. These might include inspection fees, title insurance, and escrow fees. Being well-informed can help you negotiate these fees and ensure that you’re not overpaying.
Risks and How to Mitigate Them
Like any investment, real estate comes with its set of challenges and uncertainties. The difference between successful real estate investors and those who falter is often the ability to anticipate risks and prepare for them. Here’s an exploration of some prevalent risks in real estate and actionable steps to manage them:
1. Market Fluctuations
Real estate markets can be volatile, with property values rising and falling based on a myriad of factors.
Mitigation: To protect against market downturns, it’s essential to buy properties below their market value. Conducting comprehensive research and seeking expert investment advice can help investors make informed decisions. Remember, real estate is often a long-term game, so a short-term dip can be offset by long-term appreciation.
2. Unexpected Repairs and Maintenance
Properties can often come with surprises, from plumbing issues to roof repairs.
Mitigation: Regular property inspections can catch potential problems before they become major expenses. Setting aside a buffer fund specifically for maintenance can also cushion the financial blow of unforeseen repairs.
3. Vacancy Periods
There might be periods where your property remains unoccupied, leading to loss of rental income.
Mitigation: Properly vetting and building a good relationship with tenants can lead to longer lease periods. Diversifying your investment properties across different areas can also help, as vacancy rates might vary from one location to another.
4. Legal and Tax Implications
Real estate investors can sometimes find themselves entangled in legal disputes or facing unexpected tax bills.
Mitigation: Regular consultations with a tax professional or attorney familiar with the real estate industry can keep investors informed and protected.
Long-term Strategy and Growth
Real estate investing is not just about making a quick buck; it’s about building lasting wealth. Adopting a long-term perspective and continuously refining your strategy can pave the way for consistent growth in the real estate industry. Here’s how:
1. Define Your Real Estate Identity
Are you more comfortable with a buy-and-hold strategy, where properties are retained for long-term growth and steady rental income? Or do you thrive on the excitement of flipping houses, where properties are bought, renovated, and sold for profit? Understanding your preference can help tailor your investment strategy.
2. Reinvestment is Key
For those adopting a buy-and-hold strategy, reinvesting the rental income can substantially grow your real estate portfolio. By channeling profits into purchasing additional properties, investors can benefit from compounded growth.
3. Diversify Your Portfolio
As you gain experience, consider diversifying across various real estate sectors. Branching out into commercial real estate or exploring real estate investment trusts (REITs) can provide additional avenues for income and growth.
4. Continue Your Education
The real estate industry is continually evolving. By staying updated on market trends, attending seminars, and networking with other real estate professionals, you can adapt your strategy and seize new opportunities as they arise.
5. Scale Strategically
A real estate empire begins with just one property. With time, dedication, and a sound strategy, it’s possible to grow your holdings into a substantial full-time income. As you scale, ensure you’re not overextending; always prioritize the quality of investments over quantity.
Key Tips for Beginners
Embarking on a journey into real estate investing can be thrilling, yet the complexities of the industry can sometimes overwhelm beginners. Simplifying the learning curve is essential for novice investors to make informed decisions and find success. Here are some pivotal tips to guide those just starting out:
1. Start Small and Scale Gradually
Many millionaire real estate investors began their journey with a modest property. Purchasing a smaller, more manageable property as your first investment can help you navigate the nuances of the real estate business without being overwhelmed. As you gain confidence and experience, you can then venture into bigger and more diverse properties to scale your portfolio.
2. Prioritize Education
The world of real estate is vast and ever-evolving. Leverage online real estate platforms to learn about market trends, investment strategies, and financing options. Additionally, joining real estate investment groups can be invaluable. These groups not only provide mentorship but also offer opportunities to share resources, insights, and deals with other investors.
3. Location is Crucial
In the real estate realm, location often takes precedence over the type or condition of a property. A mediocre house in a prime location can fetch better returns than a grand mansion in a less desirable area. Research local market dynamics, neighborhood amenities, future development plans, and other location-specific factors before making an investment decision.
4. Networking is Key
Surrounding yourself with knowledgeable people can fast-track your learning process. By connecting with seasoned real estate investors, you can gain insights from their experiences, avoid common pitfalls, and even discover potential partnership opportunities. Attend local real estate seminars, join investor forums online, and participate actively in real estate conferences to grow your network.
5. Stay Updated and Adapt
The real estate industry is not static. Market conditions, property values, and investment strategies can change. Being adaptable and staying updated on industry trends will ensure you remain ahead of the curve and can capitalize on new opportunities.
6. Always Conduct Due Diligence
Before diving into any real estate transaction, thorough due diligence is imperative. From understanding property taxes and zoning laws to estimating potential repair costs and evaluating tenant profiles, leaving no stone unturned will protect you from potential setbacks.
8 Terms Beginner Real Estate Investors Should Know
Venturing into real estate can feel like you’ve entered a world with its own language. Don’t worry; everyone feels this way at the start. Knowing basic real estate terms can help you communicate confidently and make informed decisions.
Dive into these essential terms every beginner should grasp:
Appreciation: Appreciation is the increase in the value of a property over time. It’s one of the primary ways real estate investors make money, especially in growing markets. Appreciation can result from factors like inflation, increased demand, or improvements made to the property.
Capitalization rate (cap rate): Think of the cap rate as a tool to gauge the potential return on a property. It’s a percentage derived from comparing a property’s net operating income to its current market price.
Cash flow: This term captures the money dance – what’s coming in and what’s going out. In the context of rental properties, it means the rental earnings minus all the costs. Positive cash flow indicates you’re earning more than you’re spending.
Equity: Equity represents the value of ownership in a property. It’s calculated by taking the market value of the property and subtracting any outstanding mortgage or loans against it. As an investor pays down their mortgage or if the property appreciates in value, their equity in the property increases. This equity can be tapped into for various financial needs or reinvested.
Leverage: This term refers to the concept of using borrowed money, often in the form of a mortgage, to invest in real estate. It allows investors to purchase properties with a small down payment and finance the remainder. When used correctly, leverage can amplify returns, but it can also increase the risk if property values decline.
Net operating income (NOI): Simplified, NOI is the profit made from a property after deducting all operational costs. It’s your rental income minus all the expenses, showing the true earning potential of a property.
Real estate owned (REO): An REO property is one that didn’t sell at a foreclosure auction and is now owned by the bank. These properties are often sold at a lower price because banks aim to sell them quickly, making them attractive to investors.
Return on investment (ROI): In simple terms, ROI measures the bang you get for your buck. It’s calculated by comparing the profit you made to the amount you invested. The higher the ROI, the better your investment performed.
Conclusion
Real estate investing offers an avenue to diversify your portfolio, generate steady income, and potentially achieve long-term growth. With due diligence, a clear strategy, and the right team, beginners can successfully navigate the complexities of the real estate industry and lay the foundation for a prosperous investment journey. Remember, every millionaire real estate investor started with their first property. Your journey is just beginning.
The mere thought of filing for bankruptcy is enough to make anyone nervous. But in some cases, it really can be the best option for your financial situation. Even though it stays as a negative item on your credit report for up to ten years, bankruptcy often relieves the burden of overwhelming amounts of debt.
There are actually three different types of bankruptcy, and each one is designed to help people with specific needs. Read on to find out which type of bankruptcy you might be eligible for. We’ll also help you determine whether it really is the best option available.
What are the different types of bankruptcy?
In general, bankruptcy is the process of eliminating some or all of your debt, or in some cases, repaying it under different terms from your original agreements with your creditors.
It’s a very serious endeavor but can help alleviate your debt if you calculate that it’s unlikely to you’ll be able to repay everything throughout the coming years.
The two most common for individuals are Chapter 7 and Chapter 13. Chapter 11 is primarily used for businesses but can apply to individuals in some instances. Let’s take a look at some bankruptcy basics and the other details that set them apart from each other.
Chapter 7 Bankruptcy
Chapter 7 bankruptcy is designed for individuals meeting certain income guidelines who can’t afford to repay their creditors. You must pass a means test to qualify. Then, instead of making payments, a bankruptcy trustee can sell your personal property to help settle your debts, including both secured and unsecured loans.
There are certain exemptions you can apply for to keep some things from being taken away. It all depends on which debts are delinquent. If your mortgage is headed towards foreclosure, you might only be able to delay the process through a Chapter 7 delinquency.
If you’re only delinquent on unsecured debt, like credit card debt or personal loans, then you can file for an exemption on major items like your home and car. That way they won’t be repossessed and auctioned off.
Eligible exemptions vary by state. Usually, there is a value assigned to your assets that are eligible for exemption. You may keep them as long as they are within that maximum value. For example, if your state has a $3,000 auto exemption and your car is only valued at $2,000 then you get to keep it.
Most places also allow you to subtract any outstanding loan amount to put towards the exemption. So, in the situation above, if your car is valued at $6,000, but you have $3,000 left on your car loan, then you’re still within the exemption limit.
Chapter 7 bankruptcy is the fastest option to go through, lasting just between three and six months. It’s also usually the cheapest option in terms of legal fees. However, keep in mind that you’ll likely have to pay your attorney’s fees upfront if you choose this option.
Chapter 13 Bankruptcy
A chapter 13 bankruptcy is the standard option when you make too much money to qualify for a Chapter 7 bankruptcy. The benefit is that you get to keep your property but instead repay your creditors over a three- to five-year period. Your repayment plan depends on several variables.
All administrative fees, priority debts (like back taxes, alimony, and child support), and secured debts must be paid back in full over the repayment period. These must be paid back if you want to keep the property, such as your house or car.
The amount you’ll have to repay on your unsecured debts can vary drastically. It depends on the amount of disposable income you have, the value of any nonexempt property, and the length of your repayment plan.
How long your plan lasts is actually determined by the amount of money you earn and is based on income standards for your state. For example, if you make more than the median monthly income, you must repay your debts for a full five years.
If you make less than that amount, you may be able to reduce your repayment period to as little as three years. You can enter your financial information into a Chapter 13 bankruptcy calculator for an estimate of what your monthly payments might look like in this situation.
To qualify for Chapter 13, your debts must be under predetermined maximums. For unsecured debt, your total may not surpass $1,149,525 and your secured debt may not surpass $383,175. However, unlike Chapter 7 bankruptcy, you may include overdue mortgage payments to avoid foreclosure.
Chapter 11 Bankruptcy
Chapter 11 bankruptcy is usually associated with companies. However, it can also be an option for individuals, especially if their debt levels exceed the Chapter 13 limits. A lot of the characteristics of Chapter 11 and Chapter 13 are the same, such as saving secured property from being repossessed.
Having to pay back priority debts in full and having a higher income bracket than a Chapter 7 bankruptcy are also common characteristics. However, unlike Chapter 13, you must make repayment for the entire five years with a Chapter 11. There is no option to pay for just three years, no matter where you live or how much you make.
Another reason to pick Chapter 11 is if you are a small business owner or own real estate properties. Rather than losing your business or your income properties, you get to restructure your debt and catch up on payments while still operating your business, whether it’s as a CEO or as a landlord.
One downside to be aware of with a Chapter 11 bankruptcy is that it’s usually the most expensive option. However, you can pay your legal fees over time so you don’t have to worry about spiraling back into debt.
What are the long term effects of bankruptcy?
It should come as no surprise that going through bankruptcy causes your credit score to plummet. Depending on what else is on your report, your score could drop anywhere between 160 and 220 points.
Those effects linger. A Chapter 13 bankruptcy stays on your credit report for seven years. And a Chapter 7 bankruptcy remains there for as many as ten years. Their effects on your credit score do, however, begin to diminish as time goes by.
You’ll probably have trouble getting access to credit immediately following your bankruptcy. Eventually, you’ll start getting approved for loans and credit cards, but your interest rates are likely to be extremely high.
A new mortgage will probably be out of reach for at least five to seven years from the time you file for bankruptcy. Additionally, any employer performing a credit check can see all of these items on your credit report.
Government agencies can’t legally discriminate against you because of your bankruptcy, but there is no specific rule for privately-owned companies. It could be particularly damaging if the job you’re applying for deals with money or any type of financials. No matter where you work, though, you can’t be fired from a current employer because of a bankruptcy.
Should I file bankruptcy?
There’s no correct answer to this question. It’s ultimately something you’ll need to decide on your own. However, there are a few things you can do to make sure you’re making the best decision possible. Start by finding a licensed credit counselor to help analyze your individual situation. They’ll help you review the guidelines for each type of bankruptcy and determine if you’re even eligible.
At first glance, filing for bankruptcy may seem like a great way to settle your debts and move on with your life. Unfortunately, the process isn’t as simple as filling out a form. The effects of bankruptcy will stick with you for years.
As you begin the evaluation process of whether bankruptcy is right for you, there are several considerations to consider. This overview will get you thinking about your situation. It will also point you in the right direction for more in-depth resources when you need them.
Is your current status temporary or permanent?
You should also look at your expected future and compare your potential earnings to your amounts of debt. If you don’t see how you’ll ever pay off that debt, then bankruptcy may be a wise option. Also, understand the types of debt you owe. Tax payments, student loan debt, and liens on your mortgage or car will not be discharged even when you file for bankruptcy.
Once you figure out which specific options are available to you, it’s time to contact a bankruptcy attorney. You’re certainly able to represent yourself, but the process is complicated. It’s usually best to have a professional work on the case on your behalf. Just be sure to interview a few different lawyers to get multiple opinions and prices to compare.
Evaluate Your Situation
Even when your bankruptcy is underway, it’s smart to spend some time evaluating how you got there. Was it due to a one-time financial hardship, like a long bout of unemployment? If that’s the case, then you know that you have a brighter future ahead of you with the promise of work and steady income to pay your bills.
However, if you’re on the path to bankruptcy because of reckless spending, you really need to look inward and address your overspending habits. Otherwise, it becomes too easy to put yourself in the same situation a few years down the road. Use your bankruptcy as a second chance to start fresh with a clean financial slate.
Why Consider Bankruptcy?
If you’re considering bankruptcy, then you’re most likely feeling overburdened with debt and other financial obligations. You probably have a tough time paying your bills each month and may even worry about how you’ll ever pay off some of your outstanding balances.
If you’ve already exhausted your other options, like working overtime and cutting back on your non-necessities, it might be time to seriously think about potentially declaring bankruptcy. Some signs that you might be ready include:
Increased interest rates because of late payments or bad credit
Using credit cards for daily purchases without paying off the balance each month
Already downsized things like house, car, and other assets
Working multiple shifts or jobs
Paying off debt with retirement funds
Wages are being garnished
If one or more of these situations apply to you, then you should probably continue your research into bankruptcy. If not, try finding other ways to improve your financial situation. For example, you could rework your budget if there are easy places to cut back on.
You can also try negotiating with your lenders, particularly if you’re experiencing just a short-term setback. Most lenders are willing to work with you. They would much rather set up a new payment plan than have the debt discharged or settled through bankruptcy.
Bankruptcy Alternatives
If you want to file for bankruptcy it takes careful planning. Due to the long-term legal and financial consequences of bankruptcy, there are many rules that must be followed before you’re eligible.
For example, it’s necessary to show the bankruptcy court that you have obtained credit counseling and considered debt relief options like debt settlement or debt consolidation. Bankruptcy is controlled exclusively by the federal judicial system, which strongly recommends hiring an attorney before attempting to file.
If you need help finding a bankruptcy lawyer, contact the American Bar Association. They offer free legal advice, and you may qualify for free legal services if you are unable to afford an attorney.
Creating a Checklist to Avoid Dismissal
Before you file for bankruptcy, there are several important questions you should ask yourself. There are also several key steps that you need to take. First, it’s necessary to ask yourself if you really need to file for bankruptcy.
If you don’t, you probably won’t be approved anyway. You also need to calculate income, expenses, and assets, find a trustworthy attorney, and select a credit counseling program.
It’s helpful to be methodical and to use a checklist. Failure to take the right steps and find the right credit counseling could result in more wasted money and a bankruptcy dismissal where they throw out the case.
Reasons to Delay Bankruptcy
Even if bankruptcy is the best choice for you, there may be some situations where it’s smart to delay the process so you can maximize your benefits. First, if you had a high income within the last six months that no longer applies to your situation, then you might want to wait.
That’s because the bankruptcy court weighs your last six months of income to determine your eligibility for Chapter 7 bankruptcy. If you had a nice monthly salary a few months ago but have been laid off since then, that means test isn’t going to reflect your current situation accurately.
Another reason to delay bankruptcy is if you are anticipating an upcoming major debt. New debt isn’t allowed to be discharged once you file for bankruptcy.
So, for example, if you’re about to have a major medical surgery, you might consider waiting until it’s over to include the medical bills as part of your bankruptcy plan. Talk to a professional to see the eligibility requirements. Luxury items charged right before a bankruptcy filing, for example, likely won’t be included as part of your debt discharge.
Changes in Bankruptcy Law
Before getting started, it’s important to note the changes that went into effect in 2005 under the Bankruptcy Abuse Prevention and Consumer Protection Act (BAPCPA). While the changes don’t affect some people applying for bankruptcy, they may affect others.
Federal bankruptcy laws require mandatory credit counseling to make sure you fully understand the consequences of declaring bankruptcy. It also created stricter eligibility requirements for Chapter 7 bankruptcies. For Chapter 13 bankruptcy filings, the law requires tax returns and proof of income.
An informed decision begins with understanding bankruptcy laws, the bankruptcy process, and what has changed. It’s essential to better understand these changes before you make any final decisions.
Filing Under Chapter 7 or Chapter 13
Understanding how bankruptcy works means understanding the process and laws related to Chapters 7 and 13 of the Bankruptcy Code. Depending on the details of your situation, you might be eligible to file under Chapter 7 or Chapter 13. Which route you choose has a lot to do with your income and what assets you want to keep.
Your debts can either be resolved quickly or over a several-year period. It’s helpful to read up on in-depth frequently asked questions related to each route.
Calculating Chapter 7 Means
To have all your unsecured debts eliminated under Chapter 7 bankruptcy, you must qualify under the Chapter 7 means test. Using your personal information, or a basic estimate, an online calculator can help determine this for you. When filing bankruptcy, you must also fill out an appropriate form in which you enter your income, expense information, and data from the Census Bureau and IRS.
If you don’t meet the income level requirements to file for Chapter 7 bankruptcy, you can still file for Chapter 13. A Chapter 13 will settle many of your debts after you successfully complete a three to five-year repayment program.
Qualifying and Qualifying Debts
Your debts qualify for bankruptcy relief when you can prove you are unable to pay them, but a great deal depends on your situation and which chapter you are filing bankruptcy under. Debts can be either unsecured or secured. Secured debts include mortgages, cars, and debts related to a property you’re still paying for.
Unsecured debts include credit card debt, bills, collections, judgments, and unsecured loans. It’s important to know which debts qualify for bankruptcy. But, it’s even more important to know whether your situation makes you eligible for this major step. To determine this, a full financial assessment is necessary. You can start by reading more about debts that qualify.
Defaulting on a Student Loan
If you have defaulted on a student loan, there are several options open to you. Bankruptcy is one of them, but if your goal is to have a student loan discharged under Chapter 7, this can be very difficult.
Nevertheless, taking certain steps as soon as possible can help prevent wage garnishment. Knowing your options can help you make the best choice before matters become more difficult. Under Chapter 13, your defaulted loan can be consolidated with your other bills. This will give you a better payment plan or a temporary reprieve from making payments.
If you have a federal student loan, check out your repayment options, especially if you are facing financial hardship. Otherwise, read more to figure out how to pull yourself out of student loan default.
What Assets You Can Keep During Bankruptcy
Depending on how you file for bankruptcy, there are certain assets you can keep. Different states have different exemptions, and in certain states, you can choose between state and federal bankruptcy exemptions.
If you need to have debts discharged, are out of work, and cannot afford a repayment plan, some assets might be lost. In most cases, however, people who declare bankruptcy can keep their homes and cars and much of what they own while they repay their debts under a modified plan. It all depends on your unique circumstances and how you file.
Get a FREE Credit Evaluation Before You File Bankruptcy
A bankruptcy can affect your credit for 7 to 10 years and should be considered a last resort option when all other options have failed. Many times, people file bankruptcy when it is completely unnecessary. A credit professional can help you fix your credit and deal with your creditors so you can avoid filing for bankruptcy.
Before filing bankruptcy, talk to a credit specialist:
Visit the website and fill out the form for a free credit consultation with a professional credit repair company.
In an e-mail sent out today to business partners, Indymac warned about and provided general guidance regarding the “buy and bail” phenomenon allegedly sweeping the industry.
The Wall Street Journal brought the problem to light yesterday in an article that explained how borrowers with underwater mortgages purchased nearby homes at a discount and then stopped making mortgage payments on their existing homes until they fell into foreclosure.
While it may seem like a complicated endeavor, the article noted that some borrowers were doing it with relative ease, while others received coaching from real estate agents and mortgage brokers.
And so now Indymac has warned business partners to be “extra vigilant” when their borrowers are looking to purchase owner-occupied homes if they already own existing property.
The e-mail said to be especially careful in hard-hit markets in Arizona, California, Florida, and Nevada, noting that lending to borrowers who are about to bail is much the same as lending to a borrower with a recent foreclosure, which is strictly prohibited by the GSEs and the FHA.
The mortgage lender advised that borrowers in these situations should generally have a minimum of 20 percent home equity in their existing property, no mortgage lates, and the capacity to repay current obligations.
Additionally, they should put down at least 20 percent on the new property, and “extreme caution” must be taken if their current property was recently listed.
The e-mail noted that “buy and bail” is becoming a significant problem, adding that the FHA, Fannie Mae, and Freddie Mac have already instructed underwriters to proceed with such deals cautiously.
There have been widespread reports and warnings that Hurricane Sandy will dampen the ongoing housing recovery at a time when things are already rather tenuous.
Bloomberg noted that one of every five U.S. home sales is located in the areas affected by the storm, which extends from Virginia to Massachusetts and beyond.
Things have been so bad that real estate agents have reportedly had to pull down their for sale signs to avoid seeing them turn into dangerous projectiles.
As a result, home sales are going to come to a standstill in the expansive area.
Additionally, some transactions will probably fall through entirely as a result of the storm if the damage is severe enough, even pending refinances if lenders aren’t willing to take out a loan on a newly-damaged property.
The Mortgage Bankers Association president David Stevens also warned that home sales and mortgage applications will be lower as a result of the storm.
And loans in process will likely be “frozen” until home inspectors can get out to the properties to assess the damages.
This means properties that were already inspected and appraised will likely need to be given another look.
I can only imagine the havoc as lenders try to deal with mortgage locks, extensions and other deadlines with the bond markets closed.
Meanwhile, analytics firm CoreLogic has estimated that roughly 284,000 properties are at risk of damage from Hurricane Sandy.
And the value of those properties is a staggering $88 billion, so you better believe there will be a meaningful impact. Insurance companies are also going to be hit hard.
As you can see from this chart, New York residents are expected to see the most damages, followed by New Jersey then Virginia.
Freddie Mac Offers Relief to Hurricane Sandy Victims
Government mortgage financier Freddie Mac has already come forward to pledge relief for homeowners suffering as a result of Hurricane Sandy.
The company said its “full menu of relief policies” is being extended to borrowers (with Freddie Mac owned or guaranteed mortgages) whose homes have been damaged or destroyed by the merciless Sandy.
Freddie Mac has authorized the nation’s largest loan servicers to provide the following forms of relief:
– Mortgage payment forbearance (up to 12 months) – Foreclosure suspension (up to 12 months) – Eviction suspension (up to 12 months) – Waiving of penalties and/or late fees – Not reporting forbearance/delinquencies to credit reporting bureaus
Eligible homeowners include those located in jurisdictions that President Obama has declared to be “Major Disaster Areas” and where he has made Individual Assistance programs available.
If you believe you’re affected and need more information, you can contact your own loan servicer and/or Freddie Mac at 800-FREDDIE.
Keep in mind that loan servicers have been instructed to offer help to borrowers on a case-by-case basis, so you will need to prove your point.
I expect sister company Fannie Mae will more than likely offer the same type of relief, though the company has not yet sent along a press release.
It’s also likely that individual lenders will offer relief to those affected by Sandy, so be sure to inquire with your lender if you need assistance. Most banks have already waived fees and offered up payment options for mortgages and home equity lines of credit.
Model/actress Nicole Nagel, best known for her roles in ER and Suddenly Susan has just listed her Brentwood home for $11.995 million. And it’s far from your ordinary celebrity home.
Dubbed Constellation 167, the house is an architectural marvel that features a stellar design, standing out like a huge piece of artwork compared to the traditional homes that line the family-friendly neighborhood.
The dome-shaped structure marks the first residence designed by famed architect Eric Owen Moss, who is known for daring and unconventional works.
Its striking design has attracted several big names in both screen and publication. The house has appeared in TV shows like Curb Your Enthusiasm and Star Trek. It has also been featured in The New York Times and included in the book 100 of the World’s Best Houses.
Nagel won a precedent-setting case against the original homeowners
In 2013, the house garnered attention when Nagel successfully won a legal dispute against its initial owners, who had concealed well-known structural flaws during the property’s sale.
According to reports, the original owners knew that the house was suffering from mold and structural damage caused by water but still sold the property without informing Nagel.
In the arbitration, Nagel was granted $4.5 million in compensation, along with attorney’s fees. Nagel’s case became a precedent and led to additional protections for home buyers and creditors in the state.
Following this, Nagel restored the property thoughtfully, making sure to preserve the home’s unique qualities. The reconstruction took four long years to finish but paid off big time, as it increased the house’s value by millions more.
Why Constellation 167 is a “love letter to geometry”
The first-ever residential project by world-renowned and widely published architect Eric Owen Moss, known for his experimental and daring commercial architectural endeavors, the futuristic-looking abode is said to be a “5,476-square-foot love letter to geometry.”
From the outside, the house looks more like a contemporary art sculpture than a family home.
Its exteriors showcase edgy details, a stucco finish, tilted windows, and a curved, asymmetrical roofline.
But looks can be deceiving and while its exteriors are avant-garde, the inside offers a lot of coziness.
The interiors boast vast living spaces, with expansive white walls and lots of natural light coming in from its large windows and many skylights. The inside also showcases unique details, with unconventional staircase layouts spread over its levels, uneven pathways, and a jagged steel fireplace.
Throughout the generous 5,476 square feet of living space, we find four bedrooms, five bathrooms, a large dining room, a well-equipped kitchen, and a dramatic 2.5-storey living room.
One of its most notable upgrades is the backyard, which has been improved with a lagoon-like swimming pool and a lush forest garden featuring lime, lemon, peach, plum, nectarine, orange, fig, avocado, mango, and pomegranate trees that fill the side yard.
Nagel commissioned Moss to design this special area and the whole thing cost over half a million dollars. The lagoon-style pool also has a jacuzzi and is finished with underwater speakers and drought-tolerant greenery.
Nagel has described the home as a “meeting of geometrics, many shapes, forms and materials that come together in an extraordinary way. It is truly one of a kind, like a painting. I’ve seen people walking or driving by pause for a few minutes to take in the architecture and design and try to understand the geometry.”
The unique property is listed with Sally Forster Jones and Tamara Bakir with Sally Forster Jones Group at Compass; and Marc de Longeville with Vista Sotheby’s.
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