Hoping to increase the housing supply and help families build wealth, the Federal Housing Administration on Thursday proposed several changes to its guidelines that could make it easier to buy a house with an accessory dwelling unit or to build an ADU.
The agency’s proposal would allow lenders to offer renovation loans to build ADUs and consider future rent from the unit when calculating how much a customer can afford to borrow. Under current rules for FHA-backed loans, lenders can consider rental income from duplexes but not ADUs.
The proposal would address one of the main barriers that people with little home equity and low to moderate incomes encounter when they try to get a loan for an ADU. “This is a huge step in helping us actually build ADUs,” said Meredith Stowers, a loan officer at CrossCountry Mortgage in San Diego.
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Other parts of the proposal would allow FHA-backed construction loans to be used to build a house and an ADU.
FHA Commissioner Julia R. Gordon said the agency is trying to advance two important goals with the proposal: enabling more people to own homes that include income-generating property, as the FHA does for duplexes, and increasing the housing supply.
The proposal is just a draft at this point, though, and it could change in response to public input.
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The FHA doesn’t lend money directly; instead, it provides guarantees for loans issued by banks, which increase banks’ willingness to lend and reduces the interest rate charged. The guarantees are available only for loans that stay within the size limits set by the FHA. In Los Angeles County, the maximum for a one-unit property is just under $1.1 million. (The proposal would classify a single-family home with an ADU as a one-unit property.)
Under an FHA-backed renovation loan, homeowners can borrow more than the current value of their homes if the improvements they’re planning would justify it. But the FHA will back loans only if the monthly payments are deemed affordable, which means that they can’t push the borrower’s recurring obligations over a set percentage of the borrower’s income.
That’s why including future rents could make a big difference — increasing borrowers’ income makes it more likely that they’ll be able to borrow enough money to build an ADU, which can easily cost $150,000 to $200,000.
In contrast to the FHA’s proposal, Fannie Mae and Freddie Mac — two giant, federally chartered purchasers of home mortgages — do not support loans that factor in theoretical rental income from a yet-to-be-built ADU. The inability to consider potential rental income “is a massive obstacle in helping my clients obtain loans to build their ADUs,” Stowers said. Most of her clients are using home equity lines of credit to build ADUs, but the FHA’s proposal “would allow us to offer much lower-interest first mortgages” to finance the purchase of a home and the construction of an ADU.
“This is what the vast majority of Californians want,” she said. Many of her clients are families that combine the resources of multiple generations to build compounds consisting of two houses and two ADUs, she said. “Why wouldn’t you support that? These families are building a strong financial foundation, but also social ties that are invaluable.”
Gordon said the lack of historical data about ADUs and the value they add to a property has made them a challenge for the FHA, Fannie and Freddie. “It’s a little bit of a chicken-and-egg problem,” she said — there’s not enough data for lenders to figure out how to underwrite the projects, but without the loans, there’s no way to generate more data.
“To be honest, the easiest thing to do in that situation is always to do nothing.”
The FHA’s proposal seeks to support ADUs the way the agency has supported the construction and purchase of duplexes, but with some extra safeguards. For its rapid online loan evaluations, it would allow lenders to consider only 50% of the fair market rents a new ADU could generate — with duplexes, the limit is 75% — and those rents could constitute no more than 30% of the borrower’s total income when determining how large a loan to issue.
“This is new territory, and that’s why we’re putting this policy on the drafting table to receive public input,” Gordon said.
ADU construction has taken off in California, accounting for 15% of the housing units approved in the state in 2021. But this type of project is starting to be a national phenomenon, Gordon said, as more communities grapple with shortages of affordable housing and the need to increase density.
“It’s my sense that many jurisdictions find that permitting ADUs to be a more palatable political first step in making adjustments to zoning,” she said. “That’s why I do think we will start to see more interest.”
An ADU that can be rented out and appreciate in value over the years also creates a chance to build wealth from generation to generation.
“In a more modest neighborhood, the ability of a household to get into first-time homeownership of both the unit that they’ll be occupying and the unit that has a rental opportunity can be an excellent wealth-building opportunity,” Gordon said. “Many families over the years have successfully increased their own prosperity and really the stability and prosperity of the neighborhood in this way.”
Stowers praised the FHA for moving forward and recognized the agency’s concern about going too far too fast. But she added, “All the agencies have been tiptoeing toward this moment. But my hope is they will tiptoe a lot faster.”
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Where will you work out when you move to Tampa? How about in your own apartment community!
Having a fitness center in your apartment community can lead to all sorts of lifestyle perks. You won’t have to sacrifice your workout and you’ll have access to one of the best gyms in Tampa.
Here are some of the best apartment gyms in Tampa that will help you reach your fitness goals.
Source: Rent. / Olympus Harbour Island
Funky windows and colorful accents give the sleek workout space at Olympus Harbour Island a fresh look. Open 24 hours, you’ll find both cardio and strength machines in the main area, with a separate spin studio that offers fitness classes on demand. The gym also contains a CrossFit box and punching bags.
Located on an island in Southeast Tampa, there are plenty of taverns and restaurants in this quiet and walkable area. A trolley connects the island to the mainland. Olympus Harbour Island also provides its own recreation with an impressive pool area with a lot of lounge chairs, a giant chess set and cabanas.
Source: Rent. / Azula North
In Temple Crest, a more established community on the northeast side of Tampa, you’ll find the bright green-and-turquoise-accented gym at Azula North. This multi-sectioned fitness center has a row of cardio machines that wrap around the entire space. A CrossFit box and strength training equipment are toward the back. A separate yoga studio space has a massive mirror and soothing art.
Azula North also provides residents with a resort-style pool, planned social events, lake views and more.
Source: Rent. / AVE Tampa Riverwalk
The two-story gym at AVE Tampa Riverwalk has plenty of windows that extend all the way up. A smoke-free community in Northeast Tampa, the fitness center also has a Zen Yoga Room. Within the main section, a row of cardio machines face out, and an astroturf section with CrossFit boxes sits beside all the strength training equipment.
When it’s time to relax, the pool at AVE Tampa Riverwalk sits on a palm-tree-lined courtyard with a nice lounge area. There’s even a pet spa to pamper your furry friend.
Source: Rent. / Bell Channelside
Within the very urban and walkable neighborhood of the Channel District, you’ll find the amenity-laden community of Bell Channelside. There’s a pet spa and bark park, furnished guest suits, a 24-hour java bar and lounge and tranquil courtyards, just to name a few special features.
The fitness center at Bell Channelside consists of two rooms. The first contains all the strength training machines and equipment, while the second is full of cardio machines, a small kitchenette and a spin studio. Bright and colorful, with pops of orange and red, the fitness area totals 2,700 square feet.
Source: Rent. / Cortland Bayport
With free group classes and lighted tennis courts, Cortland Bayport is so much more than a basic place to live. The fitness center itself is nice and bright with funky mirrors and hints of burnt orange on the equipment. The community also has an on-site resident market, resort-style pools, a waterfront boardwalk and a community dock with boat slips.
Located in Town N County Alliance, this area is right off Old Tampa Bay, slightly apart from the hustle and bustle of the city center.
Source: Rent. / The Pointe on Westshore
Fresh towels and funky, modernistic lighting greet you at the fitness center at The Pointe on Westshore. There are also two rows of cardio machines, free weights, a CrossFit box and more in this fitness-on-demand facility.
A Southwest Tampa gem, The Pointe on Westshore also features two heated pools, a car wash, a pet spa and lounges. Sandwiched between Old Tampa Bay and Hillsborough Bay, the surrounding area provides a ton of water views and beachfront access.
Source: Rent. / The Oasis at Highwoods Preserve
A little ways from the city center, the quiet and suburban neighborhood of West Meadows sits to the northeast. Here, you’ll find The Oasis at Highwoods Preserve with a theater room, two dog parks, a saltwater pool and a game room with arcade games and billiards.
The gym doesn’t disappoint either. It’s open 24 hours and is a large, bright space with great lighting and nice windows. Equipment-wise, the gym provides a colorful and extensive assortment of all kinds of workout machinery.
Source: Rent. / Mezzo of Tampa Palms
An impressive space, with a nice assortment of equipment of all kinds, the fitness center at Mezzo of Tampa Palms is nicely stocked. Accented by wood panels, the main area contains cardio and strength machines. A glass entryway leads into the fitness studio with spin bikes and CrossFit boxes. Fitness-on-demand classes are available here too. There are also tennis and racquetball courts on the property.
Known for its golf courses and green spaces, you’ll find Mezzo of Tampa Palms in New Tampa. Specifically, this area is home to the Lower Hillsborough Wilderness Reserve with hiking trails and picnic spots, and the New Tampa Nature Park with a zip line and climbing wall.
Source: Rent. / Arbor Walk
Also in the neighborhood of Temple Crest, Arbor Walk is a green community with a resort-style pool, sundeck, bark park and cyber cafe with WiFi.
The gym is a bright and open space with a variety of machines wrapping around two walls of windows. Cardio and strength machines sit together, with a separate space for free weights and a CrossFit box.
Source: Rent. / Camden Bay
Surrounded by a 1,000-acre nature preserve, Camden Bay is an impressive place to live. Also in Town N County Alliance, the community provides private boat ramps with direct channel access to Tampa Bay. There’s also separate boat parking when you’re not going out on the water.
Camden Bay has lighted tennis courts and a fitness center that’s open 24 hours with neat rows of equipment. A cool space with wood paneling on the ceiling and faux greenery on the walls, the gym has a separate yoga studio complete with large mirrors.
Grab an apartment workout at one of the best gyms in Tampa
There are certain things Tampa locals all know to be true, one of which is that where you live matters. You want your home to be located near a beach and have fun places to go. You also want your home to offer you conveniences, like access to a gym.
There are plenty of Tampa apartments that can fulfill all your needs, and all you’ve got to do is start looking. Good luck!
Featured image source: Rent. / AVE Tampa Riverwalk
One of the things we can remember about the show is its ending—is it beautiful or tragic, maybe boring, or doesn’t make sense, or a cliff-hanger Today, we’re discussing 17 TV shows with some of the worst endings ever!
1. ALF
One person said, “Nobody will remember this, but the correct answer is ALF. It was supposed to be a cliffhanger, but the show got canceled, and they ended the series with ALF being captured and taken away to be dissected. GOOD NIGHT KIDS!”
Another person replied, “Eventually, they made a made-for-TV-movie about five years later to attempt a wrap-up called Project: Alf. It had virtually no one from the original series besides Alf’s voice, and as I remember it, was almost universally panned.”
One Redditor added, “I remember seeing the movie. It was horrible. I loved the series as a kid. Nothing beats Alf singing Old time rock ‘n’ roll with a cucumber.”
2. The X-Files
“Glad I searched for X-Files because this was going to be my comment. Honestly the last 3 seasons were… not great (outside of a single episode here and there, usually written by Vince Gilligan, of course). Talk about a show with highs and lows. It could be the best show on television, and the next week it could be the most senseless garbage you’ve ever seen,” one user commented.
“The point for me where I felt the most disappointed was the episode that ‘resolved’ the disappearance of Samantha. Not only was it a confusing mess but it opened up some pretty aggravating plot holes retroactively. HATED it,” another commenter added.
Another user said, “I remember someone suggesting the final episode should have been Chris Carter and a flipchart explaining how everything fits together.”
3. My Name Is Earl
One user commented, “My Name Is Earl ended on a cliffhanger which was canceled soon after S4. The only resolution given was on the first episode of Greg Garcia’s next project Raising Hope where a TV news broadcast in the background said a man in Camden County completed his list. NBC had a knack for making bonehead decisions.”
The second person replied, “Yup. They didn’t plan on it being the series finale, and their surprise cancellation lead to them scrabbling last minute to come up with an ending. That’s what they settled on.”
4. Heroes
One person stated, “Heroes. God the writer’s strike really had that show go wildly off the rails.”
Another commenter said, “Hiro constantly losing his powers every season because of lazy writing and he is too strong… I gave it another try last year couldn’t finish watching the last season again. Still no idea how it ended.”
One Redditor replied, “I still don’t understand how Heroes went from being so good to such utter trash… like how did it happen? They fumbled way before the writers strike. I’m still upset.”
5. Pretty Little Liars
“Pretty little liars, the creator never even knew how it would end. I hate that show because it was great for the first maybe 2 seasons then just terrible from then on,” one user shared.
“It was a bunch of mystery building and no resolution for any of those mysteries. It should just be referred to as blue balls the show,” another added.
“I couldn’t believe what I was watching. I thought it was leading up to some [crazy] masterpiece and instead we got a long-lost evil British twin and Mona’s dollhouse. I was pissed I’d invested all that time into the series and got that [disappointing] of an ending,” another Redditor said.
6. House of Cards
“Should have ended when he got the presidency. It was all weak after that—Frank had a goal in the first few seasons; it’s what drove him. Then he gets it, and his motivation is just…keeping what he has. Perfect end scene was when he did his signature knock on the president’s desk. Cut to black. End show,” one person stated.
“I don’t understand how this didn’t end with Season 4 and having Frank ultimately impeached and arrested after gaining the presidency. That would both complete his arc and fit the theme of house of cards with 4 seasons of 13 episodes each,” the second person replied.
7. Merlin
One person shared, “Merlin. What the hell was it all for!?!?! Arthur rejects magic and they’re back to square one.”
Another person replied, “Not to mention that suddenly it becomes modern day, and poor Merlin is still alive, just waiting around in the hopes that Arthur will come back. He’s had to slowly watch everyone and everything he loves slowly die over the decades centuries. It’s just completely miserable and pointless, Merlin doesn’t deserve that.”
Finally, the third added, “God it’s been over a decade and I’m still mad I’m so glad I’m not the only one. Like why did they even make season 5? They should have ended after four and let fanfic do the rest.”
8. Sherlock
“The whole reason I loved that show was the mystery being explained by cold hard logic and the powers of observation. The entire last season was basically Sherlock sister has mind control which takes effect within seconds. Total BS and I hate it. That was my favourite tv series of all time and I felt physically ill when they just murdered the whole season like that,” one person stated.
Another user replied, “I wanted to mention this too. I loved Sherlock at first but there’s so much wrong with it that, and the 4th season really made me look at it differently. It was already going downhill, but then it really took a nosedive. My mother was a fan as well and I just told her not to watch the last season by explaining it was so bad. Fans were sure there was a secret 4th episode that was going to make everything okay again. She got the message.”
“Same. I binged Sherlock hard. Got to his sister and I totally stopped watching it,” a third commenter added.
8. Jericho
One person stated, “Jericho. That show had so much potential and they just loosely wrapped it up leaving me very unfulfilled with no conclusion or closure.”
Another added, “Jericho really did have a lot of potential. The comic books wrapped it up but I still wish they had made more of the TV show.”
One Redditor replied, “It wasn’t the writers it was the network. They were given three more seasons to finish but then when more than half the season was done they pulled the rug and the writers had to write a conclusion. It wasn’t great but acceptable under circumstances. The writers wrote comic books after the show which further went through the story and it was actually a nice conclusion to the storyline.”
9. Xena: Warrior Princess
“Xena: Warrior Princess… 20 years later and I am still [angry],” one person shared.
“Ah, I had to scroll way too far for this, I was starting to think I was the only one who remembered it! I was a Xena fanatic when it was airing, and the ending gutted me. Deciding to introduce yet another character that was important to Xena in the past, in the finale? A whole village of innocent people dying, but it was blamed on her despite it being an accident, if I recall correctly? The sheer unnecessary amount of brutality, and leaving Gabs alone in the end? So cruel. When I rewatch the series, I skip the finale and pretend the show ends on Many Happy Returns or When Fates Collide,” one Redditor replied.
Another added, “I found my emotional support thread! They did us dirty in the 90’s with that ending. The reveal of Xena’s body and Gabrielle’s reaction full on TRAUMATIZED me.”
10. Star Trek Enterprise
One user shared, “Star Trek Enterprise. It was a fun prequel that looked at the start of the United federation of planets. The last episode was an insult. A main character was killed off and it was in a TNG holodeck! Bloody rubbish, I’m stil livid.”
The second person replied, “That’s what I came here to say. Absolutely terrible ending to a series that otherwise had a great last season. I’m almost convinced that they tried to create a bad last episode because how did anyone think that was a good idea?”
The third added, “Yeah ST Enterprise is criminally underrated, especially toward the end…except for that awful finale.”
11. The Last Man on Earth
“Last Man on Earth, the show got cancelled on a cliffhanger and we never saw an end to it,” one person shared.
“I needed some closure, closure, closure, closuuuuuuure,” replied another.
“They canceled it at the same time as Brooklyn 99. Everyone resurrected Brooklyn 99 and I was waiting for Last Man on Earth to get the same reaction but I felt like the only one who cared. I’ve never laughed at a show harder. Still sad,” one user shared.
12. Teen Titans
“The show ended on a gut punch episode that was far more mature than anything else on Cartoon Network before or since. Emotionally clever storytelling that let the audience down. It was heartbreaking that they chose to end that relationship that way. But they expected a 6th season. To tie off the ongoing rivalry with Slade/tie up every character’s arc. It was canceled on the penultimate season. It had set up all the pieces set up—had finally graduated to the next level of storytelling; ratings were high…..then bam. Canceled. Now we’re left with a downer ending of an episode. It’s fantastic—but clearly not designed to be the real end,” one person stated.
“No no, I agree. Sad ending that almost felt like a universe-death when beast boy went out the all white doors. Surreal, depressing, not the best way to end a serious but light-hearted show,” another added.
13. The 100
One person stated, “The 100. Stupidest ending ever.”
Another person replied, “I’m so glad other people have this opinion. I binged it a few months ago and genuinely enjoyed the series, but the last season made me wish I never started it and erase the series from my mind. They destroyed Bellamy’s character and then killed him off in the lamest way possible.”
One commenter added, “My gf started watching that show and I swear all I ever heard was ‘my people this’ and ‘my people that.’ If you had a drinking game every time they said ‘my people’ in that show you’d be dead before the first commercial break.”
14. The Man in the High Castle
One person stated, “I feel like that show lost a lot of its vision after Season 1. John Smith, Minister Tagomi, and Chief Inspector Kido basically just carried the show by sheer force of personality.”
Another user shared, “That ending [makes me angry] more than GoT, which Also [made me angry]!”
One Redditor commented, “I was too confused to even be mad about that ending. I feel like they were trying to be profound or something, but can’t figure out what the message was supposed to be. Everybody’s moving in now?”
15. Star vs the Forces of Evil
“The entire show was derailed to make the popular ship canon, and they didn’t even do it well. And let’s not get into how the characters decided the best way to stop a genocide in their kingdom was to create a far bigger genocide on a multiversal scale, stranding countless innocent people away from their homes and families, but that’s okay because Star gets to be with her new boyfriend. There’s so much more I can get at, but this is GOT level bad. This show could’ve gone down with the likes of Gravity Falls but they massively dropped the ball in the last season,” one person stated.
“Once they woke up Eclipsa’s husband and he was completely harmless I finally admitted to myself they had abandoned whatever plan was originally in place,” another added.
“Man, the first 2 seasons were a lot of fun. But then shipping took over and it all went downhill,” another commenter shared.
16. Game of Thrones
One person shared, “I didn’t mind Bran as a character until that moment. Then I wanted him to get crippled all over again.”
Another replied, “Dude came with his own throne.”
Then the third added, “‘Why do you think I came all this way.’ Basically implies that he orchestrated literally everything in the show to make himself king. Bran is one of the greatest villains in TV history.”
View the original Reddit thread here.
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When you’re young and adventurous, international travel is the dream. You jump at any opportunity to go abroad without a second thought, start packing your suitcase, and promise yourself you’ll work out the details later.
But traveling — especially post-pandemic traveling — requires a bit of planning if you want a safe, inexpensive, and (relatively) stress-free trip. ️
Whether you’re traveling with friends or going solo, staying for one week or six months, traveling is much easier when you plan ahead with money-saving tips. Here are our best ideas to make your next international trip easy on your mind and your wallet.
What’s Ahead:
1. Be flexible with your dates and destinations
If you have flexibility in terms of where and when you travel, you have a major advantage: the ability to plan your trip around whatever amazing deal you can find. Without limitations on where and when you can travel, you can search within a specific timeframe or geographical area and shop around for low airfare and accommodations.
If you’re totally set on a particularly expensive destination, try to plan your trip for the off-season. You can often save big by traveling during less popular times, even in expensive areas. Conversely, if you have a specific window of time for travel, shop around for a destination that offers a good bang for your buck for that time of year.
A little flexibility goes a long way when you want to save on international travel.
Read more: Affordable international travel destinations that won’t empty your wallet
2. Decide what’s important to you and prioritize your spending
Before you hop on a plane with cash burning a hole in your pocket, take some time to think about your spending plan while you’re away.
I don’t necessarily mean you have to budget — although if that’s your style, stick with it. What I do suggest is you think about how you want to spend your money while traveling — starting with what’s most important to you.
Do you want a direct flight, or is a layover okay?
Do you love museums, or is seeing one enough?
Do you want to stay in a specific neighborhood, or wherever’s affordable?
Are you a big foodie, or is your dining experience an afterthought?
For example, if food is your thing, plan to spend big at restaurants. You’ll probably have to cut back in other categories — like lodging, cultural attractions, or transportation — but that’s okay. Giving this some thought before your trip will help you prioritize your favorite things.
Read more: How to travel for cheap: 7 ways to see the world for less
3. Get travel insurance
If you’ve traveled at all since COVID-19 upended the world, you know how different it is. After months — even years — of lockdown, many of us are jumping at the chance to travel abroad again. But after enduring such a lull in travel, it’s even more disappointing when things don’t work out.
That’s why travel insurance is a lifesaver.
The last thing you want is to plan an epic trip and miss half of it due to a flight cancellation. So even though you might bristle at the added expense of travel insurance, work it into your budget and enjoy the priceless feeling of security should something go wrong.
Like credit cards and bank accounts, there are lots of options when it comes to travel insurance. Several popular credit cards provide travel insurance, so you might already be covered. If not, shop around for a policy that fits your needs and budget. Sites like SquareMouth.com, TravelInsurance.com, and InsureMyTrip.com can help.
Read more: Best credit cards for travel insurance
4. Save digital copies of important documents
You know that feeling when you misplace your phone? Your stomach kind of drops, and panic sets in. (And approximately 12 seconds later you find it on the kitchen table.)
Imagine that feeling — x100 — when you misplace your passport while traveling internationally.
I know — you’ll do your best to keep all your stuff secure and organized. But things happen, you misplace this, you forget that. You’re human, and you should have a backup plan.
Make digital copies of all your important documents before you leave. Store them in multiple places, and make sure they’re accessible to you while abroad. I suggest making copies of the following documents:
Passport
Travel insurance paperwork
Vaccination information
Visa
Driver’s license
Travel itinerary
Store photos on your phone, in your email, in the cloud, and give copies to a trustworthy person at home.
5. Learn language basics
If you’re traveling to a country that speaks another language, take some time to learn key phrases and words.
Learning a new language opens all kinds of doors when you travel. The better you can communicate with locals, the more you’ll get out of your trip. Plus, having some basic language skills means you can better navigate outside of the main touristy areas — potentially saving you money by staying, eating, and shopping in under-the-radar locales.
Learning language basics can also give you a better cultural understanding of wherever you’re traveling. Not to mention locals will appreciate your interest in their language and culture.
If you’re thinking there’s no way you’ll ever learn to speak another language, start small. You don’t have to be fluent to reap the rewards of language skills. Instead, think about some simple words and phrases you know you’ll need often.
There are tons of accessible, free ways to learn a new language these days. You can download an app like Duolingo or Memrise, join a language exchange, or even take a community college class.
6. Have some local cash before you land
There are a million and one things to plan when traveling abroad, and it’s easy to neglect to get local cash before departing. You might just plan to use your card and withdraw money when you get there — but you can’t always count on this strategy.
You never know when you’ll have trouble with a card, and you’ll definitely need money when you land — to feed yourself and get to your lodging, at a minimum. So take the extra step of getting some local currency before you even step foot on the plane. And be sure you have enough to get situated when you get there.
Oh, and don’t wait until you get to the airport to exchange your cash. If you go to your bank or credit union, you’ll pay a lot less in fees and pay lower exchange rates than you will at an airport kiosk.
7. Get a local SIM card for your phone
Roaming data and temporary data passes are expensive, and there are better — and cheaper — ways to use your phone abroad.
Of course, you can always connect to Wi-Fi. But if you want to be able to use your phone without a Wi-Fi connection — say, to find the nearest pub while walking the rural English countryside — you can avoid exorbitant roaming fees by buying a local SIM card instead.
After you land at your destination, go to a local telecom store and buy a SIM card. Look for a pay-as-you-go or temporary SIM, which you might see being marketed to travelers. Choose a popular telecom store with lots of locations — that way, if you have issues later on, it’s easier to find help.
All you have to do is replace your regular SIM card with the temporary one (unless your phone allows dual SIM cards — then you can have both in at once) and make sure your roaming data is turned off. Voila! You’ve got yourself a working phone.
8. Stay in a local neighborhood
Rather than paying an arm and a leg for a bland hotel in the main tourist zone, look for a rental in a local neighborhood when planning your accommodations abroad. Aside from getting a unique experience, there are lots of benefits to doing this:
You can often save money by staying even a short walk from the hot spots
You’ll experience more of the local culture and cuisine
You can meet the locals — whether it’s an Airbnb host, a barista down the block, or a neighbor
If you’re traveling somewhere for an extended period of time (and depending on your risk tolerance), you can wait to find your long-term accommodations until you get there. Find a place to stay for a week or two while you get a feel for the area and chat with the locals. You’ll have a much better idea of where you want to be — plus some insider tips — by getting situated first.
9. Book a walking tour
If you ask me, there’s no better way to explore a new city than on foot. You see more, you start to orient yourself, and you can stop in whatever shops, cafes, and museums you see along the way.
To start your trip off on the right foot (literally), book a walking tour as soon as you arrive. They’re a great way to immediately learn about the city and scope out the places you want to revisit. Plus, walking tours allow you to meet other travelers. If you’re traveling solo, you’ll likely meet other people interested in exploring with you.
They don’t cost much — in fact, a quick Google search usually turns up lots of free walking tours.
10. Use local currency when paying with a credit card
When you’re traveling abroad and paying with a credit card, you may be prompted to choose between local currency or U.S. dollars when checking out. You may not realize it, but you’ll likely pay more by selecting your home currency.
Even if your card doesn’t charge foreign transaction fees, there’s usually a fee associated with paying in your home currency. The only real benefit is seeing what you’re paying in terms of the currency you’re familiar with. But this convenience comes at a price — usually around 3% of the charge — which can really add up over time. If prompted, always choose the local currency when paying with a credit card.
11. Use public transit
One of the best ways to save money when traveling abroad is to use public transit. And I promise it’s not as scary as it seems!
The reality is, Ubers, Lyfts, and cabs will quickly eat away at your budget. While convenient, they’re not cheap. If you can, rely on public transit to get where you need to go.
Depending on where you’re traveling, public transit may include:
Trains
Buses
Subways
Trams
Ferries
The ins and outs of navigating public transit vary widely, but it’s not as intimidating as it looks. Taking public transit will give you a chance to practice a foreign language and give you more of a local’s perspective on the city.
Plus — and I can tell you from experience — you’ll feel a huge sense of accomplishment (and relief) after navigating a foreign city’s public transit system.
One more note: it’s not a bad idea to set aside an emergency stash of money for a cab. If you’re out late or, for whatever reason, don’t feel safe taking the bus or train home, a cab is always worth the peace of mind.
12. Make use of grocery stores
No, you don’t have to go full Julia Child while abroad, but grocery shopping and cooking in a new country is a worthwhile adventure in itself. Plus, shopping for snacks, groceries, and ingredients — and cooking meals yourself — can save you a fortune while traveling.
When I went to Iceland, my flights and rental car were relatively inexpensive. Meals out, however, were pricey. I ended up saving a lot of money by shopping for groceries and cooking at home. There were some… interesting meals, but I saved money I wanted to spend on other things — like museums and awesome lodging.
If your hotel room, rental, or hostel has a kitchen, you can cook simple meals at home. Have fun browsing the shelves at grocery stores, specialty shops, and farmer’s markets for fresh and exotic ingredients, and see what culinary masterpiece you can cook up.
If your lodging doesn’t include a kitchen, you can still stock up on snacks. You can easily piece together a cheap and delicious picnic with grab-and-go-items.
Read more: 9 ways to save money on food and drinks while traveling
13. Check out local meet-ups
No matter how far from home you are, you can find community at a variety of local meet-ups. A quick online search can help you find free local meet-ups in whatever city you’re in — no need to spend on every experience while traveling. Plus, if you’re traveling solo, you’re almost guaranteed to meet other solo people with similar interests as you.
Not sure where to start? Check out these ideas for inspiration:
Creative Mornings — a live gathering of creatives who want to inspire, connect with, and learn from one another.
FuckUp Nights — a series of events showcasing stories of professional failure, vulnerability, and empathy.
MeetUp.com — a platform to help you find groups, events, and activities wherever you are.
If you meet locals during your stay, ask them about local events and meetups. It goes without saying, but stick to gatherings that feel safe.
Summary
International travel isn’t out of reach — especially if you take the time to plan wisely. There are lots of great ways to save on flights, food, transportation, and accommodations, as long as you’re willing to do your research.
Remember to take care of yourself and be a responsible traveler, too. The more effort you put into planning a safe, responsible, and wallet-friendly trip, the more enjoyable it will be.
Last Updated: May 27, 2023 BY Michelle Schroeder-Gardner – 38 Comments
Disclosure: This post may contain affiliate links, meaning I get a commission if you decide to make a purchase through my links, at no cost to you. Please read my disclosure for more info.
We’ve all seen them – 0% financing on certain items such as cars, electronics, appliances, jewelry, and more. The offers seem great and you may even be wondering what the catch is.
Well, I know what the catch is. Actually, there are many catches.
If you’re careful, a 0% financing offer can be a good deal. I’m not going to say that they are always bad because I know they aren’t.
I have taken part in several 0% financing offers. Some took place before I realized what the catches were (yes, I will admit that one time when I was younger I didn’t read the fine print, but thankfully I never had to experience any of the negatives), but now I’m much more careful about them due to the fact that I know there may be consequences.
Yes, some companies are great at sharing what the consequences may be, but I know that there are some companies that don’t make everything so obvious.
Below are some of the many things you should think about when it comes to 0% financing offers.
You may still have to pay interest.
The biggest catch of a 0% financing offer is that you may end up having to pay interest still. And, if you do, the amount may be significant.
If you don’t pay your monthly bill on time, you may have to start paying interest immediately, plus pay interest for all of the previous months or years as well. This is because you have basically voided the 0% financing contract and you will revert to their normal terms, which may be an interest rate of 25% or more.
This applies even if you are on your very last payment for the financing offer!
You may accidentally miss a payment.
Even if you just accidentally miss a payment (such as if you had a crazy month and forgot about a bill), then you may still have a problem. You may have great credit, a great savings rate, and more.
However, mistakes happen.
This mistake could cost you a great deal of money if you forget to make a payment on a loan that you are receiving a 0% interest rate on. So, even if you make all of the payments except for the very last one, you will be charged interest for the life of the loan, which may be thousands of dollars.
Related: How I Manage My Finances So I Can Save Time and Worry Less
You may spend more because you aren’t paying for the item upfront.
There’s a reason why retailers and companies often provide these great offers.
One of the main reasons is that by offering a monthly payment option, the average person is likely to spend more money at a company. Things can seem more affordable and attainable to the human mind when it’s broken up into a much smaller monthly payment.
Before you decide to sign up for a 0% financing offer, you should make sure that you can actually afford the payment and the whole cost. Remember, just because you think you can afford the monthly payment now, things may change in the future and you may be stuck paying for all of the interest charges as well.
Your credit may be damaged.
The last negative for 0% financing offers is that you may harm your credit. Your credit score may be damaged and you will be increasing your credit utilization rate.
If you plan on using your credit in the future for something big such as a new home, you may want to turn down the 0% financing offer because you may actually hurt your chance at a good interest rate on a mortgage.
Related: These 4 Mistakes May Be Holding You Back From A Good Credit Score
There are ways to take advantage of these offers.
Like I said above, I have taken advantage of several 0% financing offers. There are ways to be smart and make the purchase you are about to make worth it.
Here are my tips:
Mark the monthly payment date on your calendar. Whether you put it in your phone as a reminder or if you mark your kitchen calendar each month, this is a great idea so that you do not accidentally forget to make a payment.
Be careful about what you can actually afford. Just because whatever you are buying is on a monthly payment plan, it doesn’t mean that you should rack up tons of debt. Still be realistic about what you can afford.
Have you ever taken advantage of a 0% financing offer? Why or why not?
That’s how New York University professor Sewin Chan described the traditional retirement path at a symposium several years ago. However, that path may be changing. Her research indicates that approximately one-third of retirees from 1992 to 2004 reversed their retirement. Today, the path might look more like this (as Chan illustrated in her PowerPoint presentation): “Work, work, work. Retire (for a bit). Work. Retire?”
I re-discovered these little quotes by reading through past issues of my newsletter, which is about planning for — and living in — retirement. However, as I’ve written before, I’m a retirement expert who doesn’t plan on retiring. I’m not sure it’s best for most people’s health or wealth. And it might be just too dang risky. Plus, I like what I do, where I do it, and the people I do it with. Of course, I still save for retirement because who knows if I’ll feel the same way 30 years from now.
On the other hand, “work, work, work, work, work, work” doesn’t sound like much fun, either. But as Chan’s presentation suggested, the traditional work/retire chronology may not be the best model. Rather than saving all the retirement for the end of your life, perhaps it’s possible to rearrange the order by taking a break mid-career, gradually ratcheting down the work week, or working fewer weeks out of the year.
With this in mind, I flipped through the pages of my newsletter (eight years’ worth), looking for examples of people who have taken the retirement road less travelled. Here are a few tales I uncovered.
That “Work Just 48 Minutes Each Weekday” Guy The first example came from an article I wrote in 2008, about a book you’ve likely heard of: The Four-Hour Workweek by Timothy Ferriss. How was then-30-year-old Ferriss able to support himself on less than a day’s worth of work per week? He created his own business and then outsourced everything else. Ferriss checks email just once a week. Another option he suggested: Become a key employee, and convince your boss to let you work from home. But instead of being at home, you’re in Berlin, Beijing, or Buenos Aires. Again, outsource as much as you can by engaging the services of companies such as Your Man in India, and email your work to the office.
While not a realistic plan for most people, Ferriss makes some worthwhile points for those looking for an alternative to “9-to-5 till you’re barely alive.” He distinguishes people who are “deferrers” — those who lead hard-charging careers in pursuit of the Holy Grail of retirement that is decades away — from the “New Rich,” who have loads of time and flexibility, and “distribute recovery periods and adventures (mini-retirements) throughout life on a regular basis and recognize that inactivity is not the goal. Doing that which excites is.”
“Personally,” he writes, “I now aim for one month of overseas relocation or high-intensity learning (tango, fighting, whatever) for every two months of work.”
My first reaction to reading his book was: Clearly, this person doesn’t have children. (I have four — that I know of.) But beyond that, Ferriss makes some provocative arguments with some catchy phrases. There’s much more to his philosophy, tips, and tricks. You can read more of what Ferriss thinks of retirement from this this interview J.D. did with him in 2008.
Supersave Your Way to Early Retirement I’ve spilt a good deal of cyber-ink writing about safe withdrawal rates in retirement — the amount retirees can spend each year and be reasonably sure their portfolios will last as long as they do. For many years, I cited the work (and the actual words) of John Greaney, who retired from his engineering career in 1994 at age 38 and founded RetireEarlyHomePage.com. How did he do it? Once his school loans were paid off by age 25, he began saving 25% of his salary. As his income increased over the years, his savings rate reached 40% to 50%.
Reduce Living Expenses, Retire Sooner Fred Brock, author of Retire On Less Than You Think, moved to Kansas after retiring from The New York Times. He sold his house in New Jersey and bought a newer house in Kansas with cash. “The absence of a mortgage payment was effectively an increase in salary,” he wrote. “In addition, our property taxes dropped from $9,000 a year to about $2,700.”
Live All Around the World Keeping housing costs down is also how Ferriss is able to work so little, but he does it on a global scale. He calls it geoarbitrage — “to exploit global pricing and currency differences for profit or lifestyle purposes.” This strategy is also used by Motley Fool contributors Akaisha and Billy Kaderli, who retired at age 38 and live on less than $30,000 a year by staying in low-cost but exotic countries, such as Thailand, China, and Ecuador. You can read more about how they do it in this GRS interview from last summer.
Reduce Living Expenses by Living on Wheels You know the cliché about people retiring to an RV? People really do it — and it’s inexpensive. Ron and Barb Hofmeister did it for 14 years after retiring in their 50s. They explain in their book, Movin’ On: Living and Traveling Full-Time in a Recreational Vehicle, that their living expenses ranged from $1,500 to $3,000 a month, but it can be done for much less. “The lifestyle can be adjusted to almost any income,” Barb told me in 2005. Those numbers have likely risen bit over the past seven years, but not drastically. One strategy they used: When gas prices were high, they stayed in one place longer.
Change Careers Instead of Retiring A few years ago, Sheryl Garrett, founder of the fee-only Garrett Planning Network, told me the story of a 52-year-old woman who made just $13,000 a year. She had saved $55,000, and asked Sheryl what to do with it. Sheryl asked her, “What would you really like to do in life?” She responded, “I have always wanted to be a nurse.” After running the numbers, they decided that spending that money on a nursing degree was the best investment. Now the woman has a higher income and a new career, one she says she could enjoy well into traditional retirement age. As even Ferriss conceded in The Four-Hour Workweek, “Full-time work isn’t bad if it’s what you’d rather be doing. This is where we distinguish ‘work’ from a ‘vocation.’”
Turn Your Hobby Into Your Income Back in the early days of my newsletter, a subscriber named Doug Short became very active on our discussion boards, providing excellent answers to a whole range of financial questions posted by other subscribers. Doug started out as an English professor, and then became a consultant for IBM, mixed in some work at GlaxoSmithKline, and eventually retired. Along the way, he built up his website construction skills and financial know-how, eventually combining the two to create a little site that conveyed economic data and history visually. It eventually showed up in places like CNN and Barron’s, and the site was bought by Advisor Perspectives (which now pays Doug to actively maintain the site in his “retirement”).
Closer to home, the founder of the very site your eyes now gaze upon might have a thing to say about turning a sideshow into the main event.
It may take years, and may never completely replace a full-time salary, but having a source of income from doing something you enjoy can add a very interesting variable to your retirement calculus.
The Retirees, They Are A’Changin’ We will see a continued variance in what “retirement” looks like over the next couple of decades. Some of that, frankly, will be due to millions of people not having enough to retire, and fewer traditional defined-benefit pensions to save them. But it will also be due to people re-thinking the whole idea of retirement. According to the Kaufmann Institute, the 55-64 age group accounted for 20.9% of new entrepreneurs in 2011, compared to 14.3% in 1996. Starting businesses isn’t just for young folks.
And you? What kind of retirement do you have planned? Know of any other examples of folks who worked a different path? Perhaps we’ll start a retirement revolution!
Of all the housing market bugaboos that haunt and frustrate wannabe buyers in this stressed, prime-time selling season of 2023 (Sky-high prices! Rising mortgage rates! Inflation and economic uncertainty!), one challenge still sits at the center of everything: finding a good home to purchase.
America’s been in a severe housing shortage since at least the earliest days of the COVID-19 pandemic, and it affects just about all else. A shortage of inventory leads to frenzied bidding wars, out-of-reach price tags, and market paralysis.
But the situation is changing, at least in some markets. And Realtor.com® decided to find out where. When it comes to home inventory levels in America, it’s both the best of times and the worst of times—it all depends on where you live.
To gain some insight into where things stand going into the crucial summer season, the data team at Realtor.com crunched the numbers to determine the metropolitan areas with the largest increases—and most substantial decreases—in available home inventory.
You can see for yourself in the table below the change in housing inventory in the 100 largest metros.
So what did we find? Well, across the country, inventory is up year over year, by a little more than 20%. But this is largely a function of the incredibly low inventory levels of the past couple of years. There aren’t more sellers coming onto the market. Instead, homes are sitting longer. And even the current bump in year-over-year inventory still puts this year below pre-pandemic levels. Nationally, the number of new listings was down 22.7% in May compared with the previous year
And the data underscores a truth that has become increasingly evident: There’s no single, monolithic housing market. Instead, real estate has become a tapestry of regional markets, each with unique patterns.
In certain regions, particularly in the more affordable pockets of the Midwest and Northeast, inventory remains tight. Despite higher mortgage rates casting a shadow over buyers and sellers alike, homes are selling at a brisk pace, prices continue to rise, and inventory remains relatively low compared with previous years.
Compare that to the West and South, where hot markets like Austin, TX, Nashville, TN, and Sarasota, FL, have seen inventory more than double compared with this time last year. These pandemic-era boomtowns have been on a roller coaster when it comes to pricing, inventory, and demand.
Nick Libert, a real estate agent with EXIT Strategy Realty in Chicago, calls this a “balanced-stagnant market.”
Elevated rates have put the brakes on the overall housing market activity, from the perspective of buyers and sellers, but a bridled demand is still very much present.
“Not a lot of people are moving,” Libert says. “Part of the reason is there’s very little to look at.”
So let’s take a look at the biggest markets to see what’s what in different parts of the country.
We found where inventory is up and down the most in the 100 largest U.S. metros by going through the Realtor.com monthly housing market data to compare inventory in May 2023 with May 2022. We selected just one per state to ensure geographic diversity. (Metros include the main city and surrounding towns, suburbs, and smaller urban areas.)
Where inventory has risen the most
1. Sarasota, FL
May 2023 year-over-year active listings change: +128.1% May 2023 median list price: $549,900
What a difference a year makes.
Located on the southwestern coast of Florida, known for picturesque white-sand beaches and barrier islands along its Gulf of Mexico shoreline, the Sarasota metro experienced the biggest year-over-year jump in inventory. There were nearly 2.3 times the number of active listings, at just shy of 4,600, this May compared with last.
Unsurprisingly, homes are sitting on the market almost twice as long, now taking about 7.5 weeks to sell.
This midsized metro, which serves as the spring training destination for the Baltimore Orioles, is relatively expensive compared with much of Florida. Median list prices are about 9% above the median state price—only Miami is priced higher.
Carissa Pelczynski, a real estate agent at Preferred Shore in Sarasota, says the attitude of many of the out-of-town buyers who were driving prices up during the pandemic has shifted in the past several months.
“People are just more hesitant now,” Pelczynski says.
Also adding to the inventory glut, according to Pelcynski: Too many sellers are pricing their homes as if the market were still as hot as it was a year or two ago. (It’s not.)
2. Nashville, TN
May 2023 year-over-year active listings change: +124.7% May 2023 median list price: $580,000
Music City is the next stop on our list, with a jump in inventory almost as large as Sarasota’s. This icon of the South is home to the Grand Ole Opry and the Country Music Hall of Fame, and it’s an increasingly popular destination for buyers.
What’s especially notable about Nashville right now is that even as inventory is more than double what it was this time last year, in May the price per square foot hit an all-time high. It surpassed the previous high mark in June 2022.
Homes in Nashville are generally larger than average, with a median size of almost 2,200 square feet. It’s also about 15% more expensive than the national median price per square foot.
A recently listed, 500-square-foot condo just southeast of downtown Nashville and within walking distance of the Cumberland River is around $515,000.This newly constructed, four-bedroom townhome is on the market for about $600,000.
Watch: The Best Cities in the U.S. for Home Sellers Right Now
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3. Austin, TX
May 2023 year-over-year active listings change: +112.5% May 2023 median list price: $583,751
It seems no list of real estate superlatives is complete without Austin. The Lone Star State’s capital city had become one of the hottest markets in the country during the pandemic, with demand—and as a result, prices—exploding. Builders raced to put up homes in the area.
But when mortgage rates rose in 2022, the Austin market was one that cooled the most, with list prices falling 15% from May 2022 to January of this year. Since then, prices have been creeping back up, now at 9% below last year’s peak.
Even as prices are back on the rise, the typical Austin home is on the market for eight long weeks before selling, compared with just two weeks during the spring 2022 pandemic pump peak.
No place on our list has a larger portion of listings that have had a price reduction, with more than 1 in 3 listings having been discounted by the seller.
The number of homes available in the Austin metro is back to pre-pandemic levels, thanks in part to the boom in new construction.
4. New Orleans, LA
May 2023 year-over-year active listings change: +81.0% May 2023 median list price: $345,000
The number of homes available in the Big Easy has earned it a place on our list, with an 81% increase.
Worth noting: By this same time last year, New Orleans inventory was already back on the rise. Measuring from the inventory low point, New Orleans has also seen the number of available homes more than double.
The inventory increase hasn’t quite put it back to pre-pandemic levels, but if the upward trajectory continues, New Orleans should reach that milestone in the coming months.
And although list prices in New Orleans haven’t been as swingy as they’ve been in a place like Austin, they have crept back up—and are now less than 1 percentage point shy of the all-time high set in March 2022.
A newly listed, midcentury boathouse on New Orlean’s iconic Lake Pontchartrain can be found for about $375,000.
5. Tulsa, OK
May 2023 year-over-year active listings change: +74.1% May 2023 median list price: $369,450
There are plenty of homes for sale in Tulsa—they just aren’t the more affordably priced properties that buyers are seeking.
“We have so much more inventory right now, and we just have less buyers,” says local real estate agent Tiffany Johnson, of Tiffany Johnson Homes.
It’s a price point game, she says. “You can’t find anything under $150,000, and anything under $300,000 is selling quickly.”
The market has shifted a lot since last year, especially for sellers who now face more competition.
“The buyers who are in the market are very serious. They will make a move quick, but they have so many houses to choose from, so [sellers and agents ] have to be almost perfect,” Johnson says. “They have to find ways to actually market these homes now.”
Rounding out the top 10 metros where the number of homes for sale has increased the most is Raleigh, NC, at 72.7%; Wichita, KS, at 59.8%; Las Vegas, at 57.5%; Greenville, SC, at 57.1%; and Omaha, NE, at 54.4%.
Where inventory is down the most
1. San Jose, CA
May 2023 year-over-year active listings change: -35.3% May 2023 median list price: $1,530,000
Topping the list of places where inventory is tightest is Silicon Valley’s San Jose. The tech hub is one of the most expensive metros in the nation, with a median price tag of $1.5 million.
Posing another hurdle for buyers: The number of homes for sale is still near record lows. The metro area, with more than 2 million people, had fewer than 1,000 homes for sale in May.
Tuan Tran, a Realtor® at Home Page Real Estate in San Jose, sees changes in this unique and wealthy home market amid turbulence in the tech business.
“Now I see a lot of investors holding back,” Tran says, adding that they are waiting to see whether a tech recession runs deeper. “Inflation is still high. Paychecks haven’t gotten much bigger.”
2. Hartford, CT
May 2023 year-over-year active listings change: -26.0% May 2023 median list price: $424,925
Hartford topped our list of markets that will dominate in 2023, and the low home inventory seems to be proving us right.
Buyers from around the Northeast have poured into the “Insurance Capital of the World,” about 90 minutes southwest of Boston and 2.5 hours northeast of New York City, due to the reasonably priced homes for sale and good jobs available.
The city has the fewest price reductions of any city, with only 1 in 14 listings with a markdown.
In another sign of the market’s strength, Hartford boasts the fastest-selling homes of any place on our list, with the typical home spending just 19 days on the market. That’s less than half the national median time of 43 days in May.
3. Milwaukee, WI
May 2023 year-over-year active listings change: -23.4% May 2023 median list price: $374,950
The housing markets in many traditionally affordable, Midwestern cities, like Milwaukee, have continued to chug along, while other pricier markets have sputtered or stalled.
In May, there were 23% fewer homes for sale than the year before. And the median home in Milwaukee is selling in 29 days, just four days more than the all-time low of 25 days in May 2022.
Another indicator of the overall strength of the Milwaukee market: The relatively small portion of homes that have had a price reduction. Only 1 in 10 is marked down.
For those considering selling in Milwaukee, the metrics suggest a quick sale, likely without a price drop, is still the norm right now. Buyers might want to consider this updated, three-bedroom, two-bathroom Cape Cod for about $225,000.
4. Dayton, OH
May 2023 year-over-year active listings change: -20.3% May 2023 median list price: $234,950
Dayton, a Rust Belt city bout an hour northeast of Cincinnati, is the most affordable of all the cities on our list, with prices 45% below the national median. The “Gem City” is home to the National Museum of the U.S. Air Force.
In contrast to what we’ve seen in the markets that got hot during the pandemic pump, prices in Dayton have been steady: no big swings up or down, but a rather steady and slight incline.
Dayton’s median listing price per square foot in May was up 6.7% year over year.
Buyers can find big deals in Dayton. This four-bedroom, 2.5-bathroom house on a third of an acre is for sale for $219,000.
5. Chicago, IL
May 2023 year-over-year active listings change: -18.5% May 2023 median list price: $376,000
The Windy City features near-record low inventory right now.
The number of available homes crept up by about 2% from April to May. But aside from the February 2022 nadir in inventory, there haven’t been this few homes on the market in Chicago in recent history. (Realtor.com listing data goes back to mid-2016.)
“Currently, what my buyers are seeing—and my sellers are experiencing—is that the north side of Chicago, along the lakefront, has, by far, the most pronounced drop,” says Libert of EXIT Strategy Realty in Chicago.
The rest of the top 10 metros with the largest decrease in inventory were Washington, DC, at -15.6%; Bakersfield, CA, at -13.2%; Albany, NY, at -13.1%; Allentown, PA, at -12.5%; and Seattle, at -10.8%.
The simplest options strategies, and safest for beginners, include purchasing calls and/or puts — typically called “going long.” For the bearish investor who believes an asset will see price declines over a well-defined period of time, the simplest strategy is to purchase puts on those assets, i.e., pursue a long put strategy.
What Is a Long Put?
The term “Long Put” describes the strategy of buying put options as well as the options contract itself. The investor who purchases a put has purchased the right to sell an underlying security at a specific price over a specific time period. Being the buyer and holder of any options makes you “long” that option contract.
Because the contract in question is a put, the investor is long the put and bullish on the put option as they expect the put options price to rise. The put option holder is bearish on the underlying asset as they expect its price of the asset to go down.
Since the investor has not sold the underlying asset or its options, the investor does not hold a short position.
💡 Recommended: Options Trading Strategies for Beginners
Maximum Loss
In comparison to other options strategies, long puts are low risk due to their limited and well-defined downside. The maximum amount an investor can lose is the premium paid at the initiation of the transaction.
Maximum Loss = Premium Paid
Because different trading platforms have different commission structures, (some may even provide commission-free trading) commissions are typically omitted from profit and loss calculations.
Maximum Profit
The maximum gain for a long put strategy occurs when the underlying asset drops to zero. While this gain is also limited and defined, it is typically far greater than the potential downside. The maximum gain on a long put strategy is defined as the strike price of the put less the premium paid.
Maximum Profit = Strike Price – Premium Paid
Breakeven Price
The breakeven price on a long put strategy occurs at the strike price less the premium. Note that the formula for the maximum gain and the breakeven price is the same but the two formulas are measuring different things.
The breakeven price is the point at which the investor begins to make a profit. As the price drops past breakeven toward zero, hopefully, the investor can realize the maximum gain possible.
Breakeven Price = Strike Price – Premium Paid
Why Investors Use Long Puts
Investors utilize a long put strategy for three main reasons:
• Speculation: The investor identifies an asset they believe will decrease in price over a defined time period. Buying a long put allows the investor to profit from this forecasted price decrease if it happens.
• Hedging: Sometimes an investor already holds an asset like a stock or exchange-traded fund (ETF) and is concerned that the price of the asset may drop in the short term, but still wants to hold the asset for the long term.
By purchasing a long put, the investor can offset any short-term losses through gains on the put and keep control of the underlying asset. For most assets, this hedging strategy provides cheap insurance.
• Combination strategies: For experienced investors, long puts can be part of complicated multi-leg strategies involving the sale or purchase of other options, both calls and puts, to pursue different investment objectives.
Long Put vs Short Put
In contrast, a short put options strategy occurs when the investor sells a put. Being the seller of a put means the options contract seller is obligated by the options contract to sell shares in an underlying security to the option buyer at the buyer’s discretion.
Everything about short puts is the opposite to long puts:
Long Puts
Short Puts
Investor role
Buyer
Seller
Investor responsibility
Right/Discretion
Obligation
Investor outlook — Asset
Bearish
Neutral to Bullish
Risk
Premium
(Strike Price – Premium)
Reward
(Strike Price – Premium)
Premium
Long Put Option Example
An investor has been watching XYZ stock, which is trading at $100 per share. The investor believes the $100 share price for XYZ is excessive and believes the share price will fall over the next 30 days.
The investor purchases a long put with a strike price of $95 per share for a premium of $5 and an expiration date of 60 days from today. Because options contracts are sold based on 100 share lots, the price for this contract will be $5 x 100 = $500.
The options contract gives the investor the right to sell 100 shares of XYZ at $95 for the next 60 days.
The breakeven price on this investment is:
Breakeven Price = Strike Price – Premium Paid
Breakeven Price = $95 – $5 = $90
Should XYZ be trading below $90 at expiration, the option trade will be profitable.
If XYZ stock should fall to $0 at expiration, the investor will realize their maximum possible profit:
Maximum Profit = Strike Price – Premium Paid
Maximum Profit = $95 – $5 = $90 profit per share or $9,000 per put option
However, if XYZ stock should stay above $90 at expiration, the investor will realize their maximum possible loss and the option will expire worthless:
Maximum Loss = Premium Paid
Maximum Loss = $5 per share or $500 per put option
Even if XYZ rose above the $100 price at purchase, the investor’s loss would still be limited to $500.
The Takeaway
Long put options provide an excellent entry point for newly minted options investors to dip their toes into the market. The trading strategy offers significant profit potential if investors make the right call on the underlying security’s future performance while providing limited downside risk.
If you’re ready to try your hand at options trading, You can set up an Active Invest account and trade options online from the SoFi mobile app or through the web platform.
And if you have any questions, SoFi offers educational resources about options to learn more. SoFi doesn’t charge commissions, and members have access to complimentary financial advice from a professional.
With SoFi, user-friendly options trading is finally here.
Photo credit: iStock/Paul Bradbury
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Neither the Investment Advisor Representatives of SoFi Wealth, nor the Registered Representatives of SoFi Securities are compensated for the sale of any product or service sold through any SoFi Invest platform. Information related to lending products contained herein should not be construed as an offer or prequalification for any loan product offered by SoFi Bank, N.A. Options involve risks, including substantial risk of loss and the possibility an investor may lose the entire amount invested in a short period of time. Before an investor begins trading options they should familiarize themselves with the Characteristics and Risks of Standardized Options . Tax considerations with options transactions are unique, investors should consult with their tax advisor to understand the impact to their taxes. Exchange Traded Funds (ETFs): Investors should carefully consider the information contained in the prospectus, which contains the Fund’s investment objectives, risks, charges, expenses, and other relevant information. You may obtain a prospectus from the Fund company’s website or by email customer service at [email protected] Please read the prospectus carefully prior to investing. Shares of ETFs must be bought and sold at market price, which can vary significantly from the Fund’s net asset value (NAV). Investment returns are subject to market volatility and shares may be worth more or less their original value when redeemed. The diversification of an ETF will not protect against loss. An ETF may not achieve its stated investment objective. Rebalancing and other activities within the fund may be subject to tax consequences. SOIN223451
The Hottest Thing in Real Estate Is a Loan From Two Years Ago
Real estate agents are pushing sub-3 percent mortgages as an amenity, just like marble countertops or a view of the mountains.
June 10, 2023
The only goal was to not lose money.
When Matthew Kilboy listed the Washington, D.C., condominium that he and his husband had bought in 2017, they accepted that higher interest rates and a soft market for condos meant any dollar over the $529,000 they had paid was a dollar they would thank their lucky stars for.
A similar two-bedroom and two-bath unit in the building had recently gone for just under half a million. The $549,000 price they listed in April was basically a wish.
A month later, the couple closed at $565,000 — thanks to a little-known amenity that has become increasingly popular as mortgage rates have risen. Their unit came with an assumable 30-year mortgage, with a 2.25 percent fixed rate that the couple had locked in after a November 2020 refinancing. By advertising that the buyer could inherit the mortgage, the couple, who have moved to Denver, got several over-asking-price bids that seemed like a relic from the warped real estate market during the Covid lockdown.
“It was the very first sentence of the listing,” said Mr. Kilboy, 39, a former Navy nurse whose loan, backed by the Department of Veterans Affairs, could be passed to the buyer. “No one could find an interest rate that low, so we were really pushing it.”
resumed their ascent, despite a huge increase in borrowing costs. The refrain among real estate agents and economists is that anyone who secured a mortgage rate of 3 percent or lower owns a valuable asset that they are loath to give up.
But every asset has a price. And now an emerging cadre of investors and real estate agents are trying to, in effect, sell mortgage rates from several years ago by transferring them to new buyers.
Redfin, the real estate brokerage, has seen a steep rise in listings like Mr. Kilboy’s that have comments like “beautiful home with assumable loan at 3.25 percent.” Facebook groups have popped up to find buyers for them, while new companies are pitching services to speed up the transfer.
Assumption Solutions, a consulting firm that, for a $1,100-per-deal processing fee, helps real estate agents navigate transferring mortgages between sellers and buyers. In his pitch to agents, Mr. O’Boyle argues that they push sub-3 percent rates as they do marble countertops or a view of the mountains.
“You market this, and let’s say you’re competing against the house next door, your house should sell either faster or for more money,” he said.
2/1 buydown,” in which a borrower pays for an interest rate reduction of two percentage points during the first year and one percentage point in the second.
Put simply: “Most homes are unaffordable at today’s rates,” said Luis Solis, a real estate agent in Phoenix and Portland, Ore.
A majority of Mr. Solis’s recent deals have had some form of interest rate compensation that is a price cut in all but name, he said. Usually it’s a lump sum at closing that buyers use to buy temporarily lower rates. Sellers with a lot of equity can cut out the middleman and finance the buyer’s purchase below prevailing rates by acting as a lender — seller financing, it’s called.
Assuming mortgages, paying down rates: These are creative but straightforward solutions to rising borrowing costs. But on the margins, a rising number of investors looking to buy homes with minimal cash are trying a gray technique of finance — known as “Subject to” or “Subto” — in which they try to find people who have fallen behind on their debts and make a side agreement to take over their (low-interest) payments. (The deal is said to be “subject to” an existing loan.)
@ConorDougherty
A version of this article appears in print on , Section BU, Page 1 of the New York edition with the headline: The Hot New Thing Is a Loan From 2021. Order Reprints | Today’s Paper | Subscribe
Last Updated: April 6, 2020 BY Michelle Schroeder-Gardner – 45 Comments
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Lately, I’ve been hearing more and more about families relying on credit cards for their emergency savings fund.
This is something that scares me as while credit cards may work for some, I believe that emergency savings funds are a better solution for the average person. Whatever emergency fund amount you decide on, it’s better than nothing in my mind.
As I stated in the article Everything You Need To Know About Emergency Funds, 26% of Americans have no emergency fund whatsoever.
Also, only 40% of families have enough in savings to cover three months of expenses, with an even lower percentage having the often recommended six months worth of savings.
There are many things you should think about when it comes to whether or not you should use a credit card as your emergency fund.
What’s your financial situation?
Different people need a different emergency fund amount.
Some of the things you will want to think about when determining your emergency fund amount is the stability of your job, your income when compared to your expenses, whether you own a house and/or car or not, your health, and more.
Basically, the “riskier” your situation, the larger the emergency fund you will most likely want. If your situation is quite risky, then using a credit card for your emergency fund may be a bad idea because there is a large chance you may rack up credit card debt that you are unable to pay off whenever an emergency arises.
How much risk are you willing to take on?
By relying entirely on credit cards, you are going to be taking on a lot of risk.
You never know if something may come up, how big the expense may be, and whether or not you will have enough credit to fund the expense.
Plus, the interest rate on your credit card may hover somewhere near 25%, which can make for an expensive bill if you are unable to pay your credit card bill before interest accrues.
When does using a credit card for your emergency fund amount make sense?
Now, I understand that different techniques work for different people. There are situations where using a credit card for your emergency savings fund may not be a completely bad idea. If you know that you can pay off a large expense within one month (such as if you have a large income but a low level of expenses), if you have a lot of credit card debt at high-interest rates that you are trying to pay off (your money may be put to better use by paying off your debt first), and so on.
However, the problem with this thinking is what happens if you lose your job? Many have emergency funds that exist so that they can support themselves if they were to lose their job. What would happen if you relied on credit cards but lost your main source of income?
It would lead to a lot of credit card debt. Unmanageable credit card debt…
Having a “real” emergency fund can be much more worthwhile.
There are many other reasons to have a fully-funded emergency fund:
An emergency fund can help you if you lose your job. No matter how stable you think your job is, there is always a chance that something could happen where you may need money fast.
An emergency fund is wise if you don’t have great health insurance. This is another reason why we have a well-funded emergency fund. We do not have the greatest health insurance, with our deductible being over $12,000 annually. Having an emergency fund can help protect us if something were to happen to either of us.
An emergency fund is a good idea if you have a car. You just never know if it may need a repair.
An emergency fund is a need if you own a home. One of the lucky things that homeowners often get to deal with is an unexpected home repair.
An emergency fund can protect you in many other areas as well. This can include if you have a medical cost for your pet, if you have to take time off work for something, you need to go somewhere far to visit someone who is sick, and so on.
An emergency fund is always good to have because it can give you peace of mind if anything costly were to happen in your life. Instead of building onto your stress because of whatever has happened, at least you know you can afford to pay your bills and worry about more important things.
As you can see, there are plenty of positives of having an emergency savings fund. However, I know that different things work for different people and that some prefer to use credit cards in the case of an emergency.
What do I think?
I think everyone should have some sort of emergency savings fund. Even if you can only manage $500 to $1,000 right now, that is better than nothing. $500 to $1,000 can still most likely help you by for at least a little bit. Plus, you can still put money towards high-interest rate debt after you build up your specific emergency fund amount.
My problem with using credit cards as your sole source for an emergency fund is that it may lead to more debt in some situations.
Do you rely on credit cards for your emergency savings fund? What do you think of relying on credit cards for your full emergency fund amount?