A new startup called “Roam” has launched a service to make assuming a mortgage painless.
The company is backed by some prominent real estate figures, including Opendoor co-founder Eric Wu and former Fannie Mae CEO Tim Mayopoulos.
The goal is to help more home buyers take advantage of the many low-rate mortgages in existence via a loan assumption.
This includes FHA loans and VA loans, both of which are assumable by home buyers.
Roam acts as a hands-on guide for buyers and sellers to ensure the process goes smoothly in exchange for a 1% fee.
How Roam Makes It Easy to Assume a Mortgage
While many home loans are assumable, including all government-backed loans (FHA/VA/USDA), the process isn’t so straightforward.
Roam notes that the loan assumption process is “opaque and time-consuming,” and often requires buyers to fill out forms with paper and pen and fax them to the lender or loan servicer.
There’ also uncertainty for the home seller, who might not be sure if they’re still liable for the loan post-assumption.
To alleviate some of these pain points and ensure the process is done correctly, Roam manages all the operational details on behalf of the buyer, seller, and real estate agents.
Additionally, it makes it easier to find homes for sale that feature an assumable mortgage.
Once you sign up via their website, they’ll compile a set of for-sale listings that feature an assumable, low-rate mortgage.
These listings will also be tailored to fit your other criteria, such as location, home price, number of bedrooms and bathrooms, and so on.
At the moment, it seems only FHA loans and VA loans are included, not USDA loans.
If you come across a property you like, they will work with the lender and loan servicer to begin the loan assumption process.
As noted, this includes obtaining a release of liability of the loan for the home seller, which should ease their concerns as well.
Bridging the Gap Between Old Loan Amount and New Purchase Price
One sticking point to a loan assumption is the shortfall between the sales price and the remaining loan balance.
For example, the existing loan balance might be $450,000, while the new sales price is $550,000.
The buyer could come in with the difference, but it’s unlikely they’ll have the funds unless they have very deep pockets.
In this case, Roam has “preferred partners” that can provide additional financing, typically in the way of a second mortgage.
Together, this should still provide a blended rate that is well below current market rates.
If we consider a 2.5% first mortgage at 70% loan-to-value (LTV) combined with a second mortgage for an additional 10% at a rate of 8%, the blended rate is roughly 3.2%.
At last glance, the 30-year fixed is priced around 7.25%, so that represents quite the discount.
To that end, only mortgages with rates below 5% are included in the Roam listings.
How Much Does It Cost to Use Roam for an Assumable Mortgage?
While this service sounds pretty great, there is a cost to use it. At the moment, Roam is charging 1% to the home buyer via closing costs. I assume the 1% is based on the assumable loan amount.
In exchange for this fee, Roam says it will “coordinate every detail on behalf of sellers, buyers, and agents,” including connecting buyers and sellers, handling paperwork, and overseeing the financing.
Home sellers do not need to pay anything to take part and Roam will ensure the seller’s name is removed from the mortgage.
This means sellers will not be associated with the mortgage or held liable once the process is completed.
That should provide peace of mind to the seller, who might be concerned about their credit score being affected by the buyer’s subsequent mortgage payments.
If it’s a VA loan that is being assumed, Roam can help find a qualified military buyer if the seller would like to free up their entitlement.
This allows military homeowners to take out a new VA loan when it comes to their next home purchase.
Roam may also make money from their second mortgage partners, though they are fine with home buyers using the lender of their choosing.
Same goes with real estate agents. If the home seller doesn’t have a listing agent, Roam can recommend one. This may also earn the company a fee.
But the company can work alongside any listing agent, loan servicer, or mortgage provider to complete the process.
Is This a Good Deal?
Over the past couple decades, assumable mortgages weren’t a thing because mortgage rates were constantly falling.
In fact, mortgage rates hit record lows in 2021 and have since nearly tripled in just over two years.
This has finally made the assumable mortgage a thing, and a potentially very powerful thing.
If a home buyer is able to obtain the seller’s mortgage, possibly in the 2% range, it would be a huge feat, even with a 1% fee.
For example, take a $500,000 home purchase that has a $400,000 outstanding loan balance set at 2.5%.
The $400,000 loan amount would be about $1,580 per month. But let’s suppose the home buyer needs a second mortgage to bridge the gap with the new purchase price.
A $50,000 second mortgage set at 8% would be another $367 per month, or about $1,950 all in.
Compare that to a single new mortgage at $450,000 with an interest rate of 7%, which would be roughly $3,000.
And it could be subject to mortgage insurance as well if it’s one loan at 90% LTV.
The only thing you’d really need to watch out for would be an inflated purchase price if the seller believes they can charge more thanks to their assumable mortgage.
But even then, the property would need to appraise and the savings could still eclipse a slightly higher price, as explained in the scenario above.
Roam is initially available in the states of Arizona, Colorado, Florida, Georgia, and Texas, with other markets expected soon.
If you’re itching to make improvements to your home with hopes of upping your resale value, you may be tempted to renovate your bathroom, kitchen or closets. Although these updates can increase buyer appeal, as well as add to your own enjoyment of your abode, the return on investment for these projects typically is low.
The home improvement projects that will pay back the most aren’t as glamorous, but you’ll recoup more of the expense when you sell your home.
Here are the five projects that offer the most value by boosting your home sale price and allowing you to recover most of the money you spent—possibly even more than you spent—according to the 2015 Remodeling Impact Report by the National Association of the Remodeling Industry and the National Association of Realtors.
1. Replacing your roof
Although putting a new roof on your home may not feel quite as satisfying as upgrading your kitchen appliances or installing a shiny new spa tub, it’s the home improvement with the best return on investment, according to the report. Homeowners who replace their roof can expect to recoup 105% of the value, meaning they’ll actually make money on this project.
The NARI estimates you’ll spend $7,600 to tear off an old roof on a 2,450-square-foot, two-level house; install laminated, architectural asphalt shingles; place new flashing around pipes and chimneys; and install a new ridge vent. The project isn’t cheap, but you can recover $8,000 in costs for your effort.
There’s no need to replace a perfectly good roof, but if yours has wear and tear, it could be a good investment before you sell.
2. Refinishing your hardwood floors
The home renovation project with the second-highest ROI is refinishing your hardwood floors. Transforming dull, scratched wood floors into shiny, good-as-new flooring is a great deal: Homeowners typically recoup 100% of the expenses.
Freshening up scuffed wood flooring in an 18-by-20-foot family room costs approximately $2,500, the NARI estimates, which includes sanding floors to bare wood, refinishing them with polyurethane and adding new matching baseboards. Because homeowners typically are able to gain back the full value of this project when selling their home, it’s a worthwhile project.
3. Upgrading your insulation
An insulation upgrade offers the third-best potential for recovering the value of the project, at 95%. Expect to spend about $2,100 for adding 10 inches of blown-in cellulose insulation to your attic, according to NARI estimates, but you’ll recover approximately $2,000 of that cost. And you’ll lower your energy bills by upgrading your insulation.
4. Installing wood flooring
The NARI estimates that it costs homeowners $5,500 to replace worn carpet with new, solid oak flooring and baseboards in an 18-by-20-foot room. But the value recovered is $5,000—91% of the expense—making it the home improvement project with the fourth-highest ROI. Although you won’t regain the full value when you sell your house, new wood floors can significantly improve the look of your home, boosting buyer appeal.
5. Replacing your garage door
Replacing a creaky, slow garage door with a new one also has relatively high value for homeowners. You won’t recover the full value of the upgrade, an estimated $2,300, but you’ll gain back 87%—that’s $2,000—when you sell your home, the NARI estimates.
Next steps
If you’re ready to kick off some of these projects but don’t have enough cash in your bank account, a cash-out refinance is one way to fund home upgrades. Try NerdWallet’s refinance calculator to see whether that option makes sense for you.
Want to learn how to invest in self-storage? I have stored boxes of my stuff plenty of times over the years and there’s a good chance that you have as well (or perhaps you know someone who has). Investing in self-storage facilities can be a relatively low-risk asset for people looking to diversify their income…
Want to learn how to invest in self-storage?
I have stored boxes of my stuff plenty of times over the years and there’s a good chance that you have as well (or perhaps you know someone who has).
Investing in self-storage facilities can be a relatively low-risk asset for people looking to diversify their income streams. Or, perhaps you’re looking for a full-time income and are looking for your own business to start!
So, what exactly is investing in self-storage?
It is when you put your money into self-storage facilities and rent out units to renters.
I have personally used self-storage facilities for many reasons over the years for a short-term period, and nearly every single time I think about the profitability of it all and how passive it seems to be a self-storage owner or self-storage investor.
There are usually no customers at the facility (I’ve almost always been the only one there when dropping off or picking up), but every unit is being rented. Seems like an interesting way to make money with not too much work!
Plus, over 9% of households pay for self-storage units, and there is a lot of demand for new facilities.
Quick Summary
Self-storage investing can be a way to make money and run a business with low expenses
There is a lot of demand for storage units, with many businesses having a very long waitlist
If you don’t want to run a business, you can also buy shares in an REIT or even just rent out your garage or basement
What is Self-Storage Investing?
To put it simply, self-storage investing is when you invest in storage facilities.
More and more people need storage units for many different reasons such as moving, downsizing a home, needing a place to store something that a person doesn’t have room for (such as an RV or boat), or even businesses that are storing extra inventory.
For example, someone might need a short-term lease to store their belongings due to being in between homes (like if they are moving but their next home isn’t ready yet). Or a person on a long trip may decide to sell their home, but they need a place to store their important items.
If you decide to invest in self-storage, you have a couple of options. You can start by purchasing and owning a facility yourself or passively invest by buying shares in a self-storage REIT (Real Estate Investment Trust). I will be going over each of the options further below.
Related content:
Is Self-Storage a Good Investment?
Yes, deciding to invest in storage units can be a good idea.
According to Neighbor, the average profit margin on a self-storage unit is around 41%, and they typically have high occupancy levels of around 92%.
One of the main positives of investing in self-storage is being able to earn income with less work (you’re not dealing with customers all day long – people tend to store their stuff and not visit it often).
Self-storage facilities usually have low expenses compared to other types of commercial real estate investments. Also, self-storage is usually recession-resistant as people still need to store their stuff.
Another benefit of investing in self-storage is the flexibility it offers because you don’t need very many employees to run a storage lot. Some lots that I’ve been to don’t even have any employees – instead, you call the owner when you want to get your stuff and they then send someone down. People tend to store their stuff and not touch it for a while.
Related: 18 Passive Income Ideas To Earn $1,000+ Each Month
Types of Self-Storage Facility for Investment
When investing in self-storage facilities, you may not know that there are a few different types.
This section will discuss the different self-storage facilities you can invest in.
1. Climate-Controlled Storage
Climate-controlled storage is something that more and more people want these days because it can protect their belongings from temperature changes and humidity.
After all, many places get very hot weather, and storage units can get quite hot inside. You don’t want your things to melt into each other.
These types of units are good for storing items like electronics, artwork, or documents.
Now, your location is important in deciding if you need climate-controlled self-storage, as areas with extreme temperatures or humidity obviously will need AC more. For example, a storage facility in Florida may be more likely to have air conditioning than a facility in Alaska. And, a facility in Alaska is more likely to have heat than a storage unit in Florida.
2. Mixed-Use Storage
Mixed-use storage facilities combine multiple types of storage units in one location.
For example, these types of facilities may have climate-controlled, drive-up, boat, and RV storage all in one place. Many storage facilities are like this. They cater to different customer needs and tend to have a broader target market due to being able to store so many different types of items.
People tend to like these forms of storage as they can store all of their belongings in one place, instead of having their stuff scattered across town.
3. RV and Vehicle Storage
With so many people owning RVs and extra vehicles, the demand for storage has increased over the years.
Also, many neighborhoods simply do not allow for RVs or extra vehicles to be parked in front of their home (or even in their driveway, backyard, etc.), so a storage lot is needed.
Some storage facilities may even just be massive warehouses where people can store their RVs, valuable cars, and boats inside.
We have stored an RV in a place like this many times. We have found the typical rent to be around $5 to $10 per foot for our RV in an indoor parking lot, so you can see how quickly storage revenue can add up! Some businesses even have private RV units, and those fetch a much higher rate, such as $400-$600+ per month.
4. Boat Storage
Boat storage facilities specialize in safe storage for boat owners during the off-season or when not in use. These types of facilities typically have long waitlists too.
Boat storage businesses sometimes have both indoor and outdoor options (or they may focus on one or the other), as well as extra services like boat maintenance, hauling, launching, and more.
Coastal regions or areas with nearby water access (such as Florida) are usually good locations for investing in boat storage facilities as there are more boats, of course.
We have used boat storage facilities many times over the years to store our own boat. The amount you can make per boat can be anywhere from a couple hundred to a couple thousand dollars each month, depending on the location and the type of boat (catamaran vs. small fishing boat, for example) you can store. We have paid anywhere from around $1,200 to over $2,000 a month in the past for boat storage.
5. Drive-Up and Outdoor Storage
This is the type of storage that pretty much everyone has seen, as they are very common.
With this type, customers can drive directly to their storage unit, making loading and unloading much easier. These types of facilities are usually single-story buildings. Many times they do not have AC or heat.
Drive-up and outdoor storage facilities give renters an easily accessible storage solution.
How to Invest in Self-Storage
If you want to invest in self-storage, there are a few different ways to do so.
1. Buy an Existing Self-Storage Facility
One of the easiest ways to enter the self-storage market is by purchasing an existing business, such as those for sale by mom-and-pop operations.
This can save you time as everything is in place and you already have customers with rented units. Yes, you can improve some of their processes, but a lot of the hard work is already done for you.
But, purchasing a facility can be expensive upfront, though, because you will be buying a business with land, a building, and an existing customer base.
Just as an FYI – As you’re looking for storage facilities that are for sale, you may come across different classes. Class A facilities usually are higher-quality climate-controlled storage units, whereas Class B and Class C facilities may be lower-quality.
Buying an existing storage lot can possibly make you more money than investing in REITs (discussed further below), but it also means more hands-on management and responsibility because you will be actively running a business and managing employees.
2. Build a New Self-Storage Facility
There are around 2 billion square feet of storage space in the U.S. alone, but there is a high demand for more. Many self-storage facilities have long waitlists even!
I have called many storage lots only to find out that they had waitlists that were years long. I have even several times called every single lot within a few state radius, and found that every single one had a waitlist.
Yes, the storage business is really in that much demand!
As a self-storage investor, you can take advantage of this high demand and build your own storage facility.
To create a self-storage facility from the ground up, you will need to do the following:
Find land to buy – Once you know that an area needs a storage facility, you will need to find land to buy to build on. You will also want to make sure that it is easy to drive to (for example, if you are building an RV storage lot, you don’t want low bridges as the only way to get to your lot because no one will be able to get there then).
Build – After you buy the land, you will need to think about what you want your facility to look like, then hire a construction company to build your plan.
Open up for business– Once the facility is built, you will need to market it and get customers. You will also want to set up the systems to manage daily operations effectively and as passively as possible.
Self-storage is in demand, so building a new storage business can be a way to get started and make money.
3. Buy Shares in a Real Estate Investment Trust (REIT) That Focuses on Self-Storage
If you want to invest in self-storage without actually owning and managing a business, one way is to invest in an REIT.
REITs are a type of investment that allows you to buy shares in a company that owns self-storage facilities. Think of it like shares of stock in a company that you can buy.
With REITs, you can invest in a portfolio of self-storage properties without physically owning or managing the facilities yourself.
This is more passive because you don’t need to hire employees or do maintenance checks.
4. Rent Your Space on Neighbor.com
If you have extra space in your own home such as a garage, closet, driveway, or spare room, you can rent it out as storage space through a platform like Neighbor.
With this site, you can earn $100 to $400+ each month (the rate you can get depends on demand in your area and the type of storage you are renting out).
Here’s how Neighbor works:
Sign up for a free account – Create an account on Neighbor by clicking here.
Describe your space – Write a detailed description of your space, including the dimensions, location, and any features (such as air conditioning or heat). Add pictures of the space as well so that potential renters can see what you are renting out.
Set your price – Choose how much you want to charge for renting your space.
Manage rentals – Connect with interested renters, agree on terms, and manage ongoing rental contracts, all through the Neighbor platform.
You can learn more at Neighbor Review: Make Money Renting Your Storage Space.
Advice for managing a self-storage facility
If you decide to run your own storage facility, then here are my tips for new self-storage operators.
Making money from self-storage
To make money from your self-storage facility, you need to think about what your customers want. So, you may sell amenities to your renters, such as vehicle washing, starting up their vehicle or checking on it, electrical plugins to charge vehicles or RVs, and so on.
You’ll also want to think about how much money it will cost you to actually run the business. Will you need to hire workers? How much will maintenance cost you so that you can keep the facility in good condition?
Security in self-storage facilities
Security is very important for customers when choosing a self-storage facility. Customers care about their stuff and they don’t want anything happening to it, such as it being stolen.
So, you will want to make sure that your facility has a lot of light (especially at night time), security cameras aimed at different angles, and gates with codes. This helps your customers feel safer about leaving their stuff at your storage facility, and also helps to protect your business from liability issues and bad reviews (for example, if a person has their stuff stolen from your facility, they are likely to leave a bad review and this can cause others to not use your storage units as well).
Frequently Asked Questions About How To Invest In Self-Storage
Here are answers to common questions about investing in self-storage.
How can I find a self-storage business for sale?
To find a self-storage business for sale, you can start by searching on websites like LoopNet and BizBuySell. I took a quick look at both of these sites and found many for sale quite easily from anywhere in the hundreds of thousands to in the millions of dollars price range.
What are the best self-storage stocks to invest in?
The best self-storage stocks for you to invest in will depend on your own money goals and the amount of risk you want to take on. Unfortunately, I cannot tell you which is the best self-storage stock, as I am not your financial advisor and I do not know your specific situation. But, I can tell you which ones are popular.
Some of the most popular and best self-storage stocks include Public Storage (PSA), Extra Space Storage (EXR), and CubeSmart (CUBE).
Which self-storage REITs have the best returns?
Real estate investment trusts (REITs) are a popular way to passively invest in self-storage facilities. Several well-known self-storage REITs include Life Storage (LSI), National Storage Affiliates (NSA), and Simply Self Storage (SSS).
Keep in mind that past performance and dividends do not mean that the same will be true in the future, so it’s important to do your own research.
What risks are there with investing in self-storage?
Like with all businesses, there are risks when it comes to self-storage. Some risks include competition, changes in demand, and possible natural disasters that could hurt the facility (such as a severe storm or a flood).
Also, managing a self-storage facility will, of course, require at least some time from you and may even require employees, so you should also think about operational costs and business management.
How profitable can a self-storage business be?
The amount of money that a self-storage business can make depends on many things such as location, demand, and operating costs.
Can owning a self-storage unit generate passive income?
Having a self-storage facility can earn you passive income through rental fees. But, managing a self-storage facility also requires that someone works at the business, to check people in, show units, and check on the property. You could hire employees so that it is more passive for yourself.
You can also earn passive income by investing in self-storage REITs or stocks instead of owning and running a storage facility.
Does self-storage do well in a recession?
Self-storage in the past has performed relatively well during recessions, as people often downsize their homes or need temporary storage. Of course, though, the past doesn’t mean that it will always do well. So, it is always best to do your research and prepare as best as you can.
What is the future outlook for self-storage?
The future for self-storage looks to be positive, as there is a lot of demand for storage units and I’m still constantly seeing waitlists everywhere. In fact, whenever I need to store something even for just a few months, I’m always being told that I need to call a year in advance for a spot.
Many storage facilities have a high occupancy rate, long waitlists, and cannot keep up with demand.
How To Invest In Self-Storage – Summary
I hope you enjoyed today’s article on how to invest in self-storage.
If you are looking to add a new asset class to invest in, becoming a self-storage investor can be an interesting way to bring in a stable cash flow and make more money.
Self-storage is in high demand too, with many businesses currently having a long waitlist.
Factors such as location, demand, the quality of facilities (Class A, Class B, and Class C), and the type of storage lot all can change the success of a self-storage investment.
Are you interested in learning how to invest in self-storage?
Are laundromats profitable? Or, are laundromats a dying business? Learn how much laundromats make and if laundromats are a good investment.
Are laundromats profitable? Is buying a laundromat a good investment?
Ever wondered if owning a laundromat is as profitable as people say?
I’ve been seeing a lot of videos on social media lately talking about how much money laundromats make (seems like it’s a popular small business idea right now!). So, I wanted to do my own research and learn as much as I could on the topic of laundromat businesses to see why it’s trending so much.
Whether you are looking to make extra income or if you plan on opening several laundromat businesses, there are some things to think about before you get started.
In today’s article, we’re going to talk about:
How profitable a laundromat can be
The pros and cons of owning a laundromat
Why a laundromat may be a smart investment
Tips on how to find a laundromat to buy
And more.
Quick summary: Yes, laundromats can be a way to make money (and even passive income!) due to people needing to wash their clothes and low costs to run. However, the amount of money that you can make is based on factors such as location and maintenance costs (new machines can be expensive!). High-quality laundromats with lots of amenities are in, and the old days of dirty and hot laundromats are not.
Are Laundromats Profitable?
Is owning a laundromat a good investment? Is owning a laundromat a good way to make money?
According to the Coin Laundry Association, there are around 35,000 laundromat businesses in the United States and nearly 95% of laundromats succeed.
That is a pretty good success rate.
It’s important to understand that, like with any other business, laundromats require an investment of money—both initial and ongoing. You’ve got your rent, machines (you will need more expensive commercial laundry equipment), utilities, and insurance.
The good news is, your income would hopefully be higher than these costs, making you a profit at the end of the month. Some people are able to run a laundromat as their full-time income, and for others it may simply be one of their side hustles.
The amount of money that you can make from a laundromat depends on your management skills, the location of your business (the average laundromat user lives within 1 mile of the laundromat that they use, so you want to be close to your customers!), and more.
Related content:
Is a Laundromat A Smart Investment? Do Laundromats Make Money?
This is a hard question to answer, as everyone is different!
For some people, a laundromat can be a smart investment, for others it may not be. The good thing, though, is that you are reading this article so that you can figure out if owning a laundromat is for you or not.
Yes, many laundromats make money. On average, a laundromat can earn a profit of around 20% to 30%.
Note: Before making a decision, I highly recommend reaching out to a financial advisor before making any decisions.
Factors Impacting A Laundromat’s Net Income
There are numerous things that can impact how much money a laundromat can make such as:
Location– The location of a laundromat is important in how much money you can make. This is because a laundromat located in a populated area often makes more money than one in a less populated area. The reason is, that when there are more people, there are more people likely to use laundromats.
Competition– If there are other laundromat businesses nearby, this could impact your profit because you now have competition. This is because too much competition may mean that there are less customers coming to your business.
Demographics– The demographics of people living around the area of your laundromat are important. For example, laundromats tend to do better in areas with a lot of renters, college students, or households without a washing machine or dryer (of course).
We recently stopped to use a laundromat while we were traveling in our RV. One thing we noticed was that this laundromat had a ton of amenities. Now that I’m thinking about it, this laundromat business owner was smart. They knew what their potential customer needed. They opened a laundromat right next to a popular cross-country trail, and added great amenities such as snacks and even a pay-to-use shower. These factors helped this laundromat stand apart from its competition and probably led to more people using it because it was a one-stop shop.
Some laundromats can earn profits as high as 35% or more! These are usually high-volume operations in urban areas with lots of people living nearby and they tend to offer a wider range of services such as wash-and-fold or dry-cleaning.
Owning a laundromat can be a smart investment for some people because they can possibly have a stable flow of income.
However, you will want to keep in mind that success in this type of business still depends on careful planning, an understanding of your local market, and more. Not everyone will succeed, of course.
How To Find Laundromats For Sale
Jumping into the laundromat business begins with finding a laundromat business that is for sale, or starting your own business from the ground up.
If you are looking for a laundromat business that already exists and is for sale, here are some tips and strategies for locating a laundromat for sale.
Online platforms– Many websites list laundromat businesses for sale. Examples include BizBuySell and LoopNet. These platforms can be your first stop so that you can easily look at laundromat listings. I was able to find many laundromats for sale, ranging from around $100,000 to over $1,000,000. These sites will give you a lot of information too, such as the revenue, monthly rent that the laundromat pays, the year it was started, and some background on the business.
Broker assistance– There are commercial real estate brokers with experience in the industry that can be invaluable resources. These individuals often have connections and insights that you may not have as an individual buyer. You may want to search for commercial real estate brokers in your local area and see who can help you find a laundromat business for sale.
Local advertisements– Sometimes laundromats are listed for sale in your local newspaper. You can see if there is a business for sale section in your local paper to get started.
Important Things To Think About When Purchasing A Laundromat
When you come across a potential laundromat to buy, here are some things to think about:
Location– As mentioned in the earlier sections, the location of a laundromat plays a very important role in if the laundromat will be successful or not.
Condition of equipment– Commercial laundry machines are expensive. These are not the washer and dryers that you have in the home you live in. These are meant to take a lot of loads and be running nearly all the time. Due to this, you will want to inspect the machines thoroughly and, if possible, have a professional technician check them. This is because broken or old machines could result in costly repair or replacement costs.
Business finances– If you find a laundromat that you are interested in, then you should ask to see their financial records and carefully review them.
Lease agreement– Many laundromats do not own the building that they are doing business from. Due to this, you will want to look at the terms of the lease. A laundromat with a long-term lease allows for longer operations without the risk of eviction or a sudden rent increase.
Demographics and competition– As you read in an earlier section, knowing more about the demographics of the local area, as well as about your laundromat competition, is important too.
Remember to approach this process with patience. Investing in a profitable laundromat is a journey that requires careful planning, research, and due diligence.
Owning A Laundromat
Operating a laundromat is more than just collecting coins from machines. There are maintenance needs, customer concerns, and potential unexpected issues that you may come across.
Below, I take you through the typical day-to-day operations of a laundromat.
Day-to-Day Operations Of A Laundromat
Opening up– Regular, reliable hours are important in the laundromat industry. Therefore, opening up the store in the early morning is always a good idea as many people like to get their laundry done first thing. Plus, many of your customers will be repeat clients, so making sure that you open up at the same time each day is required.
Machine maintenance and cleanliness– When running a laundromat, you will need to check on the washers and dryers, perform required maintenance, and make sure that your business is clean. You will also want to make sure you are well-stocked with detergents and fabric softener.
Customer service– While the average laundromat only has 2 employees or less, you will want to have good customer service. After all, a happy customer is far more likely to return and recommend your services to others.
Financial management– Collecting payments and record-keeping is something that is done every single day.
Tips on Managing a Profitable Laundromat
Sell extra services– Successful laundromats tend to sell many more services other than just self-service laundry. Due to this, you may want to also try diversifying your income streams so that you can make more money from your laundromat. You can sell other services such as wash-and-fold services, dry-cleaning, dog washing stations, showers, or even have vending machines.
Maintain your machines– Regularly maintaining your washer and dryer machines minimizes downtime and expensive repair costs, so that your laundromat can run smoothly.
Promote your business– Word of mouth is so important in this type of business, but don’t shy away from using social media or local advertising to draw in potential customers.
Running a money-making laundromat is much more than keeping the machines running. It involves good customer service, finding more services to sell, and marketing your laundromat business.
Frequently Asked Questions About Laundromats
Here are common questions about owning a laundromat.
How much profit can you make from a laundromat? How much do laundromat business owners make?
The profits from laundromats vary depending on location, operation expenses, size of the laundromat, the amenities you sell, and more. The average laundromat business sees a profit margin of around 20% and 30%.
The national average income for self-serve laundromats ranges between $15,000 to $200,000 per year. As you can see, that is a wide range and that is because it just depends on so many different things.
What are the pros and cons of owning a laundromat?
Like with any business, there are positives and negatives. Owning a laundromat isn’t for everyone.
Owning a self-service laundromat can earn you money and can be a stable, low-risk investment with low operating costs. It can be a fairly passive income stream as well, as you don’t need many employees (the average laundromat has 2 or fewer employees). However, running a laundromat isn’t all easy, there are challenges such as high start-up costs, machines braking, and more.
The challenges of running a laundromat include that high-quality commercial laundry machines can be quite expensive and purchasing or leasing a location with enough space for machines and customers can be a significant portion of startup costs. Also, wear and tear is going to happen in a laundromat as machines get constant use, and the cost of repairing or replacing machines can add up.
Is owning a laundromat a smart investment? Is owning a laundromat worth it?
Owning a laundromat can be a smart investment, and it can be worth it for some people. But, it will cost you money.
It costs around $100,000 to $300,000 to start a laundromat. Starting or buying a laundromat can be high, but it can also earn you a steady income. But, that doesn’t mean that it’s a smart investment for everyone. There are many factors that go into running a successful laundromat.
How to find laundromats for sale?
You can find laundromats for sale through websites, commercial real estate agents, or business brokers. You can also network with existing laundromat owners or associations who can provide insights into potential sale opportunities.
Are laundromats a dying business?
The laundromat business has changed over the years, but they are still very much needed. People use laundry facilities all the time, including myself such as when I am traveling in my RV or boat. Everyone needs to wash their clothes.
There are ways to keep your business up to date, such as having a laundromat that accepts different methods (such as credit card and cash), having a drop-off service, and making your facility comfortable (such as with WI-FI, TV, beverages, etc.).
What are the key success factors for running a laundromat?
Successfully running a laundromat depends on many factors like the location, maintaining clean and well-functioning machines, providing good customer service, having amenities (such as air conditioning or head depending on the temperature, TVs, etc.), and more.
Are Laundromats Profitable? – Summary
I hope you enjoyed this article on whether buying a laundromat is a good investment or not.
Here’s a quick summary of what we learned above about this business venture:
Running a laundromat can be a way to make money, but it depends on many different factors.
Laundry businesses typically have low labor costs (they are fairly passive businesses with a lot amount of workers needed) and can be recession-proof.
Owning a laundromat does have cons and challenges, such as the fact that commercial laundry machines can be quite expensive if they need to be repaired or replaced.
There are many laundromats for sale and you can start your search online.
Running a successful laundromat business in today’s world will likely mean running a higher-quality business and selling amenities for additional fees.
In all, the profitability of owning a laundromat may make the challenges worth tackling. The average laundromat is changing and improving, and there can be room to make money with this small business.
So, what do you think? Are laundromats profitable? Are you interested in owning one?
Going to college is a lot of work. Between studying for exams, cranking out term papers, and keeping up on homework, there is a lot to stay on top of. For student athletes, there is even more to juggle. Their chosen sport is basically a full-time job ― and a physically-demanding one at that.
The good news is that, according to recent research, college athletes tend to have higher graduation rates than their peers. However, to make it to your college graduation, you’ve got to keep your grades up and find the time to study, which can be especially challenging during your freshman year.
Read on to learn some simple and effective strategies that can help you balance your responsibilities in the classroom and on the court, field, or wherever you play.
Planning Your Class Schedule Accordingly
Often, coaches will outline clear timeframes for practice and training that student athletes need to plan their class schedules around. Additionally, games and competitions are usually scheduled far enough in advance for student athletes to know which days of the week they’ll be traveling most often.
Still, there may be some discretion in choosing class times. Keeping in mind when you prefer to eat, sleep, and study is key to creating a schedule that will help you perform as a student and athlete.
Although many student athletes maintain an active training schedule throughout the year, the official NCAA season (or the majority of it) for many sports occurs during either the fall or spring semester. You may want to take advantage of a more flexible off-season schedule by taking more academically demanding classes and those that would otherwise conflict with their practice schedule. 💡 Quick Tip: Pay down your student loans faster with SoFi reward points you earn along the way.
Keeping Your Eye on the Prize
Student athletes invest countless hours in their chosen sport. Yet, the vast majority will graduate and pursue a career outside athletics. On average, just 2% of college student athletes move up to professional leagues after NCAA competition.
Academics are an integral part of being a successful student athlete. Choosing a degree program you’re passionate about and that supports your career goals can help keep you motivated and on track to graduate.
Each team and college may maintain its own standards for GPA requirements to compete, but the NCAA sets minimum requirements too. Division I and Division II athletes are required to meet initial eligibility criteria set by the NCAA while Division III student-athletes are held to the standards set by the schools they attend.
Just skating by in terms of GPA may allow you to compete, but it could hurt your candidacy for internships and jobs after graduation.
Recommended: 12 Ways a College Athlete Can Make Money
Building Relationships With Your Professors and Classmates
This advice could apply to any college student, but student athletes in particular stand to benefit from getting to know their professors and classmates early on in the semester.
To varying degrees, college sports teams travel off-campus for games and competitions, which means student athletes might miss some in-person class time. Meeting with professors at the beginning of the semester can show a commitment to your studies and help hash out any scheduling conflicts for classes and exams.
Also, making friends with classmates can be beneficial for exchanging class notes to cover each other’s absences, as well as forming study groups.
Finding an Accountability Buddy
Student athletes know the importance of teamwork. In addition to pushing each other to greatness at practice and the gym, teammates can be a support system to help achieve your academic goals too. Forging a partnership or study group to hold each other accountable to these goals, on and off the court or field, is one such strategy.
For starters, who can better relate to your experience and challenges balancing athletics and academics than a teammate? Together, you and your accountability buddy can capitalize on downtime on the road to away games to tackle assignments or plan a study night before a big game to resist the urge to party.
It’s okay if your goals are different. The important thing is that you find an accountability buddy you feel comfortable with and who will help keep you on track.
Recommended: 5 Ways to Start Preparing For College
Prioritizing Health and Wellness
Both academics and sports can be demanding, and taking them on simultaneously requires serious stamina. Prioritizing physical and mental health by eating well, getting enough sleep, and finding ways to destress can help prevent burnout and stay sane. It’s okay to slip up every now and then, but creating a plan that you can stick to could make a difference in succeeding as a student athlete.
Recommended: What Is College Like?
It’s Okay to Ask for Help
Many college students deal with stress between exams and assignments. For college student athletes, the pressure to succeed athletically and academically can be a lot to handle.
There is no shame in asking for help, and the sooner the better. College tutors can assist with everything from proofreading essays to prepping for a chemistry test. Approaching professors early with any concerns could also help with extra credit opportunities or a chance to redo an assignment.
Recommended: The Ultimate Guide to Studying in College
What About Redshirting?
For Division I athletes, the NCAA regulation grants college student athletes a span of five years to compete in four years of athletic competition. For Division II and Division III students there is a 10-semester, or 15-quarter clock. This means that student athletes may take a year off from competing ― a practice known as redshirting ― as long as they continue taking coursework and meet other eligibility requirements.
Traditionally, redshirting is applied to allow students athletes more time to develop or recover from a significant injury. However, student athletes may be able to use redshirting to their advantage in terms of coursework.
Redshirting may allow students to take a more manageable course load by stretching their degree over ten semesters instead of eight. Alternatively, it can provide extra time to complete both a bachelor’s and graduate degree in one go.
Keep in mind that redshirting guidelines vary by division. For instance, Division I and II athletes are permitted to practice with their team during their redshirt season, whereas Division III athletes may not. 💡 Quick Tip: Even if you don’t think you qualify for financial aid, you should fill out the FAFSA form. Many schools require it for merit-based scholarships, too. You can submit it as early as Oct. 1.
Paying for College
College is a big investment, but fortunately there are options for funding education. Financial aid, grants, work-study programs, and scholarships may be enough to pay for all or a portion of tuition and room and board.
Athletic Scholarships
There are some full-ride and partial athletic scholarships available to Division I and II student athletes. Athletics classified as headcount sports offer full ride scholarships to a certain number of athletes per team, whereas equivalency sports traditionally extend partial scholarships. Head count sports include the following:
For Men: • Division I basketball • Division I-A football
For Women: • Division I basketball • Division I tennis • Division I volleyball • Division I gymnastics
For equivalency sports, it’s up to the college and coaching staff to decide how to divide scholarship funds between student athletes.
Recommended: Finding Free Money for College
Student Loans
In the event that scholarships, grants, and financial aid are not enough to cover tuition and living expenses, student athletes can take out student loans to help them cover the difference.
Federal student loans may be subsidized, which means interest won’t start to accrue until six months after you graduate, or they may be unsubsidized, which means interest begins accruing right away. Either way, you don’t have to start making payments until six months after graduation. Federal loans come with a fixed interest rate set by the government and don’t require a credit check.
If those do not cover your costs, you may also consider private student loans.
Private student loans are available through private lenders, including banks, credit unions, and online lenders. Rates and terms vary, depending on the lender. These loans do require a credit check and, generally, borrowers (or cosigners) who have strong credit qualify for the lowest rates.
Keep in mind, though, that private loans may not offer the borrower protections — like income-based repayment plans and deferment — that automatically come with federal student loans.
If you’ve exhausted all federal student aid options, no-fee private student loans from SoFi can help you pay for school. The online application process is easy, and you can see rates and terms in just minutes. Repayment plans are flexible, so you can find an option that works for your financial plan and budget.
Cover up to 100% of school-certified costs including tuition, books, supplies, room and board, and transportation with a private student loan from SoFi.
SoFi Loan Products SoFi loans are originated by SoFi Bank, N.A., NMLS #696891 (Member FDIC). For additional product-specific legal and licensing information, see SoFi.com/legal. Equal Housing Lender.
SoFi Private Student Loans Please borrow responsibly. SoFi Private Student Loans are not a substitute for federal loans, grants, and work-study programs. You should exhaust all your federal student aid options before you consider any private loans, including ours. Read our FAQs.
SoFi Private Student Loans are subject to program terms and restrictions, and applicants must meet SoFi’s eligibility and underwriting requirements. See SoFi.com/eligibility-criteria for more information. To view payment examples, click here. SoFi reserves the right to modify eligibility criteria at any time. This information is subject to change.
External Websites: The information and analysis provided through hyperlinks to third-party websites, while believed to be accurate, cannot be guaranteed by SoFi. Links are provided for informational purposes and should not be viewed as an endorsement.
Financial Tips & Strategies: The tips provided on this website are of a general nature and do not take into account your specific objectives, financial situation, and needs. You should always consider their appropriateness given your own circumstances.
Financial considerations and interest rates are a key reason some homeowners are choosing to rent their homes rather than sell
A majority of homeowners would consider renting out their current home on a short-term basis rather than selling it in the current market.
That’s according to a survey released Thursday by Realtor.com and CensusWide, which included responses from 2,000 homeowners. They found that 60% of respondents would consider renting their current home versus selling if or when they decide to buy or rent a home somewhere else. The survey was conducted online in July 2023.
Some 23% of respondents had rented out their home before or planned to rent out part of their home out in the future. An additional 16% of respondents said they would consider doing that.
With the 30-year mortgage rate at over 7%, many homeowners are reluctant to sell. Short-term rentals are a way of earning extra cash and, for those who can afford it, of holding onto their home should they decide to move to a new place.
The company released the survey in conjunction with the launch of a new tool on Realtor.com that allows users to see estimates of short-term-rental income from Airbnb (ABNB).
Homeowners can look at potential earnings estimates for hosting their whole house or even one room. The estimated earnings for a seven-day rental are based on Airbnb data from similar listings in the same zip code, Realtor.com said.
Realtor.com is operated by News Corp (NWSA) subsidiary Move Inc., and MarketWatch is a unit of Dow Jones, also a subsidiary of News Corp.
Cities like New York are tightening short-term rental laws
Recent legislation may complicate homeowners’ plans to try their hand at short-term renting, however. In New York, a new ordinance that went into effect Sept. 5 requires all short-term-rental hosts to be registered with the city, live in the place they are renting, be present when renters are staying and have a maximum of two guests.
The new rules will likely eliminate many Airbnb listings in New York. Airbnb filed a lawsuit against the city in June, calling the rules a “de facto ban against short-term rentals in New York City,” per court documents. A judge dismissed the case in August.
Airbnb called the new rules “extreme and oppressive.” In a statement released to Associated Press, the company said the city’s new rules “appear intended to drive the short-term rental trade out of New York City once and for all.”
The total number of Airbnb listings in the city could fall by 70%, according to an estimate from Skift.
Other cities, including San Francisco and Seattle, have limits on how many properties one person may rent out on a short-term basis. In Los Angeles, hosts may only rent their primary residence on a short-term basis, and only for up to 120 days per calendar year.
Financial considerations for renting rather than selling
Financial considerations were a key reason homeowners told Realtor.com they would choose to rent out their homes instead of selling them, with 21% saying they would like to earn extra income from renting and 19% saying they would rather rent their home out in order to maintain the equity they had built.
And since many homeowners either purchased their home at an ultralow interest rate or refinanced to a very low rate, they might consider renting as an way to make money while holding on to that home.
Homeowners also had specific plans for that extra income: A third said they wanted to pursue the short-term rental route to earn extra income that they would save toward buying another home with a higher mortgage rate; 29% said they wanted to be prepared in the event that their adjustable-rate mortgage payments increased in the future; and 21% said they wanted the income to help pay for their current mortgage.
-Aarthi Swaminathan
This content was created by MarketWatch, which is operated by Dow Jones & Co. MarketWatch is published independently from Dow Jones Newswires and The Wall Street Journal.
Looking to land more real estate listings while leveraging your creativity? Today’s guest, Jordan Smith, has the perfect real estate niche for you: design. Jordan helps local investors find, fix, and flip properties and has closed over $17 million in volume to date thanks to his design expertise. Listen and learn how to package your unique talents for more real estate transactions.
Listen to today’s show and learn:
About Jordan Smith [0:44]
Why Jordan got his real estate license [2:24]
How Jordan learned about design, investing, and real estate repairs [4:20]
Why there’s no excuse not to master your craft [6:50]
Jordan’s first real estate deal [7:55]
The $5k design package for fix and flips [12:31]
Design considerations [17:35]
Time-saving tips for real estate redesigns [21:34]
Jordan’s latest listing [24:59]
Ways to find investor clients as a new real estate agent [27:26]
Why most people don’t flip properties [31:01]
Dialing in your deal flow [35:41]
The need for a comprehensive real estate company [41:30]
Jordan’s advice for real estate agents on niching down [44:43]
How to find what you love to do in real estate [46:14]
Where to find and follow Jordan Smith [47:56]
Jordan Smith
Jordan Smith is a real estate agent, investor, and designer who helps other people make money by turning ugly houses into pretty houses! As a licensed REALTOR® in both North & South Carolina, he helps investors find properties, renovate them using his signature “ballin’ on a budget” design, and sell them for maximum profits. When he is not doing something real estate related (and let’s be honest, even when he is doing something real estate related), you can find Jordan spending time with his hilarious wife Carmen and their three wild kiddos – Charlotte (8), Josiah (5), and Collins (2).
Related Links and Resources:
It might go without saying, but I’m going to say it anyway: We really value listeners like you. We’re constantly working to improve the show, so why not leave us a review? If you love the content and can’t stand the thought of missing the nuggets our Rockstar guests share every week, please subscribe; it’ll get you instant access to our latest episodes and is the best way to support your favorite real estate podcast. Have questions? Suggestions? Want to say hi? Shoot me a message via Twitter, Instagram, Facebook, or Email.
The investing information provided on this page is for educational purposes only. NerdWallet, Inc. does not offer advisory or brokerage services, nor does it recommend or advise investors to buy or sell particular stocks, securities or other investments.
Welcome to NerdWallet’s Smart Money podcast, where we answer your real-world money questions. In this episode:
We discuss some of the unique money challenges that millennials face, and how they can feel empowered to take charge of their financial wellness during tough times.
Check out this episode on your favorite podcast platform, including:
What makes millennials and their financial challenges unique? There are many misconceptions about millennials as a generation — but like the generations before them, their financial wellness (or lack thereof) has been shaped by major events beyond their control.
As millennials grew up and navigated early adulthood, they faced recessions, the COVID-19 pandemic, rising student loan debt and a soaring cost of living. The result for many is discontent and a strained relationship with money.
In the first episode of our nerdy deep dive into millennials and their money, Nerdwallet personal finance writer Tiffany Curtis and host Sean Pyles discuss a recent announcement from the Pew Research Center about changes to how it will study and report on generations. They also chat about the role of social media in our financial lives and if they still believe in the American dream.
Tiffany also talks with Angela Moore, certified financial planner and founder of Modern Money Education, a financial education firm. Angela considers herself an “honorary millennial” and works with a variety of people to help them build a strong financial foundation. They discuss historic and present-day factors that have created millennials’ shaky relationship with money and ways that they can take ownership of their finances. That includes working with a professional to address financial trauma and finances, getting clear on financial goals and establishing what happiness looks like for them individually.
NerdWallet stories related to this episode:
Episode transcript
Sean Pyles: If you are of a certain age, anywhere from your late 20s to your early 40s, you have no doubt found yourself at some point reduced to your generational status. You are a millennial. And while every generation has its benefits and burdens, some also bring a specific, shall we say, attitude to the table.
Angela Moore: I think that a lot of millennials are getting to the point where they do not care what their parents think, or anyone else for that matter, they want to focus on happiness. A big theme now is my job has to be fulfilling. My job has to make me happy. I have to enjoy what I’m doing to a certain extent, right? There has to be that balance to life and a lifestyle element to it.
Sean Pyles: Welcome to NerdWallet’s Smart Money Podcast. I’m Sean Pyles.
Tiffany Curtis: And I’m Tiffany Curtis.
Sean Pyles: This episode kicks off our Nerdy deep dive into millennials and money. We’re going to explore what makes millennials unique in how they make money, manage money and talk about money.
Tiffany Curtis: We’re also going to explore how millennials have opened the door to wider conversations about generational financial trauma, and how they’ve gone about defying expectations about what their financial lives are supposed to look like.
Sean Pyles: OK. So, Tiffany, I am going to ask you the question that I ask all of our guest Nerds for these special series. Why are we doing this exactly? You and I are both millennials, so I’m guessing that is part of it.
Tiffany Curtis: Yes, that’s definitely a part of it. I just turned 30.
Sean Pyles: Congrats.
Tiffany Curtis: Thank you. I wanted to do a special series on how we relate to money because there are a lot of myths about millennials and money. There’s a misconception that we’re simply bad with money, not working hard enough. It also feels like general financial advice and ideas about what financial wellness should look like don’t take into account all of the significant events that we’ve lived through, and how those events and generational trauma impact our relationship with money.
Sean Pyles: Yeah, absolutely. And one thing that’s really interesting to me is how the experiences we have at really formative times in our lives shape the way that we think about our own finances and the economy for years to come. Folks in Gen X and boomers also lived through things like the 2008 financial crisis and the COVID-19 pandemic, but by virtue of being in different places in their lives, they may have been shaped by these events in different ways than we millennials were.
Well, speaking of millennials, Tiffany, let’s talk about this generation that we are a part of and also the whole idea of generations. First of all, can you please give our dear listener a refresher on how millennials are defined?
Tiffany Curtis: Yes. So, they’re generally defined, as you mentioned at the top of the show, as people who are between 27 and 42 years old. So, they were born between 1981 and 1996, so their formative years happened during and around the millennium. Although if you were born in the early ’90s, you probably don’t remember how wild Y2K was.
Sean Pyles: Y2K is such a throwback. I was 9 when Y2K happened, or I guess didn’t happen. I spent New Year’s Eve at my grandmother’s house in small town Minnesota, and I remember being very bored, but also feeling like I was in a relatively safe spot in the event that every nuke in the world was detonated at once or something like that. We all thought that was maybe going to happen.
Well, I think we also do want to acknowledge some of the problems that arise when we divide people up into generations. Millennials are not really one monolith nor are boomers or people in Gen Z. And speaking of Gen Z, the boundaries between one generation and the next can feel a little bit arbitrary, and a lot of issues around money have nothing to do with whichever generation you’re in. Having a tense or strained relationship with money isn’t inherently unique to millennials.
Tiffany Curtis: That’s true, but I think you can make a case that there’s a collective discontentment in the millennial generation. And you can definitely argue that’s the first generation to grow up with the internet ingrained in our lives. That makes us different from say, Generation X. We’ve also witnessed growing economic disparity and insecurity, and we’re the first to stare down a life deeply affected by climate change. And I also think it’s fair to say this generation is disillusioned with the American dream. I think we more openly question who that dream is for and whether it’s something to still strive for.
Sean Pyles: Yeah, amen to that. When I talk about money and the future with many of my friends, who are predominantly millennials, many of them express a sense of despondence or that they feel like they’ll never get ahead financially. But I don’t want this to be too much of a bummer conversation.
So, Tiffany, let’s talk about what is good. You mentioned the influence of the internet, and I would argue that has been a force for both good and bad. On the good side, it has allowed us to have really important conversations openly, publicly about all of those factors that you mentioned.
Tiffany Curtis: Agree.
Sean Pyles: And technology itself has brought changes to our financial lives. For example, do you ever even go inside banks anymore or even like a real old-fashioned brick and mortar store? We do have the world at our literal fingertips from the comfort of our couches.
Tiffany Curtis: Agree. I do still go into banks too, though.
Sean Pyles: Well, that is your own prerogative and good for you because I have not set foot in a bank in a long time.
Tiffany Curtis: But I remember when we were first talking about this series, we ran across some interesting perspectives on this whole “call me by my generation” question, didn’t we?
Sean Pyles: We did, and I particularly want to cite the Pew Research Center, which issued an explainer this year that said it was going to change its approach to studying and reporting on generations. The biggest takeaway, I think, is that they’re going to analyze generations when they have historical data that allows that comparison at similar stages of life. So, for example, they would look at people in their 30s and 40s across time instead of by arbitrary generational designations, and that makes sense to me.
Tiffany Curtis: Me too. But for now, we’re kind of stuck with millennials as a generation, so let’s talk about them.
Sean Pyles: Yeah, might as well, right?
OK, well, listener. we want to hear what you think. To share your ideas, concerns, solutions around millennials and money, leave us a voicemail or text the Nerd hotline at 901-730-6373. That’s 901-730-NERD, or email a voice memo to [email protected].
So, Tiffany, who are we going to hear from today?
Tiffany Curtis: Well, we’re going to start today with Angela Moore. She’s a certified financial planner and founder of Modern Money Education, a financial education firm. She’s based in Florida and calls herself an honorary millennial.
Welcome, Angela. So, glad you could join us on Smart Money today.
Angela Moore: Thank you. I’m excited to be here.
Tiffany Curtis: So, let’s start with an overview of where millennials are in their financial lives right now. What stands out to you as someone who does financial planning with millennials?
Angela Moore: I think what stands out the most is that there’s just so many competing priorities because we’re kind of like a sandwich generation. Many of us have parents that are getting up there in age, close to retirement age, so there’s the need to potentially help them financially or help them plan for retirement, supplement their financial situation. And then, many of us are beginning or have children at this point, so there’s the need to plan for our children and their education and their everyday expenses and needs.
And then, we still have all these competing personal financial priorities, whether it’s our everyday bills or our student loans, purchasing a home or other goals, and there’s so much more to add in there. We don’t have the same type of retirement benefits that previous generations had, and housing prices and the cost of living in general has just skyrocketed.
Tiffany Curtis: What do you think are some specific events that have shaped this generation in terms of how we view the role of money and the attainment of it? I’m thinking about things like the 2008 financial crisis and of course the COVID pandemic. Can you talk about some of the ways that those events affected millennials’ finances?
Angela Moore: Absolutely. The pandemic hit millennials very hard. The Center for Retirement Research at Boston College said that millennials were more likely to be laid off during the pandemic. The Pew Research Center said millennials were hit harder by the COVID-19 pandemic.
And so, I think that’s just part of the story. The other part of it is that there was a study done by the National Institute on Retirement a while back that found that 66% of working millennials have nothing saved for retirement. I think one of the things that really hit home for a lot of millennials is that there’s no stability here and that this system is not really working for us. And I didn’t even mention the student loan situation. I mean, I’ve routinely seen clients that have $200, $300,000 of student loan debt. And so, I think that forces you to have to think outside the box and be creative.
If you’re a millennial and you’re seeing what’s stacked against you, it’s almost like, “OK. Well, how can I now separate myself from this situation and elevate? How can I transcend this situation?” It’s not necessarily because millennials want to be creative and want to do everything differently. And then, it’s almost like you’re getting judged for wanting to be different, you’re getting judged for not taking a traditional route.
One of the historic things that happened was our country did away with traditional retirement plans. Back in the day, a lot of U.S. workers had pension plans. And it became very expensive to maintain these types of traditional retirement accounts or pensions, and so a lot of companies began to move to 401(k)s and 403(b)s and kind of what we call contribution-type plans. And so what that did, it shifted the burden of saving for retirement from the employer to the employees. The traditional advice that older people got when they were younger, it doesn’t work for our generation. It’s not going to work.
Tiffany Curtis: So, what do you think is some of that traditional advice that isn’t working for millennials anymore?
Angela Moore: I think the traditional advice is, “Go to college. Get a job. Save your money. Balance your checkbook.” The standards hold true, but it’s not enough anymore.
For someone who’s just working an average job trying to save and trying to penny pinch and budget their way through their financial situation is not going to have enough money saved to live on all throughout retirement. If you do the math, if you look at, “Hey, let’s say I start working when I’m 20 and I retire when I’m 65. OK, that’s 45 years that I’ve worked.” But let’s say that I live to be 100 or 95, let’s say. That means that in the 40 years that I’ve worked, I need to have saved enough to live on another 30 years. And I’m supposed to be saving this money even with the high cost of living, the high cost of purchasing a house, the high cost of paying for education, the high cost of inflation. And on top of that, I’m also supposed to be navigating this tumultuous financial market, right? The investment market. It just doesn’t add up.
Tiffany Curtis: So, I’m wondering if you can talk about some of the misconceptions that other generations might have about millennials, especially our relationship with money and how we manage it. How do you think millennials are seen by the rest of society?
Angela Moore: I think a lot of society, in the past especially, has looked at millennials as lazy, they don’t want a job. I think those are the most common misconceptions I’ve heard.
But in working with mostly millennial clients, I have to differ with that. I think that millennials are some of the smartest clients I’ve ever had. They’re extremely resourceful. They’re extremely mature. It’s not all about money for millennials, a lot of it is about health and wellness and balance, and I think that that’s key.
I think a lot of millennials do have a sound mind and they are aware of the financial situation and concerned with it. I just think that it’s hard. It’s extremely complex. From a financial standpoint, I think that millennials have actually done an excellent job of being aware of their financial situation and taking steps to try to do the best that they can.
Tiffany Curtis: Where do you think they’re coming from, the misconceptions?
Angela Moore: A lot of older people are not aware of how much it costs to go to college now. You can easily spend $80,000 a year on college now. And there’s a lot of things that the older generations just were not exposed to.
Even finding a job. I mean, even me, when I graduated college, I graduated college in 2002, it was easy to find a job, but things are different now. Things are completely different. And even finding a livable wage, especially in some of these major cities — let’s say you’re earning $100,000, that’s not a lot of money in a lot of these urban cities, in these environments. It doesn’t go very far nowadays.
Tiffany Curtis: So, we talked about things that older generations may not have been exposed to. So, that makes me think of millennials and the internet and how we’re kind of the first generation to really grow up in the age of the internet, and this big boom with social media especially. Can you walk us through the effect that you think that’s had on how we view our finances? Do you think it’s helped or hindered us?
Angela Moore: I think both. I think on the one hand, it’s exposed us to so many different options, so many different career paths, so many opportunities that we wouldn’t have had if we didn’t have access to information.
But then on the other hand, there’s the whole social media aspect and the comparing ourselves, and everyone’s out here living their best life on a yacht in some tropical paradise or whatever. And it just makes you feel like you’re broke compared to everyone else. There’s a lot of influencer type of content out there. And it’s hard when you are putting your head down and you’re working and trying to earn income and trying to save and trying to just create something, and it just looks like everyone else is doing so much better than you.
It’s both helped us in a lot of ways by giving us opportunities and exposure to things, but then at the same time, it can be devastating in a lot of ways as well and overwhelming. And so, subconsciously, you’re holding yourself to that standard. It’s almost impossible for us to separate the two internally in our brains.
Tiffany Curtis: I feel like when it comes to social media and millennials and finances, it very much feels like it just kind of amplifies that feeling of the haves and the have-nots, which makes me think of wealth inequality. There’s a lot of research coming out about the wealth gap among millennials, especially racially, and the major difference in net worth between white millennials and black millennials and other millennials of color. And wealth inequality is a source of generational financial trauma. So, I’m wondering, what does generational financial trauma look like to you?
Angela Moore: I’ll tell you a quick story. When I first got in the industry as a financial advisor, I was working at a huge brokerage firm and we had cubicles. And there was a young woman sitting across from me, and she was on the phone with her attorney discussing her prenuptial agreement like it was nothing. Just casually discussing what she would like to have in the prenup and all these different things. And I thought to myself, “Wow, I’ve never heard anyone talk about this.”
And as I grew in this career, that’s something I saw, is that there are certain families that talk about wealth, they talk about estate planning, they talk about business, they talk about investments, they talk about all these things at the dinner table on a routine basis. And in a lot of black and brown communities especially, you could go your whole life and you’ve never had a conversation about those things.
We’re just not typically exposed. We’re not at the table. We’re not in the room. And obviously, I mean, we all know the history of this country, there are certain families that have had generational wealth that came all the way from slavery times. The same goes for poverty. There is poverty that has been passed down from generation to generation. It’s a poverty mindset. It’s lack of knowledge, even. It’s behavioral patterns and habits that have been passed down. You saw your parents doing it, so you’re doing it.
And it’s not just that, then there’s also obviously what kind of access to advice that you have. One of the things that really bothered me about my industry when I stepped back and thought about it later in my career was that most financial planning firms and brokerage firms, they cater to high-net-worth clients. And what that means is that they are looking for individuals that have at least a million dollars to invest with them. A lot of these companies don’t even have any services that will cater to you at all. And so it’s like, where do the rest of us go for financial advice?
But I do think that a lot of millennials, what’s great about this is that because of the resources that we have, like the internet for example, people are beginning to take these matters into their own hands and they’re educating themselves. They’re reading books. They’re finding people like me to help them. They’re listening to things like this. They are really trying to empower themselves, which we’ve always done, but there’s now this access to information that wasn’t really available before.
Tiffany Curtis: And speaking of empowerment, what kind of advice do you give to your clients about how to deal with generational financial trauma?
Angela Moore: I think that seeking professional help in terms of therapy is not talked about. There’s trauma, there’s mindset and hindering beliefs a lot of times. So, seeking therapy.
The other thing is associating yourself with like-minded people who are also trying to empower themselves. So, find a Facebook group or whatever it is of people who are trying to financially empower themselves.
And then lastly, find a professional to help you get your finances in order, whether that’s a financial coach, financial advisor, financial planner, an investment advisor, whatever. There’s a lot of different types of financial professionals out there that can help you. There’s even student loan specialists out there. So, there’s just a lot of help nowadays and resources.
Tiffany Curtis: You’ve touched on some resources already, but given everything that we’ve talked about that millennials are navigating when it comes to their financial lives, what are some steps that they can take toward financial wellness right now? Immediately, as soon as they’re done listening to this, what sort of things can they do?
Angela Moore: Yes. So, the first thing you can do is take ownership and get organized. You want to have clarity around your current financial situation.
So, the first step is write out a budget, write down all of your monthly expenses and also any debt that you owe, anything like that. List it all on a piece of paper or a spreadsheet or whatever, just so you can have clarity around that. And then, also, list out how much income are you bringing home every month, and then compare. How much is coming in versus how much is going out? That’s the very first step.
Once you’ve done that, you want to focus in on your goals. So, many people have no clue what they’re trying to accomplish when it comes to financial situations. You could maybe have some short-term goals, maybe some long-term goals.
But then the next step is aligning your budget with those goals, right? Every month money’s coming in. Are you allocating that money in a way that aligns with what you are trying to accomplish in your life? That is the key. If your money’s just coming in and going out to all these random places and it’s not intentional, you’re not being intentional about how you’re spending or where you’re putting your money, then that’s where chaos sinks in.
After that, I would say focusing in on eliminating debt, making sure you have an emergency fund saved, then reviewing your insurance, car insurance, really important, all the different types of insurance. Disability insurance, you should know what disability insurance is, and you need to make sure you have it because disability insurance is insuring your income. If something happens and you are disabled and can no longer work, how are you going to save for retirement? How are you going to buy a house? How are you going to do anything? So, you need to make sure that you’re insuring your income with disability insurance.
And then, another thing is estate planning. Everyone thinks that estate planning is only for wealthy people, but that’s not the case. All of us should do an estate plan because an estate plan says, “Hey, if I’m ever in the hospital, who do I want making medical decisions for me? Who do I want to have access to my finances to be able to pay my bills and make sure my business keeps flowing and all these different things?”
Tiffany Curtis: It makes me think about how millennials are or aren’t redefining what financial wellness feels and looks like for them. So, I’m wondering if you could talk through, what do you think that looks like? Do you think that we’re redefining financial wellness? If we are, how?
Angela Moore: Absolutely. I think that a lot of millennials are getting to the point where they do not care what their parents think, or anyone else for that matter, they want to focus on happiness. And so, a big theme now is, my job has to be fulfilling. My job has to make me happy. I have to enjoy what I’m doing to a certain extent, right? There has to be, like I mentioned earlier, that balance to life and a lifestyle element to it.
I think the other thing is that a lot of millennials are doing what I call thinking outside the box. They are creating their own realities. A lot of millennials are starting to create their own businesses. They are leaving corporate America. They are creating new, innovative ways to make money and create multiple streams of income.
And they’re realizing that they need to increase their income in order to achieve financial stability. And I also think, you know, challenging societal norms. A lot of millennials are not trying to buy a house, some are not trying to get married. People are really looking at, “What makes me happy and what can I do to live the life I want to live in the most authentic way possible, instead of what society expects of me?” And so, that’s something I see that is unique to millennials.
Tiffany Curtis: So, it sounds like the onus is on millennials a lot to come up with these creative solutions and figure out how to do things in a nontraditional way, because like you said, the system isn’t working for us. But if you could, how would you like to see the system better support millennials?
Angela Moore: Well, I think a lot of it is political, and I think we’re seeing that some leaders are trying to address issues. Obviously, there’s a whole lot of issues to be addressed, and so sometimes our particular issues don’t take precedence, but I think that they should. Because the baby boomer generation, which is our parents’ generation, they are aging. They’re retiring, going into Social Security. So, the onus falls on the current working class to fund Social Security for them and fund retirement for them. And because there’s not as many of us, there’s a strain on the system.
These are all major, major concerns. When you add it up and do the math, it’s not going to work out unless something changes. So, I think that hopefully as we become leaders and get into leadership, that we can help push forward change.
Tiffany Curtis: Angela Moore, thank you so much for helping us out today, and helping us kick off the series.
Angela Moore: The pleasure is all mine. Thank you.
Sean Pyles: I love how Angela talked about the importance of empowerment and community. You two discussed a number of big challenges that the millennial generation is facing: wealth inequality, generational trauma, a difficult housing market. And these issues are real and hard to navigate. But at the end of the day, we still do have agency, right? We can decide what to do with our finances and can work to better our situations, even if the broader economic and societal context is difficult.
Tiffany Curtis: We do have agency. We get to decide what our financial priorities are. And I think with open and honest conversations like these, we move a little bit closer to improving our relationship with money, while we continue to hope that systemic change is on the way.
Sean Pyles: Exactly. Hoping that systemic change is on the way and taking action to make that happen. So, Tiffany, Angela touched on this a bit, but I know in our next episode we’re going to dive even further into the idea of generational financial trauma.
Tiffany Curtis: Yeah, we’re going to talk with two guests who have spent a lot of time counseling and educating millennials on how generational trauma intersects with our finances and how we may not even realize that said trauma is at the root of our relationship with money.
Aja Evans: When we start talking about financial trauma, in general, I think that there is a conversation that assumes people were coming from a place of poverty. And yes, that is very, very true for a lot of people, but there are also people who were raised in middle class, upper middle class wealthy families who are dealing with generational traumas of their own with money.
Tiffany Curtis: For now, that’s all we have for this episode. Do you have a money question of your own? Turn to the Nerds and call or text us your questions at 901-730-6373. That’s 901-730-NERD. You can also email us [email protected]. Also visit nerdwallet.com/podcast for more info on this episode. And remember to follow, rate and review us wherever you’re getting this podcast.
Sean Pyles: This episode was produced by Tess Vigeland and Tiffany Curtis. I helped with editing. Liz Weston helped with fact-checking. Kaely Monahan mixed our audio. And a big thank you to the folks on the NerdWallet copy desk for all their help. Also, a special shout out to Kathy Hinson for all of her help on the series.
Tiffany Curtis: And here’s our brief disclaimer, we are not financial or investment advisors. This Nerdy info is provided for general educational and entertainment purposes and may not apply to your specific circumstances.
Sean Pyles: And with that said, until next time, turn to the Nerds.
College is an exciting time: You’re surrounded by new people, new opportunities, and a chance to dive into the next chapter of your academic career. But this transition also comes with different financial realities—and the need to develop new skills around spending and saving money.
Along with navigating your new campus and sharpening your study skills, there’s another key lesson to learn: how to create a college student budget. When done right, a budget can help you limit debt, build some savings, and accomplish your goals. Need to make sure you have enough for textbooks, rent, food—and some left over for a little fun? Want to spend a semester abroad? Creating a college student budget can help with these goals and more.
Whatever financial issue is giving you trouble, Katie Waters, CFP®, founder of a financial planning firm, has tips for how to set yourself up for success. Here’s how to get started.
Assess your income and expenses
As you begin building your college student budget, you first need to figure out how much money you have coming in and how much you have going out. You can use anything from a simple spreadsheet to a budgeting app to track your income and expenses.
How should students pay for monthly expenses? Start by writing down all the sources of after-tax money you get each month, Waters says. That includes money from a part-time job, financial aid, stipends, grants, loans, or a monthly allowance from your parents.
Next, figure out how much you’re spending each month. Waters recommends looking back at three months’ worth of your expenses. To do that, refer to your debit and/or credit card statements, plus any record of money sent through payment apps.
You should account for every dollar you’ve spent, Waters says, separating expenses into common categories such as:
Cell phone
Food
Entertainment (movies, fun with friends, streaming services)
Clothing
Internet
Transportation (airfare, bus tickets, car insurance, gas)
Tuition
Room and board or rent
Textbooks and school supplies
The point is to add up everything, Waters says. “We want a line item for it all.”
If you’ve gotten this far and you already realize that your expenses weigh in heavier than your income, consider ways you could start giving your income a leg up. Check out these tips to help you make money as a college student.
Create your college student budget
Making and following a college student budget is the best way to ensure you have enough money to pay for the things you need while still having some money left over for the things you want. Here’s how to budget as a college student:
1. Create your spending categories.
Your budget should contain categories for all your major spending groups. (Refer to the list of expenses you created when assessing your expenses.) Then decide how much you must spend for each and assign a dollar amount or percentage to that category.
2. Choose a type of budget.
There are different budgeting styles, and Waters notes that one might fit your specific situation better than another. You could try the 50/30/20 rule, which allocates 50% of your money toward needs (food, textbooks, tuition); 30% toward wants (entertainment, clothing); and 20% toward savings.
You can also go with the envelope system, which involves setting aside a limited amount of money for each spending category. Once you hit the limit in a given category by running through money in its envelope—whether literal or digital—you can’t spend any more in that category until the next budget period begins.
3. Optimize your budget regularly.
Once you’ve set a budget, keep track of it. If you’re consistently under or over, see if there are areas where you can save more or spend less. As your needs change, so should your budget.
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Prioritize essential expenses
Whichever kind of college student budget you choose, make sure necessities such as your tuition payment (if you’re paying for school yourself) or things like bus fare to get to your part-time job are covered. To make that easier, Waters says you can find ways to reduce your expenses, such as:
Renting, borrowing, or buying used textbooks
Buying snacks in bulk or cooking meals that are large enough that you’ll have leftovers
Asking for student discounts when shopping in person or looking for online discounts
Opening a cash back checking account or using a cash back rewards credit card to earn rewards1 for purchases you already make.
Focusing on what you must pay for first can help to lessen the debt you acquire, Waters says. Bonus: If you can do that, you’ll also reduce the amount of interest you’ll have to pay while in school or after you graduate.
Manage your fixed and variable expenses
Certain expenses, such as your cell phone or car insurance bill, typically stay the same every month. Those are fixed expenses. Variable expenses include costs that can change from month to month, like food, gas, or entertainment, depending on your behavior. Variable expenses can be tougher to budget for, but they can also provide more flexibility to your budget.
The envelope budget method can help you learn to budget more accurately for variable expenses when making a college student budget. For example, let’s say you spent $140 dining out in month one, $175 in month two, and $120 in month three. Take the average of the three—$145—and set that as your “dining out” monthly line item that you shouldn’t exceed.
“The biggest ‘don’t’ for college students is saying yes to everything,” according to Waters. Instead, it’s important to set limits. “Get to know your town and find ways to hang out that are free or low cost.”
Save for emergencies
College might not seem like a natural time to save money, especially if you’re not making much to begin with—but it can be done. And saving money will be a critical skill you can continue to use throughout your life.
Often, the easiest way to save is to make it automatic, Waters says. You can automate your savings by opening a savings account and setting up regular transfers from your checking to your savings account. You can choose how much is socked away based on a percentage of your income, as with the 50/30/20 rule, or you can set aside a chunk of your remaining balance at the end of each month.
It’s also important to try and build an emergency fund, even if it’s small, Waters says. An emergency fund is money you use for unexpected expenses—think paying to fix a flat tire, covering medical bills, or repairing a malfunctioning laptop. A good goal for the amount to save in an emergency fund is three to six months of your expenses. That might sound like a lot, but you can build your savings slowly over time.
Waters notes that a savings account or emergency fund is also a great place to stash cash you weren’t expecting to receive—like birthday money from Grandma. Think of it this way: If you save $25 a week, in just six months, you’ll have saved $600. This is also a great chance to learn how to invest as a college student. By keeping your savings or emergency fund money in a high-yield savings account, you can watch how your savings grows over time with interest.
Start building your financial foundation today
Once you’ve set a budget that you feel comfortable with, make sure to regularly check in with yourself about your spending. One trick that’s great for budgeting for college students is a financial checklist, which helps you look closely at your spending habits and whether your needs have changed. Earning more or less money, a change in your rent, or a tuition hike can make it necessary to reassess your budget and tweak as needed, Waters says.
College can be the perfect time to start your financial future off on the right foot. Things like building credit, saving for retirement, and creating a thriving savings account all come from making the right choices early—and regularly. Getting a handle on your finances in college with a college student budget is one of the best first steps you can take.
Creating a budget and learning to manage your finances as a college student can put you in a stronger financial position when you graduate. Here are some of the first steps you can take to ensure your long-term financial wellness.
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1 ATM transactions, the purchase of money orders or other cash equivalents, cash over portions of point-of-sale transactions, Peer-to-Peer (P2P) payments (such as Apple Pay Cash), online sports betting and internet gambling transactions, and loan payments or account funding made with your debit card are not eligible for cash back rewards. In addition, purchases made using third-party payment accounts (services such as Venmo® and PayPal®, who also provide P2P payments) may not be eligible for cash back rewards. Apple Pay® is a trademark of Apple Inc. Venmo and PayPal are registered trademarks of PayPal, Inc. Samsung Pay is a registered trademark of Samsung Electronics Co., Ltd. Google, Google Pay, and Android are trademarks of Google LLC.
We have a job opportunity to share from a member of the GEM, Unwritten Capital, an investment firm that plays at the intersection of real estate and technology
Real Estate Partner (job description):
About the firm
Unwritten Capital is an investment firm that plays at the intersection of real estate and technology.
Their team has decades of experience investing in and operating real estate, tech companies, and investment firms.
On the venture side, their portfolio includes 300+ real estate technology companies across geographies and property types. They’ve invested alongside the best in the business including Sequoia, Union Square Ventures, Accel, etc.
They are now investing capital into real estate investments supported by technology.
They are frequently the first institutional real estate capital into a business and invest across the capital stack.
Unwritten Capital has a purpose built team with unparalleled access to an underserved capital market
About the role
Unwritten Capital is looking for a partner to lead their real estate activities. You will have a seat at the table as we build our firm from the ground up. Their offices are in NYC and we spend several days a week there.
About you
10-15+ years of real estate asset level investing experience.
Led deals from cradle to grave and have invested across property types and geographies. Ideally you will have experience in niche strategies.
Expertise with complex joint-venture, co-GP and other nuanced investment structures.
Have the entrepreneurial “bug.” Our firm is a startup–same goes for the companies we partner with.
Play well with others. We are collaborative internally and externally.
Want to have fun. Yes, we want to make money and build a generational firm. We are going to have fun doing it.
About the opportunity
The largest asset class in the world is still horse-and-buggy-ing around operating the same as it has for the past 50 years.
The real estate industry is in the earliest stages of digital adoption.
Technological innovation initially came from startups that sell products and services to existing real estate companies.
It is now time to build new kinds of real estate companies with tech in their DNA.
In the process, these companies unlock new and novel real estate investment opportunities for everything from vacation rentals to construction financing.