I bought my first rental property in 2010 and I admit it was much easier to buy rentals that cash flowed back. At least it was easier in my area in Northern Colorado. A lot of people wish they could go back in time to buy investment properties (me included) but no one has invented a time machine yet. Wishing for the impossible will do you no good. Since we have to live in reality can you still make money in today’s market with rental properties?
Why is it harder to buy rental properties in 2024?
It is harder to invest in real estate in 2024 due to multiple factors.
Interest rates are much higher than they have been for decades. High-interest rates are making it tougher on everyone in real estate. The high rates make it harder to cash flow no matter what prices are. They also make it harder to refinance properties which can be a big part of investing in rentals.
Housing prices are higher than they have ever been. Now, in most markets housing prices will always be higher than they ever have been, that is how the economy and inflation works. However, prices are still high and that makes it tough to buy rentals that make money.
There is record low inventory in most areas of the country. When there are fewer homes for sale it makes it harder to find deals which is what most real estate investors are looking for.
Many areas of the country are enacting tenant-friendly laws that make it harder on landlords. Rent control, free attorneys for tenants, no-cause evictions are all making it harder on landlords.
There is a growing ideology claiming landlords are evil and hurting society because they raise prices and take housing away from owner-occupants.
It is important to know that even though these things make it harder for real estate investors trying to buy now, rising prices have made many existing real estate investors very rich. Landlords also help the housing market, they do not hurt it.
How do you make money with rentals in today’s market?
I hope I did not scare everyone off with the doom and gloom of the last section of this article. However, there are still ways to make money with real estate in today’s market. How do you make money with rentals?
High interst rates make it tougher to make money but they are coming down and they should continue to decrease over the next couple of years. Real estate investors have made money with higher rates for decades even if it is harder to do so.
Housing prices are higher but there are still good deals out there. There will always be good deals no matter how high prices are. The key to investing in real estate is getting a good deal whether you or flipping or buying rentals. Good deals can make up for all of the other issues.
While there are few houses for sale right now there are still houses and multifamilyl and commercial real estate for sale. Real estate investors also do not need to buy only properties that are for sale. There are also off-market deals that can be just as good or better than on-market deals.
There are a lot of areas that are enacting more laws against landlords. However, there are still many areas that are landlord-friendly and I made list of the best states for landlords here.
It may be tougher to invest in real estate now than ten years ago but it is still definitely possible to make money with rental properties.
What strategies can you use today to make money in real estate?
It might not work to buy a single-family house in Denver or Seattle or Miami as a rental anymore if you want it to cash flow. While it might not work in every city there are still many areas where you can make money with single-family homes. There are also different strategies you can use to make money with real estate.
Invest in different markets. Not every market will work for every real estate strategy. It is really hard to start out as an investor in an expensive market. There are many markets with affordable real estate and while it is not easy investing in a different market could be the route to take.
Being a landlord may not be the right move for you right now. It is possible to flip houses and make money in some markets when you can’t make money with rentals in those markets.
Switching to a different type of rental may help as well. I switched from single-family rentals to commerical real estate in 2016. I also added in some multifamily properties as well. They often cash flow better than single-family rentals in expensive markets.
If you cannot afford to invest in your market, finding a partner may be another way to make real estate work in your area. Many people love to have their money in real estate but do not have the time to find the right investments.
While it is not easy to invest in real estate right now, it is rarely easy. Even when I bought my first rental properties many people (including those in the industry and in my family) told me I was an idiot. They told me the market would keep crashing and real estate would never come back. It was also tougher to get loans back then and there were not nearly as many educational sources about real estate either. I learned most of my strategies from reading books, some that were decades old that I hoped would still hold true when I was investing.
Conclusion
There is no perfect time to invest. The only way to know when the timing is perfect is years or decades after that time occurred. Waiting rarely works out but luckily there are many ways to invest in real estate even if rentals won’t work for you in your market right now. If you want to learn more about investing in other markets I put together a very detailed webinar on the subject you can watch below.
When most people talk about money management, they discuss tactics. Occasionally, you’ll encounter someone who elevates the discussion to strategy, rather than simply scattershot tactics.
But what’s missing from both conversations — both tactics and strategy — is a wider-lens look at how to become a better thinker; how to become a crisp, clear decision-maker.
How to think from first principles. How to better your brain. How to cultivate the wisdom to know the next move.
This series is an attempt to bring first principles thinking into the conversation around money. Welcome to the inaugural post.
Welcome back to First Principles, my series with an alternate definition of FIRE — Financial Psychology, Investing, Real Estate and Entrepreneurship.
Today we’ll dive right in with the question on everyone’s mind: is a recession looming?
Financial Psychology
Are we in a recession?
Short answer: Possibly. I may even go as far as to say “probably.”
A recession is defined as two consecutive quarters of negative economic growth, as measured by GDP. (Notice that recessions reflect the state of the economy, not the stock market. We’ll come back to that in a moment.)
By definition, a recession is only visible in hindsight, after two negative-growth quarters have passed. This means it’s possible we’re already in a recession. It’s also possible that one may be looming.
Why now?
What’s behind this (potential) recession? In a word: inflation.
As I’m sure you know, the Federal Reserve has been raising interest rates. (There have already been 5 rate hikes so far in 2022!)
The Fed is tasked with a “dual mandate” to control both inflation and the risk of recession; this “dual mandate” exists because controlling inflation necessarily carries a recessionary risk.
But why?
To control inflation, the Fed must make money more expensive to access. When borrowing becomes more expensive, people and companies do less of it, which slows spending and growth. This could lead to a couple of consecutive negative-growth quarters, which is, by definition, a recession.
What does this mean for you?
Recessions vary along three dimensions:
(1) severity
(2) duration
(3) frequency
It’s tempting to think that a recession will impact us in the same ways as the Great Recession of 2008.
This is due to a few cognitive biases, including:
Recency bias — our tendency to overestimate that an event that occurred recently will re-occur again, or to assign greater importance to things that have happened most recently.
Salience bias — our tendency to focus on events and facts that are remarkable (the headline-grabbers), rather than events and facts that are mundane.
Availability bias — our tendency to think that examples that most easily come to mind are more important or significant than they actually are.
The Great Recession of 2008 was (1) recent; (2) remarkable; and (3) easy to recall.
Its remarkability and ease-of-recall stems from the fact that the Great Recession was both high-severity AND long-duration. It felt personal; millions lost their jobs and homes, which meant that this recession impacted us in the most visceral, tangible ways possible.
For all those reasons, it’s easy to assume that every recession will look, feel and behave similarly to the Great Recession.
But will it?
Let’s turn our attention to 2022, and look at the many factors that are different this time around, including:
(1) Unemployment is at a record low. Despite the occasional warning headline (e.g. Tesla will be reducing its salaried headcount by 10 percent), the unemployment rate remains 3.6 percent as of May 2022, according to the U.S. Bureau of Labor Statistics.
(2) Housing prices continue to rise, despite higher interest rates, due to imbalances in supply-demand fundamentals. The cost of materials (such as lumber) remains high, which increases construction costs and therefore home values.
(3) Consumer spending remains strong, particularly in discretionary areas such as travel and dining. Despite higher fuel prices, airlines are seeing strong demand for flights.
What does this mean?
We may or may not already be in a recession, or enter one in the near future.
But if we do, there’s a chance this might be experienced as an “on-paper” recession, in which the daily lives of the average middle-class worker isn’t strongly affected.
If unemployment remains low, consumer spending stays strong, and inflation gets roped into check, there’s a chance that this recession will be forgotten. It might be long-duration, but low-severity.
Of course, this is one of a range of possibilities, and as you know, I’m not in the business of prognostication.
But it’s worth making the point that we shouldn’t let our cognitive biases lead us astray. Don’t assume that the next recession will resemble the conditions of 2008.
SPOTLIGHT ON…
Have you been interested in real estate investing for years, sitting on the sidelines watching the market go up and wishing you’d gotten in sooner?
I have a secret for you: it’s not too late to find good deals.
Even though parts of the US market are crazy, there are still good deals to be found; you just have to know where to look.
Soon, enrollment for my flagship real estate investing course, Your First Rental Property, will open for the ONLY time this year.
Want to get notified when we open the doors? Join the VIP list.
Join the VIP list
Investing
Recessions reflect the economy, not the stock market.
Let’s return to the definition of a recession: two consecutive quarters of negative economic growth, as measured by GDP. This definition doesn’t directly relate to stock prices.
But investors react in varied ways.
There are two popular styles of investing: growth and value.
Growth investors tend to sell (or not buy) during recessions. When companies expect lower profits, growth investors are usually unwilling to pay a high price for a share of that company, so stocks can fall.
But this is counterbalanced by value investors who pick up shares of the ‘winners,’ the companies and stocks that they believe have been maligned by the market and that will emerge strong during the recovery.
Hence, the volatility.
So let’s zoom out and look at what’s happening now:
Everything (except real estate) is falling.
Stocks are volatile. Crypto is depressed. Bonds are unattractive.
And that’s not surprising, given the liquidity patterns of the past two years.
At the start of the pandemic, $10 trillion in liquidity got pumped into the monetary system. Investors used that liquidity to buy all types of assets — stocks, bonds, crypto, housing — triggering a massive spike in the value of all asset classes across the board. (It’s no surprise that “meme stocks” like GameStop and AMC Theaters became a thing at the exact moment when millions received “stimmy” checks.)
Two years ago, people were already asking the question, “what should I invest in when everything is expensive?”
Last year, that question only became louder and more pronounced.
It’s reasonable that today, as liquidity is getting removed from the system and capital becomes harder to access, the values of these assets will gyrate for awhile, then stabilize at a “new normal,” with valuations that reflect market fundamentals such as earnings and expectations.
What does that mean for you?
Expect that the rest of 2022, perhaps 2023, could be volatile. Stocks, crypto and bonds may swing for awhile as investors try to figure out the “new normal.”
But these types of events are how the market cleans itself.
The poorly-run companies run out of money and fold. Better companies take their place. And the broad market, over the long-term, reflects the growth of the winners.
Many fantastic companies started during the Great Recession; many new companies will be created during the next one.
Real Estate
We created a massive, multi-day email series to deep-dive into recession and inflation in 2022 — and specifically, to talk about how it could impact the housing market.
It’s waaayyyy too detailed to summarize into this post, so I’d suggest signing up to get this multi-day email series.
If you’re even thinking about buying real estate, either as an investor or as an owner-occupant, you’ll find a ton of value in this free email series.
Get the free email series
Entrepreneurship
One of the most interesting stats to watch in coming months relates to the unemployment rate.
Right now, many entrepreneurs are struggling to hire talent. The labor market is tight. Small businesses are having a tough time competing with the salary and benefits packages offered by major corporations.
Many real estate investors (which is a specific subset of entrepreneurship) have spent years lamenting how hard it is to hire contractors — because many contractors are booked, busy, and in high demand.
Given the record-low unemployment, that’s not surprising.
If the labor market loosens, it might become easier to hire. And that will be a blessing for small business owners and real estate investors who are trying to find top talent, especially 1099 contractor talent.
Again, this is why many great companies tend to be launched during recessions:
One of the best times to create a business is when skilled talent is looking for work.
Hope you enjoyed this issue of First Principles.
I’ll see you in the next issue. Until then!
Click here if you want future posts like this straight to your inbox with more thoughts, ideas and insights on a new take on FIRE.
Investing in real estate is some of the oldest and most reliable financial advice in the books. Few other assets can compete with real estate’s vast array of benefits. These benefits include tax advantages, appreciation, relative impunity to market shifts, and even the potential for passive income.
But even if you have every intention of investing in real estate, it can be challenging to get started. After all, even a modest home usually requires a substantial down payment. And it can take years to save up those five-figure sums. The term “real estate investor” may bring to mind a multi-millionaire who manages several properties, leaving you feeling overwhelmed enough to give up the ghost entirely.
Fortunately, it is possible to invest in real estate with little or no money, even if you aren’t swimming in discretionary income. For instance, with an Opportunity Fund or REIT (Real Estate Investment Trust) you can get your foot in the door even if you can’t afford to purchase an entire property. There are also a host of ways to leverage your own home. These include house hacking, renting vacation space on Airbnb, and more.
In this post, we’ll break down everything you need to know about how to invest in real estate. We’ll go over some of the most common types of real estate investing. We’ll also break down how they can help you make money. And we’ll explain how you can begin, no matter how much capital you have in hand.
Why Invest in Real Estate?
Before we dig into the meat of the post, let’s take a moment to backtrack. Why is real estate investing such a well-worn piece of financial advice?
You’ve probably heard that diversifying your portfolio of real estate investments is essential. But your “portfolio” doesn’t just have to live on the stock market! Real estate investing gives you, as the name suggests, a real, tangible asset. And it’s much less vulnerable to the capriciousness of the market.
Real estate investing can help you not only build home equity but also generate passive cash flow. Both through the process of appreciation and the more intentional, hands-on approaches we’ll study further below. And owning your own home can help you reap financial benefits while simultaneously providing for one of your most basic needs.
How to Invest in Real Estate with Little Money
When a down payment might cost as much as $60,000, it’s understandable that many first-time property shoppers feel overwhelmed. They say you have to spend money to make money. Yes, but that’s quite a hefty figure for the average American earner.
To be sure, some real estate investment strategies require a good deal of cash upfront to be workable. But there are other tactics that don’t necessitate such a large lump sum to begin with. This means you don’t have to be a real estate mogul to be a property owner. We’ll break down various strategies at both ends of the spectrum below.
Types of Real Estate Investing
Let’s get into the nitty-gritty. What types of real estate can you invest in?
There are three main types of investment properties available to real estate investors.
Residential properties are probably the ones you’re most familiar with. They are exactly what they sound like: buildings used by individuals and families as residential living spaces. These properties include single-family homes, duplexes, apartments, condominiums, and townhouses, and multi-family homes (so long as they’re being used residentially and don’t exceed four units).
Commercial real estate are properties used to conduct business. They may include offices, storefronts, retail spaces, farmland, and large multi-family houses or apartment buildings.
Industrial real estate are properties that serve industrial business purposes, such as factories, power plants, or storage and shipping warehouses.
Furthermore, there are both active and passive forms of real estate investing.
Active investing is, well, active. It requires a good deal of time, energy, and commitment from the investor. Active investing may become a part- or even full-time job for the investor. They usually share ownership with few (or no) other people and thus bears a lot of responsibility for the success of the investment.
Passive investing, on the other hand, allows the investor to reap the benefits of investing without taking on the pressure and responsibility of full ownership of a tangible property. In most cases, passive investing involves supplying capital to a larger investment pool. You earn capital gains on loan interest through dividends paid to shareholders.
We’ll go into it all of this in more detail, including specific ways you can invest in real estate, both active and passive.
How Real Estate Investing Can Help You Earn
Before we break down the specific ways you can get started investing in real estate, let’s talk about how it can help you make money. (After all, that’s the whole point!)
You can invest in real estate in several ways, depending on what type of investing you’re participating in.
Equity and appreciation
Purchasing real estate equips the owner with a “hard asset”; the tangible property or building. Owning this kind of asset confers equity, or value. It isn’t as vulnerable to the fluctuations of the market as stocks, bonds, and other securities. Furthermore, property has a longstanding history of increasing in value over time, or appreciating.
On the contrary, other types of purchases (like automobiles) depreciate, or lose value. Thus, purchasing a property may allow you to earn income passively simply through the process of appreciation. It more or less ensures that the cash value of your home is a safe and stable part of your overall net worth.
Rental income
Chances are, you’ve had to pay rent to a landlord at some point in your life. Well, if you become the landlord, someone’s paying you the rent. And as long as that rental price eclipses your total expenses, including your mortgage and maintenance costs, the rest is profit!
Aside from managing the investment property, you can also collect rental income by sharing your space on platforms like Airbnb or house hacking, which we’ll explain below.
Sale profit
This happens when you buy a home with the intention to fix it up and sell it down the line (also known as “house flipping”.) It’s the difference between your sale cost and your purchase cost (minus all the expenses put into maintenance and improvements) is pure profit.
Loan interest
The interest charged on home and property loans can increase the value of real estate investments made through REITs, investment platforms, and private equity firms.
Ways to Invest in Real Estate
Now we know a bit about the different types of properties available to investors and how those real estate investments stand to help you earn cash.
So, what are the specific ways to go about real estate investing? There are several in both the “active” and “passive” categories.
Active:
House flipping, or rehabbing, is when an investor purchases a property with the sole intent of fixing it up to sell it later on.
Wholesaling is similar to flipping houses, but less work intensive. Wholesaling occurs when an investor purchases a property they believe is underpriced, so they can quickly sell it to another investor at a profit.
Rental properties give investors a long-term way to draw profit from their investments, though they do require lots of hands-on management and maintenance over time.
Airbnb, Vrbo, and other vacation rentals can often be listed for substantial per-night prices. They can be especially lucrative in high-demand travel destinations.
Passive:
Private equity funds pool the assets of many investors, which creates a larger, more powerful investment fund. These funds are usually overseen and allocated by a dedicated manager. They may have high minimum investment thresholds and requirements to join.
Opportunity funds also pool investors’ assets, but with the specific purpose of making investments in qualified Opportunity Zones. These are low-income, up-and-coming communities that would benefit from private investments and economic development.
REITs are companies that invest in commercial properties. Private investors can purchase shares of the company and earn income on capital gains in the form of dividends.
Online REIT platforms can make real estate investing accessible to beginning investors, often carrying no net worth or accreditation restrictions. They may allow you to invest in specific properties or in pre-built, diversified portfolios of real estate.
We’re going to break down these different investment options in even more detail below. But first, let’s start a bit closer to home—literally.
Starting with Your Own Home
One of the most straightforward ways to invest in real estate is probably already on your financial to-do list, anyway: purchasing your own home.
Purchasing a home of your own allows you to kill two birds with one stone. You’re taking care of the basic need of shelter, while also leveraging the purchase to reap a host of financial benefits.
Here are just a few ways that owning a home can help you save and earn money.
Build equity: As discussed above, property ownership confers relatively immutable equity to the purchaser—that is, your home is a fairly safe, tangible asset to add to your overall investment portfolio.
Receive tax benefits: Certain homeowners’ expenses, including real estate taxes and home mortgage interest, are tax-deductible. And if you sell your home, you may exclude up to $250,000 of capital gains (or $500,000 if filing jointly) from your taxes.
Take advantage of appreciation: Even accounting for the 2008 crisis, the cost of homes and other properties have steadily increased over time for the past 50 years. So, the home you purchase today will likely be worth more than the price you paid for it in the future.
Stop paying rent: Although you’ll likely still have a mortgage payment and other expenses to cover as a homeowner, you won’t be paying rent to live in another person’s property. It’s a cost that is essentially entirely wasted, since you aren’t building home equity in the rental property.
Keep the value of your home improvements: When you own a home of your own, any improvements you make will add to the property’s total value, beefing up your asset as well as beautifying your living space.
House Hacking
Another way to make money by purchasing your own home is known as “house hacking“. It’s a real estate investment strategy wherein you leverage rental income from your primary residence to live there cost-free.
The term was originally coined by entrepreneur and author Brandon Turner, who wrote “The Book on Investing in Real Estate with No (and Low) Money Down” and “The Book on Rental Property Investing.”
House hacking may be done, for example, by purchasing a duplex. The investor rents out one unit at a price that covers the mortgage cost while living in the second unit. Some homeowners have also used space-share platforms like Airbnb to offset their housing costs in the same manner.
Real estate investors can use this strategy to pay off the property and even create a profit margin. This will eventually allow them to invest in more rental properties. Thus, house hacking is a great way to combine the personal financial benefits of homeownership with the long-term earning potential of other types of property investment.
Buying a Home Without a Huge Down Payment
Given the recent trends in the housing market, you may feel daunted by the prospect of becoming a homeowner. In 2023, the U.S. housing market experienced significant challenges, with home prices rising to near-record highs.
But there are many incentives and programs designed to make this large investment more feasible for first-time home buyers.
FHA (Federal Housing Administration) Loans may allow borrowers to purchase a home with a down payment as small as 3.5% of the purchase price and with credit scores as low as 580. (You may also be approved for an FHA loan with a lower credit score, but your minimum down payment may be higher.)
The USDA also offers low-cost loans to low- and moderate-income households purchasing homes in qualified rural areas.
Down Payment Assistance Programs offered by local governments and private firms can provide grants, loans, and educational materials to prospective home buyers
Many other financial institutions and organizations also have special incentives for those purchasing their first homes or low-income families in the housing market. Make sure you check with your local housing authority to learn more about what’s available in your area.
Active Investment Opportunities
Want to get hands-on? Here are the details on some of the most popular and accessible active real estate investment opportunities.
House Flipping
If you’ve ever watched more than thirty minutes of HGTV, chances are you’re at least passingly familiar with the idea of flipping houses. It’s basically where you purchase a home with the express intent of fixing it up and selling it (at a higher cost) later.
House flipping is a great way for investors to earn a significant profit. However, they do need to know how to complete the flip successfully without incurring too many costs. Expenses can quickly eat into the investment’s return.
Finding a Home to Flip
House flippers have to be able to recognize a home that may be slightly undervalued but would be able to sell well given the proper upgrades. This involves both an understanding of the area’s desirability and the types of improvements that generate increased home value.
House flippers are responsible for the entire cost of the home purchase. They must also pay for all the upgrades, which they may either do themselves or hire out to professionals.
Either way, flipping houses incurs a hefty up-front cost, and it does come at a risk. Even after you make all the improvements, it’s possible that the house will languish on the market.
This can mean racking up maintenance, taxes, and other expenses for the real estate investor. However, a properly executed, short-term flip can create a substantial profit margin in a relatively small period of time.
Wholesaling
Like house flippers, wholesalers purchase homes with the intent of selling them quickly. But, they aren’t planning to do any heavy lifting along the way.
Instead, wholesalers find properties that are undervalued for their market. They scoop them up and resell them to other investors at a price closer to their true value. Thus, earning the difference as a profit.
Rental Properties
While managing rental properties may seem like a straightforward and reliable way to earn income, it’s one of the most work-intensive approaches on this list. It does require enough up-front capital to purchase the property (or properties) in the first place. However, landlords do stand to see substantial and steady returns in exchange for the work and effort they put into their properties.
After purchasing a viable property, which needs to be well-maintained, in a desirable location, and well-advertised, landlords are responsible for filling that property with qualified tenants. This can involve a time-consuming and labor-intensive screening process.
After all, as a landlord, you’re giving your renters the keys to your investment—literally! It can be a very risky move if you don’t take the time to ensure your tenants are well-qualified.
Finding & Qualifying Tenants
Along with running a standard background check, landlords may also conduct interviews with and request credit reports from prospective renters, all of which takes time. And don’t forget: every month your rental property is unfilled is a waste of potential income.
Once you do find qualified tenants, you’ll be responsible for a host of obligations unless you hire a property management company. You’ll need to provide maintenance and repairs. You’ll also need to stay on top of rent collection and record-keeping. It can quickly become unwieldy once you have several properties.
You’ll also need to be sure you’re in compliance with all the renters’ rights that exist in your jurisdiction, including laws that regulate the eviction process. Of course, you’ll need to put in the work to find good renters and a well-maintained property in the first place. When done so, managing rentals can provide a smooth and steady source of income for relatively little active work.
Seller Financing
Want to buy an investment property with no money down? Look into seller financing or a land contract. This is where the seller acts as the bank. You make your mortgage payments, including interest, to the seller.
After a few years or so, you will have enough equity in the home to get a bank loan. You can then make a lump sum payment to the seller.
Private & Hard Money Lenders
Private money lenders generally charge between 6% to 12% on the money borrowed. Hard money lenders usually charge 10% to 18%. Hard money loans are not from banks. They are from individuals or businesses aimed at financing real estate investments for a return on their money.
Hard money loans are used by investors who don’t qualify for conventional financing. They are typically used to fund renovations. Once the house is finished or has some equity in it, the borrower then refinances to a conventional mortgage with a lower interest rate.
Airbnb, Vacation Rentals, and Space Sharing
Managing a traditional property, wherein renters sign a multi-month lease, is not the only way to make money from an investment property. Platforms like Airbnb have revolutionized the real estate market. They allow homeowners (and sometimes even renters) to make money by renting out their space on a temporary, per-night basis as a vacation rental.
What’s more, you don’t necessarily have to rent out an entire home or unit to participate. A private room, or even a couch in a shared living room, is acceptable for some travelers using these services.
Airbnb and other vacation rental platforms make it simple for a novice renter. You don’t need to have a huge amount of know-how to start earning money this way. In fact, you don’t even necessarily have to “invest” in any property at all. Some landlords may allow their renters to list their housing on Airbnb as a sublet.
Airbnb Laws
However, as this new form of investment property has expanded, it’s created housing crunches in some cities. It’s resulting in “Airbnb laws,” or short-term rental legislation. These laws may limit your ability to use your housing in this way.
Always check your local regulations before you list your space on Airbnb or another of these types of platforms. If you don’t own the space, ensure that short-term sublets are allowed. Check your lease or ask your landlord directly.
Real Estate Investing Groups and Passive Investing
You may have noticed that many of the active real estate investment opportunities listed above do require substantial upfront capital to get started. You can’t wholesale or flip a house if you can’t purchase the house in the first place!
Furthermore, these active strategies generally involve a high level of skill, effort, and responsibility. It may not be feasible for those committed to other full-time careers.
Fortunately, there are still other ways to get involved with real estate investing, even if you don’t want to own or manage tangible property. (Or if doing so is out of financial reach for you right now). These passive investment tactics can help you glean the benefits of real estate investing without taking on quite as much of a fiscal and physical burden.
Private Equity Funds
A private equity, or PE fund, pools contributions from various investors to make larger investments. They’re often limited liability partnerships. That means there are fixed periods during which investors do not have access to their holdings.
Instead, PE funds allow investors to earn gains on debt and equity assets passively, without putting in much active work or research. Asset allocation and investments are managed by a dedicated individual or group. They earn money through annual fees as well as profit sharing.
PE funds come in various types, including the following:
Core equity funds generally invest in established commercial properties. They don’t carry risks like needing major improvements or experiencing losses for lack of consumer demand. The core strategy is simultaneously the least risky among PE funds and, typically, the least gainful.
Core plus equity funds generally follow the core strategy, but take a few more risks on properties that may require minor upgrades. This leads to a higher risk-return ratio on average.
Value added equity funds may invest in commercial properties that require substantial upgrades or new management to operate at their full potential. They may also seek to sell the property after improvements are made to create an additional profit margin.
Opportunistic equity funds offer the highest potential rewards, along with the highest risk. Investment properties purchased via these funds may need new construction or even land acquisitions. The payoff of such a new business venture is all but guaranteed. Furthermore, these developments take time, which means your investment capital may be tied up for longer. However, when they pay off, opportunistic equity funds see some of the best returns of the bunch.
Although PE funds are powerful real estate investment engines, they do often have high minimum investment requirements, generally not less than $100,000. Some funds may also be limited to accredited or institutional investors who can demonstrate available means.
Opportunity Funds
Opportunity funds operate on a similar model to private equity funds but are specifically used to make investments in qualified Opportunity Zones. These are economically distressed areas designated by the state and certified by the Secretary of the U.S. Treasury. Opportunity funds are legally required to invest 90% of their assets into properties in these Opportunity Zones.
Because these areas tend to be up-and-coming (and because tax benefits can incentivize investors to support them), opportunity funds often see substantial capital gains for their investors. And taxes incurred on those gains can be deferred until December 26, 2026.
That means the longer the investment is held before that date, the lower your overall tax liability will be. And opportunity fund investments held for at least ten years prior can expect their capital returns to be permanently excluded from capital gains taxes.
Of course, this strategy requires parting with your investment capital for a significant period of time. It’s best for those who can afford to put down the money to play the long game. If you can, however, investing in one is a great way to see substantial returns for almost zero effort.
Real Estate Investment Trusts (REITs)
A real estate investment trust(REIT) is a company that invests in commercial properties. As an investor, you purchase shares of this company just as you would any other. You earn income through its debt and equity assets in the form of shareholder dividends.
REITs operate similarly to mutual funds. They provide an excellent way for the average earner to experience the benefits of real estate investing. You don’t have to have a huge amount of capital to get started, as minimum investment requirements may be quite low.
However, they may carry high investment fees, especially in the case of private REITs (i.e., those not publicly traded on the stock market). Fees at these companies may run as high as 15%. REITs may also be illiquid and keep your money locked up for longer periods of time.
Online Real Estate Investment Platforms
In this digital, all-sharing-all-the-time age, most of us have already heard of crowdfunding. Real estate investments are no exception to the rules of the new millennium.
Online real estate investment platforms have begun springing up. They can make real estate gains achievable for average investors who may not have the towering net worth or accreditation status necessary to buy into more formal funds. Depending on the specific company, you might be able to choose specific investment properties to fund or buy into a diversified portfolio of investments.
Fees and minimum investment requirements are relatively low on real estate crowdfunding platforms. For instance, Fundrise lets you get started with just $500. That is much less than you’d have to pay to get in on most types of active investments! Check out our full review of Fundrise here.
Ready to Get Started Investing in Real Estate?
As you can see, there are several ways to start investing without saving up a five- or six-figure sum. And if you do it right, your investments can actually help you reach those high savings goals. You can then fund other types of investment projects!
However, as with any financial objective, planning and strategizing is key. Saving up as much capital as possible will help you get the best return on your investment once you’re ready.
You can’t allocate your assets without first keeping track of them, and to achieve that, you need to create a budget. If you’re in debt, aggressively paying it off will free you of a weighty financial anchor, so check out these powerful debt relief options.
Finally, if you intend to purchase property either to live in or as an investment opportunity, your credit score matters. It’s as simple as that. If your credit score isn’t quite where you want it to be, take these steps to raise it. Doing so will allow you to get the best interest rate once you’re ready to make the big purchase.
Real estate option contract: advantages for sellers For sellers, real estate option contracts can secure a high-profit investment with relatively low risk. Let’s say, for instance, an investor chooses a plot of land as a prime location for further development for a shopping center or a subdivision. Instead of buying the land and selling it … [Read more…]
Mortgage rates began dropping steadily in the last months of 2023, down to 6.61% for a 30-year, fixed-rate loan in the last days of the year, according to data from Freddie Mac.
But 85% of American homeowners remain locked into pre-pandemic mortgage rates of 5% and lower, making them hesitant to sell their home only to purchase another when both home prices and interest rates remain elevated.
Mortgage experts, however, predict that the market may shift in 2024, although not as dramatically as some would hope.
“Mortgage rates will fall to about 6.6% by the end of 2024. The gradual decline in rates combined with the small dip in prices will bring homebuyers some much-needed relief,” Redfin Chief Economist Daryl Fairweather told USA Today.
Jeff Taylor, founder and managing director at Mphasis Digital Risk, agreed that 30-year fixed rates will stay will in the “mid-6%” range.
National Association of Realtors chief economist Lawrence Yun made a bold prediction regarding the market. “A marked turn can be expected as mortgage rates have plunged in recent weeks,” he said.
However, even with interest rates falling, the lack of single-family homes on the market may keep prices elevated.
“While single-family housing starts have steadily increased throughout 2023, it will take years of accelerated new home construction to narrow the supply shortage gap from more than a decade of underbuilding,” Odeta Kushi, Deputy Chief Economist at First American, told USA Today.
Further, with existing homeowners refusing to sell because interest rates won’t match what they secured pre-pandemic, the housing shortage is destined to continue through 2024.
The rising costs of home insurance is also deterring new homebuyers, according to a recent Newsweek article. Real estate investors told the publication that it may be harder to get a mortgage in states like Florida, which is prone to extreme weather such as hurricanes, floods and tornadoes. If you can’t insure a home, you can’t secure a mortgage for its purchase. Current homeowners may experience rate hikes, too, but once a home is insured, it’s easier to maintain a policy than to write a new one.
California, Louisiana, Texas and Colorado also experienced rate hikes in 2023, as previously reported by GoBankingRates. Other states may be susceptible to future rate hikes, according to HUB Private Client research. These states include Minnesota, Missouri, Indiana and South Dakota, which is alarming as they were not previously considered areas at high-risk of weather-related claims.
But even with rising costs, 2024 could be the first year the U.S. sees an uptick in new home construction, as predicted by Robert Dietz, Chief Economist for the National Association of Home Builders.
“Due to low existing inventory, new construction has increased to approximately one-third of total single-family inventory in recent months when historically it was only 10% to 15%,” he said.
After declines in 2022 and 2023, the increase in new construction could help alleviate some of the housing shortage. But even an increased inventory of new homes won’t make a significant difference in the housing market for 2024. “Home prices keep marching higher,” Yun told USA Today. “Only a dramatic rise in supply will dampen price appreciation.
A condo is a privately owned unit in a community of other units, often with shared areas or amenities. If you’re considering whether to buy or rent a condo, you’ll want to think about the costs, benefits, and responsibilities of each option.
Of course, those who are deciding whether or not to rent have much less riding on their choice, but it’s still worth delving into the pros and cons of this kind of property and if it suits your needs.
Here, you’ll learn about the characteristics that define condos, the pros and cons of these units, and what it’s like to rent or buy a condo.
What Is a Condo?
As noted above, a condo is a privately owned unit that is part of a community of other units, whether that means there are a couple of other residences or dozens. Typically, a condo owner only possesses their unit, unlike the situation with a single-family homeowner, who owns the home and the land under it.
You may be familiar with condos that are rented out for income. If you’ve ever rented an apartment in, say, a complex by the beach, with a shared pool and patio, there’s a chance you’ve been in a condo. Real estate investors often buy condos and rent them out in this way. 💡 Quick Tip: You deserve a more zen mortgage. Look for a mortgage lender who’s dedicated to closing your loan on time.
Characteristics of a Condo
Individual condo units are owned by private owners, while common areas are owned and maintained by an association or organization. This might be called a condo association (CA) or a homeowners association (HOA). These groups are not identical, but they do manage a multi-unit residential community.
Your ownership rights may be limited to the space within your condominium, as is the case with most condo high-rises, or you may own an entire standalone structure within a larger community. In a condo situation, the CA or HOA owns the land. In a planned unit development, the homeowners own their lot and share the common area.
Maintenance and Finances of Condos
Condos are popular starter homes, thanks to their low maintenance, relatively cheap purchase price, and general convenience. They may also appeal to investors and people who are downsizing.
With detached single-family homes, you’re on the hook for the bill if any repair issues arise, whether it’s a broken water heater, leaky roof, or malfunctioning air conditioner. This generally isn’t the case with condos, as the property management company employed by the CA or HOA maintains common areas and shared amenities.
Convenience comes with a price, though. Condo owners share maintenance costs, and the expense of a master insurance policy, by paying dues monthly or quarterly. It’s important to budget for these costs. HOA fees,for example, have recently been rising 10% per year. Atop those fees, special assessments can be levied if the HOA needs to pay for a major project.
Condos tend to appreciate at a slower rate than traditional single-family homes, but they cost less. So buyers may want to take both realities into consideration when deciding on house vs. condo.
Recommended: First-Time Homebuyers Guide
Types of Condos
Condos vary widely in structure and appearance, ranging from high-rise buildings to communal developments. Take a closer look:
Condo Developments
These are communities of standalone homes where maintenance of both the interior and exterior are carried by the condo owner, but services like the maintenance of common areas and snow removal are typically handled by a property management company.
All properties within a condo development are bound by the rules of the CA or HOA, so it’s similar to a traditional neighborhood with fixed rules and less upkeep.
Condo Buildings
These are high-rise apartments consisting of individual condo units. The maintenance of the structure, shared utilities, and common areas are the responsibility of the property management company.
If you’re looking at buying or renting an apartment in a large metropolitan area, make sure you understand what it means to choose between a condo and a co-op.
High-rise condo buildings are more common in urban areas and may have higher fees in order to cover the greater costs of maintaining an apartment building and often the salaries of full-time maintenance staff members and doormen.
Pros and Cons of Condos
Next, take a look at the pros and cons of a condo.
Pros of Condos
Here are the upsides of condo life:
• Less maintenance since the CA or HOA is responsible for many aspects of upkeep.
• Affordability. Since you don’t own the land, the price can be lower.
• Possible investment opportunity; can use a condo for rental income.
• Security. Some people appreciate having a condo staff and neighbors nearby.
• Social life. You’re part of a community and will likely know and connect with your neighbors to some extent.
• Amenities. There are often such features as gyms, pools, dog run, coworking space, party rooms, and other perks to enjoy.
Cons of Condos
Next, consider the potential downsides of a condo:
• Association rules. You have to adhere to the guidelines of the community, which may or may not suit you. This can include everything from the appearance of your home’s exterior to when and for how long you may rent your place out.
• Higher interest rates. If you are shopping for a condo to purchase, you may find that the mortgage rates are somewhat higher than what you’d be quoted if you were buying a single-family home.
• Investment risk factor. If you are buying a condo, its value could depend to some extent on other residents and how well they maintain their property.
• Lack of privacy and land. You will have neighbors…so the experience is different from being in your own single-family home on your own land. And you likely won’t have acres of property to plant and use as you wish.
• Rising costs. Your association payments can rise considerably, and assessments are possible as well. That can throw a wrench in your budget.
Recommended: Most Affordable Places to Live in the US
Buying or Renting a Condo: Which Is Better?
Whether you’re better off buying or renting a condo — or any of the other types of houses, from modular home to manufactured home, tiny house to townhouse — depends as much as your own circumstances as it does the cost of buying vs. renting in an area.
• Buying: Assuming you’ve decided to settle down in an area for the next three to five years, you might be better off buying a condo if you have a stable income stream and can cover the down payment and closing costs without emptying your emergency fund.
Given how real estate values have risen in the past few years, buying a condo may be a good choice if you’re looking for long-term investment and a chance to build home equity over time.
• Renting: You may be better off renting if there’s a chance you’ll need to relocate within the next few years, or if any upcoming life events might require you to upsize your residence, like having children.
Here’s a closer look at these scenarios.
Pros of Renting a Condo
Renting a condo gives you all of the benefits of living in a private condo unit without the long-term commitment and upfront costs.
• Few maintenance responsibilities: If you’re renting a condo unit in an apartment building, the association is responsible for maintenance, or in the case of an individually owned HVAC system, the owner is.
• More leeway for negotiation: Reliable renters are hard to come by; some condo owners may be more willing to negotiate your monthly rent than professional property managers are.
• Flexibility to end or extend your lease: As a renter, you can often decide whether to end or continue your lease. This makes it easy to cut ties if needed.
Pros of Buying a Condo
Taking out a mortgage to buy a condo more or less freezes your living costs into the future. This will help you avoid rising rents, though association fees can certainly rise.
• More affordable than single-family homes: The price of a condo is usually lower than a single-family home in a given area. This makes it attractive to homebuyers on a budget.
• Freedom to make it your own: Owning a condo gives you more freedom over such features as the appliances and color palette than you’d likely have with a rental.
• Rental potential: Depending on the rules of your association, you may have the right to rent out your condo to generate income.
Finding a Condo
If you’re ready to go out and shop for a condo, you’ll want to assemble a list of must-haves to narrow your search. This applies whether you’re looking to rent or buy.
Are you looking for a more affordable apartment condo or something with more space like a community development? Browse local listings for condo units that match your requirements.
For those seeking to buy a condo, it’s a good idea to find a real estate agent who’s well versed in condo sales. They know the area and can obtain vital info regarding association rules and financials. It’s important to review the rules and fees, and check for any special assessments and their frequency over the years.
Condo Tips
A few more suggestions as you start your hunt:
• If you are planning to buy, it’s also a good idea to thoroughly understand mortgage basics and have financing lined up with a mortgage company so you’re ready to make a bid on a property.
• Know your budget. A mortgage calculator is an excellent tool for helping you figure out your costs.
• Consider checking this HUD site for FHA-approved condos as your primary residence if you are seeking financing with an FHA loan.
💡 Quick Tip: Keep in mind that FHA home loans are available for your primary residence only. Investment properties and vacation homes are not eligible.1
The Takeaway
What is a condo? A condo is a privately owned unit within a community that can be a good starter home or a place to downsize. Or it might be a wise investment property that can bring in rental income. If you’re able to rent a condo, it’s much like renting an apartment, except your landlord may be the owner.
If you’re interested in buying a condo, realize that condo buyers are able to access the same kinds of loans available to buyers of single-family homes, though rates may be slightly higher.
Looking for an affordable option for a home mortgage loan? SoFi can help: We offer low down payments (as little as 3% – 5%*) with our competitive and flexible home mortgage loans. Plus, applying is extra convenient: It’s online, with access to one-on-one help.
SoFi Mortgages: simple, smart, and so affordable.
FAQ
What’s the difference between an apartment and a condo?
A condo can be a kind of apartment, which is a residential unit that’s part of a larger building. An apartment can be owned or rented, as can a condo. However, a condo is a specific kind of unit ownership in which there are communal facilities and shared maintenance charges.
What is the difference between a condo and a townhouse?
With a condo, you own your unit but not the land under and around it. You pay for your unit (rent or mortgage). Association charges cover maintenance and repairs, and property taxes apply to owners. With a townhouse, the property includes the residence and the land it sits on and that surrounds it. You will pay your rent or mortgage and real estate taxes, but may not be part of an association or obligated to pay those fees.
Is a condo the same as a flat?
Many people use the terms condo, apartment, and flat interchangeably. While an apartment and a flat are the same thing, a condo refers to a style of ownership of a dwelling unit that’s part of a community. It may be an apartment, but the way it’s bought or rented can differ.
Photo Credit: iStock/Edwin Tan
*SoFi requires Private Mortgage Insurance (PMI) for conforming home loans with a loan-to-value (LTV) ratio greater than 80%. As little as 3% down payments are for qualifying first-time homebuyers only. 5% minimum applies to other borrowers. Other loan types may require different fees or insurance (e.g., VA funding fee, FHA Mortgage Insurance Premiums, etc.). Loan requirements may vary depending on your down payment amount, and minimum down payment varies by loan type.
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 Mortgages Terms, conditions, and state restrictions apply. Not all products are available in all states. See SoFi.com/eligibility for more information.
¹FHA loans are subject to unique terms and conditions established by FHA and SoFi. Ask your SoFi loan officer for details about eligibility, documentation, and other requirements. FHA loans require an Upfront Mortgage Insurance Premium (UFMIP), which may be financed or paid at closing, in addition to monthly Mortgage Insurance Premiums (MIP). Maximum loan amounts vary by county. The minimum FHA mortgage down payment is 3.5% for those who qualify financially for a primary purchase. SoFi is not affiliated with any government agency.
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.
Tax Information: This article provides general background information only and is not intended to serve as legal or tax advice or as a substitute for legal counsel. You should consult your own attorney and/or tax advisor if you have a question requiring legal or tax advice.
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.
Besides the high level of investor transactions and the growing appeal of non-QM, changing demographics also boded well for Deephaven, Davis suggested. In describing the scene, he ticked off an impressive array of statistics from memory. “In the United States, there’s close to 20 million people that are self-employed – a testament to a very … [Read more…]
Editor’s note: In June 2014, the Consumer Financial Protection Bureau (CFPB) took enforcement action against Truist for unlawful and deceptive practices. Truist was ordered to pay at least $500 million to underwater borrowers, provide $40 million to victims of foreclosure, pay a penalty to the Department of Justice and establish homeowner protections to prevent further violations. Because of this, we can’t currently recommend Truist as a lender.
Truist offers several options for mortgage purchase and refinance loans, including doctor loans for qualified physicians and dentists. If you’re thinking about applying for a mortgage from Truist, here’s what you should know first.
Truist
Blueprint Rating
Truist overview
Truist has roots that date back to 1872, when the Branch Banking and Trust Company (BB&T) was founded. In 2019, BB&T merged with SunTrust Banks to form the Truist Financial Corporation.
Unfortunately, in its short time as Truist, the company has garnered thousands of poor reviews from customers. The company is accredited with the Better Business Bureau (BBB) and has an A+ BBB rating. However, as of Dec. 12, 2023, the company has a BBB star rating of just 1.09 out of 5.0, based on over 2,300 customer reviews. Customers complained about having trouble contacting customer service and others complained about fraudulent activities within their account. Truist seems to send an automated reply to these reviews, telling them to contact the company directly.
As of Dec. 12, 2023, Truist has also earned a star rating of 1.2 out of 5.0 stars on Trustpilot, based on 1,300 reviews.
How to qualify for a Truist mortgage
Truist offers a variety of mortgage loans, each with its own requirements. Here’s how to put yourself in the best standing to qualify for a Truist mortgage.
How to apply for a Truist mortgage
Compare lenders and get pre-qualified. Before you apply, be sure to compare as many mortgage lenders as possible, including Truist, to find the right loan for your needs. Consider interest rates, repayment terms, eligibility requirements and other factors as you weigh your choices. Truist as well as many other lenders allow you to pre-qualify with only a soft credit check that won’t affect your credit score — this will give you an idea of how much you can borrow and help you set a budget.
Pick a lender and apply. If you choose to go forward with Truist, you can start the formal application process online, by phone or in person at a local Truist branch. Speak with a loan officer to complete the application and determine the right type of mortgage for you. Be prepared to provide required documents, such as proof of income, assets, identification and previous tax statements. Work with the bank to answer any questions and document requests in a timely manner to avoid delays.
Close on the loan. The loan approval process with Truist typically takes about 30 to 60 days. If you’re approved, your loan will be scheduled to close. On closing day, you’ll sign paperwork and pay the closing costs, after which you’ll get the key to your new home.
Pros of a Truist mortgage
Offers doctor loans to medical and dental professionals.
Offers construction-to-permanent loans.
Can apply online, over the phone or in person in some areas.
Cons of a Truist mortgage
Doesn’t offer mortgages backed by the U.S. Department of Agriculture (USDA).
Poor customer service reviews.
Only available in 15 states and Washington, D.C.
Truist perks and special features
Savings and discounts
Like many other lenders, Truist offers you the option to buy mortgage points. These will permanently lower the interest rate on your loan for an upfront fee. If you intend to stay in the home for the length of the loan, mortgage points can save you thousands of dollars on interest payments.
Offers doctor loans
If you’re a medical doctor or dentist, a doctor loan could be a good option. These loans aren’t offered by many lenders. But with Truist’s doctor loan, qualified physicians and dentists can get a more favorable interest rate and make a lower or no down payment, even if they have student loans.
Offers construction-to-permanent loans
Another loan type that Truist offers that a lot of other mortgage lenders don’t is a construction-to-permanent loan. If you’re building a home, you can get one loan that funds the construction. Once the construction is complete, this loan will roll over into a traditional mortgage.
With Truist’s construction-to-permanent loan, you’ll make interest-only payments during construction and have only one set of closing costs for the land, construction and mortgage. Plus, there are no penalties for prepayment, so you don’t have to worry about being charged if you pay the mortgage off early.
Multiple ways to apply
Truist offers you the ability to apply over the phone, online or in person. With so many people turning to online mortgage applications, the fact that Truist offers physical locations can be an asset if you prefer to apply for a mortgage in person. Buying a home is a big decision and having someone to talk to face-to-face can be helpful.
How Truist could improve
Offer USDA loans
For much of rural America, a USDA loan increases their ability to own a home. These government-backed loans are for low-income families buying a home in specific rural areas. Truist, however, doesn’t offer these loans, which limits options for those who don’t live in cities. If Truist wants to improve its offerings, one way could be to provide a USDA loan option.
Improve customer service
Just browsing sites like BBB and Trustpilot can leave you with the impression that Truist isn’t well-regarded. There are a lot of negative reviews, complaining about a variety of things. These include the bank’s slowness in responding to deposits, improper handling of accounts and multiple accounts being hacked. Customers complain that they often are required to visit branches in person to resolve these issues, which is a problem when there are limited hours.
Expand availability
Truist is only available in 15 states and Washington, D.C. Its locations are mostly in the South and eastern parts of the country. Truist’s mortgages could reach more people if it expanded its availability to additional areas.
While Truist’s roots lie in operating as a traditional brick-and-mortar bank, it could make its mortgages available to a wider part of the country while maintaining its current in-person branches.
Truist customer service and reviews
There are multiple ways to contact Truist. You can visit a branch in person, connect on social media or call. You can talk to someone Monday through Friday, 8 a.m. to 8 p.m. Eastern Time (ET) and 8 a.m. to 5 p.m. ET on Saturdays. After hours, there’s 24-hour automated assistance.
The company also offers a mobile app, which lets you view your accounts, make payments and more. The app has a rating of 4.7 out of 5.0 stars on both the App Store and the Google Play store as of Dec. 12, 2023. However, many recent reviews note that the app has suffered since the merger to form Truist, with customers citing that recent versions are slow and unstable.
Customer reviews
Truist has received many negative reviews from customers on sites like BBB and Trustpilot. Some trends among these reviews state that the company is difficult to contact, accounts are often locked and promotions the company runs are misleading.
As of Dec. 12, 2023, these reviews have resulted in a BBB customer rating of 1.09 out of 5.0 stars and a Trustpilot rating of 1.2 out of 5.0 stars.
CFPB action
In 2014, SunTrust (a predecessor of Truist), was required by the CFPB to pay customers $540 million due to wrongfully servicing their loans. The company was also required to pay a penalty of $418 million to the Department of Justice. These institutions found that SunTrust was illegally foreclosing on homes by denying loan modifications, deceiving homeowners and charging unauthorized fees.
Truist alternatives: Truist vs. Bank of America vs. Chase
It’s important to consider a wide variety of mortgage lenders before applying for a loan. Two competitors to consider in addition to Truist include Bank of America and Chase.
Bank of America is a multinational financial company with ties back to 1784, when its predecessor, the Massachusetts Bank, was founded. As of 2021, it holds over $3.17 trillion in total assets and operates worldwide.
Chase Bank is a subsidiary of the holding company JPMorgan Chase & Co. Its history dates back to 1799 when its predecessor was founded as The Manhattan Company. As of 2021, JPMorgan Chase & Co. held over $3.7 trillion in total assets, making it the largest financial institution in the country.
While Truist is a big bank with a lot of history, both Bank of America and Chase are much larger than Truist. Mortgages are small parts of their businesses. With either of these banks, you might have more financing options. However, with a place like Truist, you could have a more personalized experience. While Truist is only available in 15 states and Washington D.C., that can be a positive as chances are higher that a Truist loan officer would be more familiar with state laws and assistance programs.
Frequently asked questions (FAQs)
The exact credit score you’ll need to get a Truist mortgage depends on the type of loan you choose. You must have a minimum credit score of 620 to qualify for FHA, VA and conventional mortgages. For jumbo loans, you’ll need a score of at least 680.
Truist mortgages are available in 15 states plus Washington, D.C. These states include:
Alabama
Florida
Georgia
Indiana
Kentucky
Maryland
New Jersey
North Carolina
Ohio
Pennsylvania
South Carolina
Tennessee
Texas
Virginia
West Virginia
Single-family homes, condominiums and some multi-unit properties are all eligible properties for personal mortgages. Truist also offers loans for real estate investors.
Truist is one of the 10 largest banks in the U.S. You don’t get that without repeat customers. Still, the recent merger of BB&T and SunTrust has caused hiccups with client accounts. Also, in 2014, SunTrust the CFPB required SunTrust to pay customers $540 million in relief due to wrongfully servicing their loans.
The housing and rental markets in Orlando reflect the ever-changing landscape of living in this popular city known for its massive tourist attractions, many pristine lakes and an undeniably strong economy. The following insights, derived from Rent. and Redfin, provide a comprehensive view of the Orlando housing market for anyone interested in entering the scene.
Rental market in Orlando
The rental market in Orlando has seen significant fluctuations. As of 2023, the average rent for apartments in Orlando ranges between $1,669 and $2,060, with studio apartments averaging $1,717. The rates vary for one-bedroom and two-bedroom apartments, standing at $1,669 and $2,060, respectively. In nearby areas like Celebration and Kissimmee, the average rent for one-bedroom apartments is around $1,594 and $1,595.
Housing market in Orlando
The housing market in Orlando is notably active and competitive. Houses often receive multiple offers, with many selling for around 3% above the list price. The median sale price for homes in Orlando is approximately $327,500, marking a 14.9% increase from the previous year. This rapid pace indicates a strong demand, with homes selling in about 12 days on average.
Market impacts
Understanding the interplay between the rental and housing markets in Orlando is crucial for a comprehensive analysis of the city’s real estate dynamics. These markets influence each other in several ways.
Impacts of the rental market on the housing market
Investment attraction: A strong rental market in Orlando creates an attractive opportunity for real estate investors. High demand for rentals, coupled with rising rent prices, makes purchasing properties for rental purposes appealing. This can lead to increased competition in the housing market, potentially driving up home prices.
Housing supply and demand: As rental prices rise, some renters may consider purchasing homes, either to escape escalating rents or as an investment opportunity. This shift can increase demand in the housing market, particularly for more affordable homes, potentially leading to price increases.
Market sentiment: The strength of the rental market can be a barometer for the overall health of the real estate market. A strong rental market often indicates strong demand for housing in general, reflecting positively on the housing market.
Impacts of the housing market on the rental market
Homeownership affordability: As home prices rise, homeownership may become less affordable for a segment of the population. This can lead to increased demand for rental properties, as those priced out of buying may have no alternative but to rent.
Rental supply: When the housing market is booming, and home prices are high, investors might be more inclined to sell their properties rather than rent them out, potentially reducing the supply of rental homes and driving up rental prices.
Economic factors: The state of the housing market is often tied to broader economic conditions. For instance, a booming housing market might reflect a strong local economy, which can attract more people to Orlando, increasing demand for rental properties.
Neighborhood-specific dynamics
The interaction between the rental and housing markets can vary significantly across different neighborhoods in Orlando. Factors like proximity to major employment centers, schools, tourist attractions and transportation infrastructure can distinctly influence the supply and demand dynamics in both markets.
Tourist areas: In neighborhoods close to Orlando’s many tourist attractions, short-term rentals might be more prevalent, affecting both the availability and pricing of longer-term rentals and residential properties.
Suburban vs. urban areas: Suburban areas might see different trends compared to urban areas. For example, families might prefer suburban neighborhoods for homeownership, while urban areas might have a higher demand for rental properties due to a younger demographic or proximity to employment centers.
The rental and housing markets in Orlando are interdependent, with changes in one often impacting the other. Neighborhood-specific factors further complicate this relationship, making localized market analysis essential for understanding real estate trends in Orlando.
Cost of living considerations
Food costs: Grocery expenses in Orlando are slightly above the national average by 3.2%. The average monthly grocery spending in Florida ranges between $266 and $300.
Utility costs: Orlando’s utility costs are 4.7% below the national average. The city’s humid subtropical climate necessitates continuous air conditioning, especially in summer. The estimated monthly energy costs are around $151.74.
Transportation: Orlando’s transportation costs are 4.6% above the national average. The city is not very walkable, with a Walk Score of 35, necessitating reliance on cars. Public transportation options include the LYNX Bus Service, with affordable fares and passes.
Taxation
Florida has no state income tax, with a sales tax rate of 6%. In Orlando, an additional 0.5% is added for Orange County, bringing the combined sales tax rate to 6.5%.
Earning requirements
To comfortably afford the average rent in Orlando, an annual income of about $71,160 is suggested, based on the convention that rent should not exceed 30% of income. However, variations in rent across different neighborhoods offer flexibility for different income levels.
Orlando’s housing market
Orlando’s housing market is dynamic and competitive, reflecting the city’s appeal and growing economy. Orlando’s rental market, while varied, requires a significant income to comfortably afford the average rent prices.
Overall, Orlando continues to be an attractive location with a strong housing market, offering a range of options for residents with diverse financial capabilities. If you’re ready to settle down in a sweet place in Orlando, you’ve come to the right place.
Want to learn how to make $1,000 in 24 hours? While it’s not as easy as making $100 in a day, you do have some options. Some may allow you to make $1,000 right away, and others may mean that you have to build up to reach this level. Perhaps you’re looking for extra money…
Want to learn how to make $1,000 in 24 hours?
While it’s not as easy as making $100 in a day, you do have some options.
Some may allow you to make $1,000 right away, and others may mean that you have to build up to reach this level.
Perhaps you’re looking for extra money to pay for an unexpected bill that popped up (like a car repair or medical bill!), or maybe you’re just looking to increase your income by having a $1,000-a-day income goal.
Key Takeaways
The fastest way to make $1,000 quickly is to sell stuff from around your home, like electronics, jewelry, or nice furniture.
Freelance jobs like consulting and writing can pay a high income.
Jobs in the gig economy, like driving or delivering, can make you money right away, and you can stack them with others to increase your daily earnings.
$1,000 a day in passive income is possible through starting an e-commerce business, a blog, and selling digital products (like a course or printable).
Best Ways To Make $1,000 In 24 Hours
Here are the best ways to make $1,000 in 24 hours.
1. Sell stuff online and near you
If you want to learn how to make $1,000 by tomorrow, then the fastest option is usually to find items in your home that you already own to sell.
This is because you already have stuff in your home (the average household has over 300,000 items!!) – so you may be able to sell something to make quick cash.
So, these would either have to be a lot of items or more expensive items. For example, you could sell clothing or gift cards, something big like a piece of furniture, electronics (maybe a gaming system or computer?), or a piece of jewelry.
Here are places where you can sell your stuff:
eBay: This site is great for unique or collectible items.
Amazon: Good for books, electronics, and almost everything. Here’s a helpful article to learn more – How To Work From Home Selling On Amazon FBA
Craigslist: The site has a wide range of categories for selling in your local area.
Facebook Marketplace: Connects you with local buyers.
Pawn shops: Quick cash for things like jewelry.
Flea markets: Rent a booth for the day and sell homemade items.
Garage sales: Set up a sale in your yard.
Poshmark: Easy online marketplace to sell clothing online.
To sell your stuff for the most money, make sure you take clear pictures, write honest descriptions (is there a tear or a stain?), price items competitively, and clean your items to make them more appealing.
And, always remember to stay safe by meeting in public spaces and avoid sharing personal information. With some effort and strategic selling, you can reach your $1,000 goal.
2. Start a blog
Starting a blog is not a quick way to make money, but it can be a stepping stone to making $1,000 in a day.
Plus, it’s my favorite way to make money online. In fact, I earn over $1,000 a day with this blog. So, I know that it is possible (don’t assume that means it is easy – it is not easy, trust me!).
Here are some steps to get started with a blog:
Set up your blog:
You’ll want to start by choosing a topic to write about, such as finance, family, travel, food, etc.
Purchase a domain name (this is basically the name of your blog).
Select a hosting service and install WordPress (you can find my tutorial for this here).
Write blog posts:
Write helpful and fun blog posts.
Publish a blog post at least once a week.
Monetize your blog:
Affiliate Marketing: Include affiliate links in your posts.
Sponsored Posts: Partner with brands for sponsored content.
Ad Revenue: Sign up for Google AdSense, Mediavine, Adthrive, or another display advertising company.
Drive traffic:
Promote your content on social media.
Engage in community related to your niche.
Guest post on other blogs to find new readers.
I recommend taking my How To Start A Blog FREE Course. In this free course, I show you how to create a blog, from the technical side to earning your first income and attracting readers.
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Want to see how I built a $5,000,000 blog?
In this free course, I show you how to create a blog, from the technical side to earning your first income and attracting readers.
3. Freelance writing
Freelance writing can be a great way to make money quickly.
I have been a freelance writer for years, and I also know of many other freelance writers who are able to earn $1,000 in a day. For a freelancer who writes high-quality articles, a $1,000 day is simply a normal day for them.
Sites like Upwork, Fiverr, and Freelancer have plenty of writing opportunities across many different industries. If you can write quality, original content quickly, it’s possible to reach your goal of $1,000 by taking on multiple writing assignments.
You could also try cold pitching, which is where you find businesses that could benefit from your writing services and send them an email about how you can help them achieve their goals with your writing.
To make $1,000 in a day as a freelance writer, you may want to focus on your existing network as well, if you have one. So, this means that you may want to reach out to former clients or colleagues who might need your writing services.
4. Real estate investing
Although real estate investing requires up-front cost and time, you may be able to build up to earning $1,000 a day.
$1,000 a day is $365,000 a year, which some real estate investors are able to earn through methods such as:
Renting out a home on Airbnb
Flipping properties for income
Investing in REITs
And more.
Recommended reading: How This 34 Year Old Owns 7 Rental Homes
5. Affiliate marketing
Affiliate marketing is my favorite way to earn money, and it helps me to earn $1,000+ a day here on this blog.
With affiliate marketing, you are promoting products or services on your website, email list, or social media account. If you get someone to sign up or purchase through your referral link, you then earn a commission.
Most products that you can think of have an affiliate program too, so there are plenty of things you can share.
Think about sharing books from Amazon on your blog, for example. You share a link to a specific book and tell your readers to buy it through your special link. Companies like Amazon like affiliates who bring in good traffic because it helps them make more sales.
Here’s a helpful article where you can learn more: What You Need To Know About Affiliate Marketing For Beginners + How 17 Bloggers Earned Their First Affiliate Income
6. Making money on YouTube
Creating a successful YouTube channel can lead to you making an income. While it’s unlikely to make $1,000 within 24 hours from right now, you may be able to get up to that amount by building a following on YouTube by consistently producing high-quality videos.
I know several YouTubers who are able to make $1,000 each day through their YouTube channel.
Here’s a breakdown of some different ways to make money with a YouTube channel:
Ad revenue – Once part of the YouTube Partner Program, you can earn money through ad views on your videos. You’ll need at least 1,000 subscribers and 4,000 watch hours in the past year to join.
Channel memberships – Your fans pay a monthly fee for special perks like exclusive badges, emojis, and access to members-only content.
Super Chats and Super Stickers – During live streams, viewers can purchase Super Chats and Super Stickers to highlight their messages. This is a direct way to earn as you interact with your audience.
Affiliate marketing – Promote products within your videos and include affiliate links in the video description. You’ll earn a commission for every sale made through your links.
Sponsorships – Companies can pay you to create content that features their products, especially if your content aligns with their brand, and you have an engaged audience.
7. Drive with Uber or Lyft
Driving for a rideshare service such as Uber or Lyft can make you money, but it might be difficult to make $1,000 in one day. It can help you to reach a $1,000-in-24-hours goal, though, by stacking it with other side hustle opportunities.
Also, there are things you can do like focusing on high-demand areas and driving during peak hours to increase the amount of money that you can earn.
I know of several people who only drive for these gig apps when they know that they are able to make the most amount of money. This is because you may be able to earn hundreds of dollars extra each day or week by timing when you drive.
Here’s a strategy to boost earnings:
Drive during peak hours – Surge pricing during busy hours means higher rates.
Look for driving bonuses – Look out for streak bonuses and other incentives. Uber or Lyft will list these in the app.
Manage your car expenses – Keep track of your gas, maintenance, and other costs to maximize profits.
Peak Times
Potential Earnings Boost
Rush Hour (AM/PM)
Increased Surge Pricing
Weekend Nights In Nightlife Areas
High Demand, More Rides
Events (concerts, sports games, etc.)
Surge Pricing, Bonuses
To reach your goal, you should know about your city’s traffic and when people need services. Getting $1,000 in a day is tough, but with a good plan, hard work, and a bit of luck, it’s something you may be able to work toward.
Other gigs related to this include driving for Instacart, Doordash, Uber Eats, and other food delivery services to earn cash. They won’t earn you $1,000 in a day, but they can be another way to make money.
8. Sell printables on Etsy
Designing and selling printables on Etsy, such as planner pages or art prints, is a creative way to make passive income. While reaching your goal of $1,000 quickly might be a challenge, growing your Etsy store can lead to long-term earnings.
I know of several successful printables sellers, and it is something that I would like to start one day as well. This is an area that I think will just continue to grow. Printables are very popular these days, and more and more people use them all the time. I personally buy printables all the time, and I find them very easy to use and helpful.
Printables are digital items that you can download and print at home, such as grocery shopping checklists, budget planners, wedding invitations, wall art, and more.
I recommend signing up for the Free Workshop: How To Earn Money Selling Printables. This free training will give you great ideas on what you can sell, how to get started, the costs, and how to make sales.
Recommended reading: How I Make Money Selling Printables On Etsy
Do you want to make money selling printables online? This free training will give you great ideas on what you can sell, how to get started, the costs, and how to make sales.
9. Sell your engagement ring
Selling jewelry, such as an engagement ring, can lead to you making money fast for when you need money right away.
If you really need the money and don’t mind parting with your engagement ring, then this may be an option for you to look into.
The value of your ring will depend on several factors, including the 4 Cs — cut, color, clarity, and carat weight — of the diamond, as well as the metal type and current market conditions.
One company I recommend looking into is Worthy.
Worthy sells wedding rings, loose diamonds, earrings, necklaces, bracelets, and luxury watches. They take care of everything, including appraisals and getting payment from the buyer.
You send your jewelry to them using a label they give you, and it’s insured. They put your item up for auction, and professional jewelry buyers can bid on it (you can set a minimum price). After the auction, you get the sale amount minus Worthy’s fee.
It usually takes around 2 weeks for the whole process, from sending the ring to getting paid.
Pawn shops and local jewelers are faster, but they might not give you the best prices. Selling online can make more money, but it takes longer with the auction process.
Recommended reading: How To Sell An Engagement Ring For The Most Money
10. Look for Craigslist gigs that pay
If you’re aiming to make $1,000 in a short span of time, you may be able to find quick jobs on Craigslist. Most of these will be one-time jobs, but there may also be full-time or part-time jobs.
To find Craigslist gigs in your town, just go to Craigslist and look for the “gigs” section.
Here are some jobs I found through a quick search:
Help loading and unloading a moving truck
Help with painting a home
Pet sitting and dog walking
Taking online surveys
Delivery driver
Data entry
Turning photographs into digital copies
Transport and install a microwave
House cleaner
Related reading: How I Earned $655 From Random Craigslist Jobs In One Month
11. Rent out your unused storage space
If you have extra space at home, you can rent it out to people in your area for storage. This could be a garage, driveway, closet, basement, or even an attic.
While reaching $1,000 in a single day would definitely be a stretch, renting out your space could give you a long-term income that you stack with other jobs on this list to make $1,000 a day.
You can use a website called Neighbor to list any extra space you have for rent, and you could make up to $15,000 per year.
You can also learn more about Neighbor at Neighbor Review: Make Money Renting Your Storage Space.
12. Consulting
If you’re really good at something, like business or marketing, selling consulting services can make you a good amount of money. You can charge more because of your expertise, and it’s doable to reach your $1,000 goal by taking on a few well-paying consultations.
I know several consultants who are able to make a very high income, in fact.
Companies hire consultants to get outside knowledge, a fresh viewpoint, and handle specific issues better.
Here’s how to start selling consulting services:
Identify Your Expertise – What are you good at? It could be marketing, finance, management, technology, or any other area where people seek expert advice.
Set Your Rate – Determine an hourly rate that reflects the value of your consultation. As a point of reference, if you charge $250 per hour, you would need to book four hours of consulting to meet your goal.
Network – Reach out to your professional network and let them know about your consulting service. Recommendations can go a long way.
13. Ask for a raise or for more hours
Talking to your boss about a raise might not get you $1,000 in a day, but negotiating a higher salary can be a good long-term strategy to make more money each year.
When approaching your employer about a raise, preparation is key.
Demonstrate your value – Before the meeting, compile a list of your accomplishments, contributions, and any additional responsibilities you’ve taken on.
Research market rates – Know the industry standards for your position and experience level to set a realistic raise request.
Time your ask – Ideally, schedule this conversation after a significant achievement or during a performance review.
Another way to increase your income at the job you already have is by working overtime. If you are paid hourly, you can see if your employer needs you to work any extra.
14. Sell an online course
If you know a lot about something, you can make and sell an online course. Websites like Teachable and Udemy let you create, host, and sell your course. While you might not make $1,000 right away, getting students over time can bring in a good amount of money.
I have an online course that I sell, Making Sense of Affiliate Marketing. I have also taken many online courses, such as on helping my toddler get better sleep, speech therapy for parents, business courses, blogging courses, and so much more.
And, these are all created and run by people like you and me.
There are many other things you can teach in an online course, such as:
Painting
Music lessons
Fitness and exercise
Time management tips
Parenting
Languages
Computer programming
Personal finance
Traveling
Photography and photo editing
Plants and gardening
Baking and cooking
Arts and crafts
Dropshipping
And so much more!
How Can I Get A $1000 Loan Within 24 Hours?
So, after reading the above, maybe you realize that you need $1,000 quickly and the above won’t work out for you fast enough. If that’s the case, then a loan may be another option to look into.
If you need a $1000 loan in 24 hours, first look at your options. Check if you can use your own things for quick cash. If not, check out personal loans and other ways to borrow money, but be aware that quick loans like these typically have very high interest rates that can be hard to pay off.
1. Assess your credit score: Your credit score plays an important role in your interest rate and terms of a personal loan. Generally, a higher score increases your chances of getting approved for loans with lower interest rates.
2. Explore online lenders: Some online lenders offer loans within a day, so you can get a $1000 loan in 24 hours. Fill out an easy application and compare the terms and payment choices from different lenders to pick the best one for what you need.
3. Look for short-term loans: If time is really important, you may be thinking about short-term loans like payday loans or title loans. They usually get approved faster, but keep in mind, these loans almost always have high interest rates and shorter times to pay back, so please be as careful as you can. You don’t want to go into some crazy debt that you will never be able to pay off.
Frequently Asked Questions About How To Make $1,000 In 24 Hours
Below are answers to common questions about how to make $1,000 in 24 hours.
How can I make a quick $1,000?
To make $1000 quickly, you can start by thinking about selling things you don’t need. Everyone has stuff in their home that they aren’t using – start with those items!
What are the fastest ways to earn $1,000 online?
Some of the fastest ways to earn $1,000 online include:
Freelancing with your skills, such as writing, designing, or coding
Affiliate marketing through your personal blog or social media channels
Creating and selling digital products, like ebooks, graphics, or courses
This really depends on what your definition of fast is. Some of the above income streams will take longer than others, of course.
Which passive income streams can pay $1,000 quickly?
While passive income streams typically take time to build, there are some options that can make $1000 quickly, such as with:
Rental properties, if you own an empty space or have a spare room in your home that you can rent out
Dividend-paying stocks, though you’ll need a very large amount of money invested to make that kind of money in a single day
Online courses or subscription-based services
The initial setup might take time and effort, but the long-term rewards could be worth it. Learning how to make $1,000 a day in passive income is possible, but it would require a lot of up-front legwork to get you there.
Recommended reading: 18 Passive Income Ideas To Earn $1,000+ Each Month
Which freelance jobs can generate $1,000 within a day?
Earning $1000 within a day of freelancing is ambitious, but it’s possible through high-paying gigs and opportunities like:
High-ticket sales or consulting services, where you share valuable advice and expertise
Technical jobs, like IT consulting or software development, if you have in-demand skills
Creative projects with tight deadlines, such as writing marketing copy for advertisements, web design, and graphic design
Learning how to make $1000 in 24 hours online through freelancing is possible, but it will take you some time to get to this point.
How To Make $1,000 In 24 Hours – Summary
I hope you enjoyed this article on how to make $1,000 in 24 hours.
While some may earn you $1,000 in the next 24 hours (such as selling an expensive item that you already own – like jewelry or a gaming system), others may take you time to earn $1,000 in a 24-hour time period.
Some on this list may be a full-time job, and others may be part-time or even one-time odd jobs (such as on Craigslist).
Getting $1,000 in a day might seem hard, but with the right plans and effort, it is doable. Whether you have a surprise expense that you need to pay for, want to boost your savings, or simply just want to start making more money, making money at this level is possible.
Have you ever needed $1,000 fast? What have you done to make $1,000 quickly in the past?