There’s a saying that you should always read the fine print, and the same applies when it comes to a gym membership. If you’ve been thinking about joining Planet Fitness, here’s an explanation of how much a gym membership costs, what perks are included and the fine print to keep in mind.
What is Planet Fitness?
Planet Fitness is a gym with over 2,500 fitness centers. The chain provides a range of fitness equipment and services people can use to exercise and meet fitness goals.
How much does a Planet Fitness membership cost?
Planet Fitness has two main membership tiers: the Classic and the PF Black Card. Before signing up, keep in mind that you may be required to commit for 12 months. You must be a minimum of 18 years old to enroll, but 13- to 17-year-olds can join with a parent or guardian.
When considering the cost of a Planet Fitness membership, keep in mind that there is an annual fee of $49. You pay the annual fee in addition to the monthly membership fees.
Classic membership
This is the basic membership, and it starts at $10 a month before taxes and fees. You get unlimited access to your home club but can’t go to other locations. Perks include access to Planet Fitness app workouts and partner rewards and discounts.
The Classic membership may be ideal for people who are likely to go to the same gym each time they work out. It may also be good for people who just want to put their head down and exercise and don’t need extras.
PF Black Card membership
This is the second tier Planet Fitness offers, and there are far more perks. The PF Black Card membership starts at $24.99 a month before taxes and fees and comes with all the benefits mentioned above and more, including:
The ability to bring one guest.
Access to any Planet Fitness gym worldwide.
Access to equipment like tanning, massage chairs and hydromassage.
Use of Total Body Enhancement, a machine that combines red light therapy and vibration to produce various health and cosmetic benefits.
50% off select drinks.
Premium access to partner rewards and discounts.
If you have a sporadic schedule or travel often, this tier may be ideal since you’ll have access to multiple branches. People who enjoy having a workout buddy could also benefit since you can bring a plus one. Likewise, if you live with someone, be it a partner or roommate, you could split the cost of the gym membership and save a few extra dollars.
You can upgrade your membership from Classic to PF Black Card online or ask for assistance when you’re at the gym. Downgrading is also possible, but you’ll have to do that in person.
Also, if you usually use your credit card for payments to get those extra benefits, note that most Planet Fitness branches accept payments through checking accounts only.
Other perks that come with a membership
There are multiple amenities members can enjoy at Planet Fitness. These perks are available to all members, whether they’re at the PF Black Card or Classic.
Free fitness training
Some people want to use a personal trainer but can’t afford to because it’s not within their budget. Planet Fitness has a competitive edge there since they offer free fitness training. And you don’t have to be a PF Black Card member to access the training.
Trainers can be used as often as you need them. The first step is to sign up through the Planet Fitness mobile app or on your gym’s website. If you’d rather do it in person, go to the front desk at your local fitness location to sign up.
Customized workout plan
Some people feel overwhelmed when they’re in the gym because they aren’t sure which workouts or equipment will help them reach their fitness goals. Planet Fitness offers customized workout plans for all members that include a meeting with a certified trainer to chat about fitness goals, medical background and exercise history.
Group training sessions and group classes
Working out with others can be more motivating than working out alone. Planet Fitness offers group training sessions for members, including classes for upper and lower body, core and stretching.
Sign up for group training sessions online using the pre-booking feature or show up at class time to see if there’s space available. Every Planet Fitness location offers between 11 and 14 small group training sessions per day, which means you might be able to catch one even if you’re working 9 to 5.
Free Wi-Fi
It can be nice to have access to Wi-Fi at the gym to watch a show while on the treadmill or follow along to a fitness video. All Planet Fitness members and guests have access to free Wi-Fi, in case that’s an important perk for you.
Gym workouts via the Planet Fitness app
On days you can’t make it to the gym, members have access to a range of free workouts on the Planet Fitness app. These workouts can also be helpful for people who don’t know what exercises to do at the gym and want to follow along to a workout solo.
Referral program
Looking to save money on your gym membership? Planet Fitness has a referral program that can cut up to three months of membership fees each year. You get a free month for each person you refer who joins, but there’s a cap of three people. The referred friend can also join with $1 down and no commitment, which gives them flexibility in case they decide Planet Fitness isn’t for them.
How to cancel a Planet Fitness membership
There isn’t a uniform way to cancel a Planet Fitness membership — the cancellation process is different at each club. For most locations, you’ll have to go in person and cancel the membership, although there are a few that allow you to cancel by mail or online. For some people, this is a hassle, so that’s something to consider before signing up.
Another detail that could impact your cash flow is the timing of your cancellation. To avoid being billed the annual membership fee, you need to cancel by the 25th of the month prior to the annual fee date. Also, those who cancel before they’ve completed their minimum commitment will pay a $58 buyout fee.
Be mindful of these cancellation clauses. It can be easy to repeatedly forget to cancel your membership and end up paying for a membership you aren’t using.
Track your spending with the NerdWallet app
Track your budget and see all of your finances together in a single place. Get timely insights to make smart financial decisions – all for free.
To answer whether a $40,000 salary is good, you need to consider your perspective. For a recent grad in a small town where the cost of living is low, that might be an annual income that pays the bills. But a $40,000 salary is not typically enough for a household to live comfortably in most parts of the United States. To put it another way, a single person can live more comfortably on a $40,000 salary, but a family — with or without children — may find it more difficult.
Rising inflation has made it more challenging to get by on $40,000 in 2022, but this salary is still far above the United States Census Bureau’s poverty threshold for families of up to six people. The $40,000 figure represents earning more than the federal minimum wage ($7.25/hour).
So is $40,000 a good salary? Well, it depends.
Key Points
• A $40,000 salary may be sufficient for an individual in a low-cost area, but it may not be enough for a family to live comfortably in most parts of the US.
• Rising inflation has made it more challenging to live on a $40,000 salary, but it still exceeds the poverty threshold for families.
• Compared to the median household income in the US, a $40,000 salary falls short, but it can contribute to the median household income when combined with a second income.
• A $40,000 salary translates to a monthly income of $3,333.33, a biweekly paycheck of $1,538.46, and a weekly income of $769.23.
• Living on a $40,000 budget requires careful expense tracking, budgeting, debt management, and saving strategies. Location plays a significant role in how far the salary can stretch.
How Does a $40,000 Salary Compare to the American Median Income?
Here’s a look at how earning a $40,000 annual income compares to that of your fellow Americans.
• According to the U.S. Census Bureau, the median household income in 2020 (when data was gathered) just surpassed $67,500.
• More recently, the Bureau of Labor Statistics determined that the median weekly income of a full-time worker (salary or hourly) was $1,037, or nearly $54,000 a year.
While a $40,000 salary falls short of recent BLS definitions of the median personal income, it could successfully contribute to the Census Bureau’s picture of the median household income, when combined with a second income from a domestic partner.
Could this salary be considered good? Consider the following:
• As an individual, you may find that $40,000 is a good entry-level salary.
• Couples living the DINK lifestyle (which stands for dual income, no kids) and who each make $40,000 would be well above the median household income. Plus, they would have the additional costs of raising children as part of their budget.
$40,000 Salary Breakdown
It can be helpful to know what a $40,000 salary translates to as a monthly budget, weekly paycheck, or even hourly rate. This may help you compare career options and budget wisely, not to mention answer that question, “Is $40K a good salary?”
Here’s how it breaks down:
• Monthly income: $3,333.33
• Biweekly paycheck: $1,538.46
• Weekly income: $769.23
• Daily income: $153.85*
• Hourly income: $19.23**
*Based on 260 working days a year **Based on 2,080 working hours a year
And remember: That’s before taxes. If you are single and make $40,000 a year, your federal tax bracket is at 12%, but you may also owe state, city, and even school district taxes as well. It’s important to keep that in mind as you plan and assess how to pay bills and save with this salary.
Recommended: What to Do When You Get a Pay Raise: 12 Tips
Can You Live Individually on a $40,000 Income?
It is possible to live individually on a $40,000 income. In fact, you may be able to afford the average monthly expenses for a single person and work on your saving and investing goals.
Your location will have the largest impact on how far your dollars will stretch. Areas with a lower cost of living will likely be easier to afford for an individual on a $40,000 income.
As an individual, you can help your salary go further by looking for ways to save money, like:
• Having a roommate or renting out a room in your house if you own one
• Cooking at home instead of eating out
• Buying a used car or, depending on where you live, relying on public transportation
• Finding a higher-yield savings account, ideally over 1.00% APY
Get up to $300 when you bank with SoFi.
Open a SoFi Checking and Savings Account with direct deposit and get up to a $300 cash bonus. Plus, get up to 4.60% APY on your cash!
Best Places to Live on a $40,000 Salary
If you can afford moving expenses and aren’t tied to a specific location for work, you can make your dollars go further more easily in certain locations in the United States. These are places with a lower cost of living. Here are the five cheapest cities to live in the U.S. this year, according to U.S. News:
• Hickory, North Carolina
• Green Bay, Wisconsin
• Huntsville, Alabama
• Quad Cities (Davenport-Bettendorf, Iowa and Moline-Rock Island, Illinois)
• Fort Wayne, Indiana
However, there’s more to moving than just the expenses and the job. Before packing up a rental truck, consider whether you are comfortable leaving behind friends, family, and familiar places.
Recommended: Financial Moves to Make During a Job Transition
Worst Places to Live on a $40,000 Salary
A $40,000 salary might not go far enough in a city with a high cost of living. U.S. News research indicates these are the most expensive cities to live in:
• Los Angeles, California
• Miami, Florida
• San Diego, California
• Salinas, California
• Santa Barbara, California
And if you were expecting to see New York City on this list, don’t worry: It’s not far behind, at number nine.
Tips for Living on a $40,000 Budget
So how can you (and possibly your family) live on a $40,000 budget? It’s important to cut costs, look for deals, pay down your debt, and build up savings for an emergency.
But living on a small salary doesn’t mean you have to completely give up entertainment. Remember that it’s OK to treat yourself to the nice things in life from time to time, as long as they are within reason. Everyone needs some fun in their life.
Here are some important tips for living on a $40,000 budget:
Carefully Tracking Your Expenses
First things first, get an understanding of your current spending habits. Your bank may offer tools that make this easy to analyze or you can download apps or check websites that make this easier.
Consider what bills you have every month, whether they are on auto pay, and, if so, when do they process? (This will help you schedule your bills and avoid getting hit with late fees.) Make a list of all your recurring expenses (mortgage or rent, student loans, car payment, phone, insurance, and utilities), and then analyze how much on average you’re spending on more variable expenses like groceries, gas, clothing, and entertainment.
What can you cut? What bills can you negotiate down? Where can you reallocate money toward savings?
Now that you have an idea of what you’re currently spending, it’s time to design a budget around what you should be spending.
Start by plugging in necessary monthly expenses; these are things you must pay for each month, like your home, insurance, and food. Only once you can see that these basic needs are met should you begin to budget for things like dining out or new clothes, also known as wants vs. needs.
Not sure where to start? Do some online research on how to make a budget. There are different techniques including a line item budget and the 50/30/20 budget rule.
Getting Out of Debt
As you consider how to manage daily life on a $40,000 salary, it’s wise to pay attention to the role that debt plays in your personal finances. Mortgage and student loan debt are structured to be paid off over decades, and can be considered by some to be good debt, as the interest rates are often relatively low and timely payments build your credit history. The rates on credit card debt, however, can be high (currently over 20% on new offers and 16% on existing accounts) and therefore more detrimental to your finances (and mental health). If you have serious credit card debt, it is wise to cut back expenses as much as you can so you can focus on paying off your debt.
You can tackle your debt using the snowball method or the avalanche method. You may also consider a balance-transfer credit card or a debt consolidation program, depending on your situation. A debt counselor who works for a nonprofit, like the National Foundation for Credit Counseling (NFCC ), can be helpful as well.
Saving Your Money
If you are debt-free (house, car, and student loan payments aside) and still have wiggle room in your budget after accounting for necessary expenses and a little bit of fun money, you can allocate some of your $40,000 salary toward your saving goals. These might include vacations, a house down payment, renovations, or a wedding. An emergency savings fund is often a good place to start.
Recommended: How to Save Money from Your Salary
Investing Your Money
After you have gotten a handle on your expenses, designed a budget, and opened a savings account, you might consider if there is enough leftover from your $40,000 salary for investing. This may not be possible if you live in a city or state with a high cost of living.
How can you start investing? If your employer offers a 401(k) match, consider taking advantage of that. It’s basically free money, so contribute enough to snag it.
You can also look for automated investing opportunities so you don’t have to worry about building a portfolio from scratch.
Managing Finances With SoFi
If your $40,000 salary is paid via direct deposit, think about opening a high interest online savings account. With direct deposit, you can get an array of perks from our SoFi Checking and Savings account. You’ll spend and save in one convenient place, plus you’ll earn a competitive APY and pay no fees, which can help your money grow faster. What’s more, qualifying accounts can get paycheck access up to two days early.
Make the most of your money with SoFi.
FAQ
Can you live comfortably on $40,000 a year?
Individuals can often live comfortably on $40,000 a year. Families, however, may struggle with this salary, especially in areas with a higher cost of living.
What can I afford making $40K a year?
If you are an individual living on $40,000 a year in an area with a low to moderate cost of living, you can afford typical monthly expenses like food, housing, and utilities and still have enough for some fun expenditures, like entertainment. If you are frugal and build a budget, you may also be able to pay down debt, build your savings, and even invest a little.
Is $40,000 a year considered middle class?
According to Pew Research, a middle-class family of three makes between $56,000 and $156,000. Families of that size who bring in $40,000 a year would not be considered middle class. However, an individual making $40,000 a year would likely qualify as middle class.
Photo credit: iStock/Prostock-Studio
Third-Party Brand Mentions: No brands, products, or companies mentioned are affiliated with SoFi, nor do they endorse or sponsor this article. Third-party trademarks referenced herein are property of their respective owners.
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.
The SoFi Bank Debit Mastercard® is issued by SoFi Bank, N.A., pursuant to license by Mastercard International Incorporated and can be used everywhere Mastercard is accepted. Mastercard is a registered trademark, and the circles design is a trademark of Mastercard International Incorporated.
SoFi members with direct deposit activity can earn 4.60% annual percentage yield (APY) on savings balances (including Vaults) and 0.50% APY on checking balances. Direct Deposit means a deposit to an account holder’s SoFi Checking or Savings account, including payroll, pension, or government payments (e.g., Social Security), made by the account holder’s employer, payroll or benefits provider or government agency (“Direct Deposit”) via the Automated Clearing House (“ACH”) Network during a 30-day Evaluation Period (as defined below). Deposits that are not from an employer or government agency, including but not limited to check deposits, peer-to-peer transfers (e.g., transfers from PayPal, Venmo, etc.), merchant transactions (e.g., transactions from PayPal, Stripe, Square, etc.), and bank ACH funds transfers and wire transfers from external accounts, do not constitute Direct Deposit activity. There is no minimum Direct Deposit amount required to qualify for the stated interest rate.
SoFi members with Qualifying Deposits can earn 4.60% APY on savings balances (including Vaults) and 0.50% APY on checking balances. Qualifying Deposits means one or more deposits that, in the aggregate, are equal to or greater than $5,000 to an account holder’s SoFi Checking and Savings account (“Qualifying Deposits”) during a 30-day Evaluation Period (as defined below). Qualifying Deposits only include those deposits from the following eligible sources: (i) ACH transfers, (ii) inbound wire transfers, (iii) peer-to-peer transfers (i.e., external transfers from PayPal, Venmo, etc. and internal peer-to-peer transfers from a SoFi account belonging to another account holder), (iv) check deposits, (v) instant funding to your SoFi Bank Debit Card, (vi) push payments to your SoFi Bank Debit Card, and (vii) cash deposits. Qualifying Deposits do not include: (i) transfers between an account holder’s Checking account, Savings account, and/or Vaults; (ii) interest payments; (iii) bonuses issued by SoFi Bank or its affiliates; or (iv) credits, reversals, and refunds from SoFi Bank, N.A. (“SoFi Bank”) or from a merchant.
SoFi Bank shall, in its sole discretion, assess each account holder’s Direct Deposit activity and Qualifying Deposits throughout each 30-Day Evaluation Period to determine the applicability of rates and may request additional documentation for verification of eligibility. The 30-Day Evaluation Period refers to the “Start Date” and “End Date” set forth on the APY Details page of your account, which comprises a period of 30 calendar days (the “30-Day Evaluation Period”). You can access the APY Details page at any time by logging into your SoFi account on the SoFi mobile app or SoFi website and selecting either (i) Banking > Savings > Current APY or (ii) Banking > Checking > Current APY. Upon receiving a Direct Deposit or $5,000 in Qualifying Deposits to your account, you will begin earning 4.60% APY on savings balances (including Vaults) and 0.50% on checking balances on or before the following calendar day. You will continue to earn these APYs for (i) the remainder of the current 30-Day Evaluation Period and through the end of the subsequent 30-Day Evaluation Period and (ii) any following 30-day Evaluation Periods during which SoFi Bank determines you to have Direct Deposit activity or $5,000 in Qualifying Deposits without interruption.
SoFi Bank reserves the right to grant a grace period to account holders following a change in Direct Deposit activity or Qualifying Deposits activity before adjusting rates. If SoFi Bank grants you a grace period, the dates for such grace period will be reflected on the APY Details page of your account. If SoFi Bank determines that you did not have Direct Deposit activity or $5,000 in Qualifying Deposits during the current 30-day Evaluation Period and, if applicable, the grace period, then you will begin earning the rates earned by account holders without either Direct Deposit or Qualifying Deposits until you have Direct Deposit activity or $5,000 in Qualifying Deposits in a subsequent 30-Day Evaluation Period. For the avoidance of doubt, an account holder with both Direct Deposit activity and Qualifying Deposits will earn the rates earned by account holders with Direct Deposit.
Members without either Direct Deposit activity or Qualifying Deposits, as determined by SoFi Bank, during a 30-Day Evaluation Period and, if applicable, the grace period, will earn 1.20% APY on savings balances (including Vaults) and 0.50% APY on checking balances.
Interest rates are variable and subject to change at any time. These rates are current as of 10/24/2023. There is no minimum balance requirement. Additional information can be found at https://www.sofi.com/legal/banking-rate-sheet.
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.
Looking for a real estate side hustle? Whether you are looking for passive income ideas or if you are looking for a part-time job (or more!), there are many different real estate side hustles. I have done a few different real estate side gigs, and I know many people who have side hustles in this…
Looking for a real estate side hustle?
Whether you are looking for passive income ideas or if you are looking for a part-time job (or more!), there are many different real estate side hustles.
I have done a few different real estate side gigs, and I know many people who have side hustles in this area as well. To get started in real estate, you don’t have to spend a lot of money – there are several real estate side gigs that can be started even if you are brand new or are on a budget.
Key Takeaways
Real estate side hustles have a range of options from income generating assets to freelance opportunities to office jobs.
You can supplement your income with both short-term and long-term real estate strategies.
Finding the right fit depends on your availability, investment capacity, and financial goals.
Best Real Estate Side Hustles
Here’s a quick summary of some of the different best real estate side hustles:
House hacking: Buy a property, live in one unit, and rent out the rest.
REIT investing: An easy way to start investing in real estate with less capital.
Airbnb rentals: Rent out a spare room or an entire property on a short-term basis.
Property management: If you’re organized and good with people, managing properties for others could be a perfect fit.
Long-term rentals: Becoming a landlord can generate steady cash flow.
Fix and flip: Buy properties that need work, renovate them, and sell them for a profit.
Below, you will read the full list and learn more about each one.
1. House flipping
Flipping houses can be a good real estate side hustle if you like real estate and enjoy fixing things up.
When you flip houses, you’re basically buying homes, making them better with repairs and upgrades, and then selling them to make more money.
The first thing to do for a successful house flip is to find a property that can be made better, such as by looking for homes in neighborhoods that are getting better or have room to grow. Think about things like where it is, what the market is like, and the condition of the property.
Before putting money into anything, it’s important to carefully look at the finances. You’ll want to figure out how much it will cost to buy, fix, and keep the property, and think about things like the cost of materials, paying workers, getting a loan, and the costs while you’re fixing things.
To flip a house well, you need to make smart changes that make the property better, without spending too much, by concentrating on important areas like the kitchen and bathrooms, and fixing any big problems with the structure or safety.
Recommended reading: 10 Best Books on Flipping Houses To Make Money
2. Investing in REITs
Real Estate Investment Trusts (REITs) are companies that own, operate, or finance income-generating real estate. They are a way for you to invest in real estate without directly managing or owning properties.
An REIT is like a company that owns and takes care of real estate that makes money. They sell shares of this company to people, kind of like how stocks work.
When you invest in REITs, you can earn money from the real estate world without actually owning any property. So, if you don’t want to deal with being a landlord, this could be a good option. It’s way less work than owning property and handling it yourself.
You can even spread out your money and invest in different kinds of properties with REITs, like houses, offices, factories, and stores.
3. Getting a roommate
Getting a roommate in your home, whether that be a full-time roommate or renting out an extra room in your home short-term on Airbnb, can be a great real estate side hustle that doesn’t require very much work from you.
The earnings you can make from having a roommate depend on things like:
Where your home is (an expensive area? rural?)
The space you are renting to a roommate (for example, do they get their own bathroom? private entrance available?)
To find a roommate, you can share about it on your own Facebook page, put up an ad on sites like Craigslist, or make a rental listing on Airbnb. There are lots of places where you can let people know you’re looking for a roommate.
I have had many roommates in the past when I was younger and had a home with spare bedrooms. I would rent them out to long-term renters and people that we personally knew (such as friends and my sister).
Recommended reading: Tips For Renting A Room In Your House.
4. Airbnbs and vacation rentals
Turning your property into an Airbnb or other short-term rental can be a way to generate extra income. This is when you rent out your space, whether a full house, an apartment, or just a room, to travelers for short stays.
Before starting your Airbnb side hustle, be sure to:
Check local laws: Make sure short-term rentals are permitted in your area. There are many areas nowadays that are more strict when it comes to short-term rentals.
Understand the financials: Calculate potential earnings against expenses like mortgage, utilities, and maintenance.
Set up your space: Furnish and decorate to create a welcoming environment.
Market your rental: Use high-quality photos and create listings on rental platforms like Airbnb and Vrbo.
The amount you can earn can vary, with some hosts making around $5,000 to $10,000 a month or more, but this depends on factors such as location, rental type, and occupancy rates. Always plan for occupancy ebbs and flows – it’s part of the short-term rental business.
5. Real estate photography
If you’ve ever looked at a house listing and thought that the pictures looked awful, then this may be the real estate side hustle for you.
Real estate agents many times hire out for the photography side of selling a house, as they know and understand how important good pictures are.
Real estate photography is all about taking pictures of houses and spaces to grab the attention of people who might want to buy them. Real estate photographers might take pictures of the outside of a house, the backyard, the living room, attic, bathroom, and more.
You can start with the equipment you likely already have, like your smartphone, which can work well because phones these days have great cameras.
How you show a property can really impact a client’s chance of selling it. Your photos are not just pictures; they’re an important part of how the property gets advertised.
As you continue with this real estate side hustle, you might think about getting better equipment (like a real camera!), but for now, practice paying attention to details and getting better at taking pictures.
If you’re thinking about doing something extra to earn money in real estate, photography could be a great choice.
Recommended reading: 18 Ways You Can Get Paid To Take Pictures
6. Real estate drone photography
Drone pilots sell real estate photography services to help real estate agents showcase the properties they are selling.
When property listings include pictures from various angles and heights, it gives a different perspective compared to regular photos. This helps show aspects of real estate that traditional pictures might miss.
When you sell property photography services using your drone, you’re providing a valuable service to real estate companies that want to stand out in a crowded housing market.
Homes are increasingly being sold using drone photos, and it’s understandable because they can showcase the surroundings of a home. Also, potential home buyers can see the entire property and house through a drone picture, giving them a better understanding of what the home includes.
Recommended reading: How To Make Money With A Drone
7. Long-term rentals
A long-term rental is when you rent out a property for a long amount of time, usually six months to a year or even longer. An example would be renting out an apartment or house to a family to live in full-time.
Long-term rentals are different from short-term rentals like vacation homes or Airbnb listings. They are meant for people or families looking for a longer place to live.
A benefit of long-term rentals is the reliable and steady income they can give you. When you rent your property to tenants for an extended period, you set up a regular cash flow of rental payments. This stability can be especially nice for people who are looking for a dependable source of passive income.
Plus, it’s usually less work than a short-term rental, because you don’t have to clean the home every few days or find new people to rent out to.
Recommended reading: How This 34 Year Old Owns 7 Rental Homes
8. Buy and hold for long-term wealth
If you want to grow wealth through real estate, the buy-and-hold strategy is a way to achieve lasting growth. This means buying a property and keeping it for an extended period, benefiting from both its increasing value over time and the rental income it makes you over the years.
Some positives to think about with a buy-and-hold real estate side hustle include:
Appreciation: Over time, real estate often increases in value.
Rental income: It can provide a steady cash flow each month.
Tax advantages: Possible deductions can reduce your taxable income.
The buy-and-hold strategy requires patience and a willingness to handle market changes. It’s a long-term approach, not a quick one, but if you stay persistent, you can create an investment portfolio for future financial stability.
9. Notary services for real estate
If you want to get more into the real estate world without becoming an agent or broker, becoming a notary public can be a way to make extra money.
Many documents, including deeds, mortgages, and power of attorney, require notarization to be legally binding.
With a notarization license, you can provide an important service required for different real estate transactions.
Notaries are important because they help make sure that the people signing documents are who they claim to be to prevent fraud.
10. Rental arbitrage
Rental arbitrage is a way to make extra money in real estate without owning a property. You rent a place for a long time and then sublease it as a short-term rental using platforms like Airbnb.
Here’s how to get started:
Check local laws: You’ll want to make sure your city or state allows for short-term rentals.
Make sure the rental allows for you to do this: Not every rental will be okay with you renting it out. You will want to read your rental contract carefully.
Do market research: Understand the demand for short-term rentals in your target area, such as by looking for locations with high tourist traffic or business conferences.
Potential Benefits
Considerations
+ Strong cash flow potential
– Initial setup and furnishing cost
+ Low startup costs compared to buying
– Dependence on short-term rental market stability
Making money in rental arbitrage comes from the difference between the cost of the long-term lease and the income from short-term rentals. The bigger the gap, the more potential for profit. But remember to factor in the expenses of running the rentals, like cleaning and maintenance costs.
11. House hacking
House hacking is a strategic approach to real estate where you purchase a property with multiple units and live in one unit while renting out the others. This is a side hustle because it can help offset your living expenses through the rental income.
House hacking can be an easy starting point if you want to dip your toes into real estate investing with the added perk of reducing your personal living expenses.
Back when we were living in a traditional house, we house hacked for a little while and had a few different roommates live with us. The monthly rent we collected allowed us to lower our house payments and put more money in savings.
We house hacked with our first house, and it was really great for us. Being able to set more money aside even helped me get ready to quit my job to become a full-time blogger.
If you are looking for a good book on the subject of house hacking, then I recommend reading The House Hacking Strategy: How to Use Your Home to Achieve Financial Freedom by Craig Curelop.
Recommended reading: What Is House Hacking & How To Live For Free
12. Real estate agent
A real estate agent is a person who helps people, like you and me, find real estate to buy or sell. They usually earn their income through a commission, which is a percentage of the property’s sale price.
To become a real estate agent and start this real estate career, you only need a high school diploma and a professional license. As of 2021, the median pay, according to the U.S. Bureau of Labor Statistics, is $23.45 per hour, or $48,770 per year.
And, there are tons of real estate agents who make a lot more money than this.
13. Crowdfunding and peer-to-peer lending
If you want to learn how to make extra money in real estate, then crowdfunding and peer-to-peer lending are areas to look into.
Crowdfunding platforms allow you to invest in real estate deals with a smaller amount of money compared to purchasing property outright. This can provide you with passive income through rental returns or potential property value appreciation.
Peer-to-peer lending platforms enable you to lend money directly to borrowers. You can potentially earn higher returns compared to traditional savings accounts, but there is always the risk of a borrower not repaying the loan.
Both crowdfunding and peer-to-peer lending utilize technology to connect investors with individuals seeking funding.
14. Bird dogging
Bird dogging in real estate can be a side hustle where you help find potentially profitable properties for investors. Your skill in spotting undervalued or distressed properties is important.
Here’s what you usually need to do:
Conduct market research to locate properties that are flying under the radar.
Build a network with local real estate investors who are looking for deals.
Learn to use the Multiple Listing Service (MLS) to spot opportunities.
Typically, you’ll be on the lookout for foreclosures, bank-owned properties, and distressed homes due for a quick sale.
As a bird dog, your compensation usually comes from a referral fee after the investor decides to move forward with your find. Importantly, to perform this role, you don’t necessarily need any initial capital, just the time and skill to identify promising investment opportunities.
15. General contractor
General contractors handle the day-to-day activities on construction sites, overseeing tasks from residential remodels to constructing new homes.
This is typically more of a full-time job, but this can sometimes be done as a real estate side hustle.
As a general contractor, you can choose projects that match your schedule and interests, providing flexibility. Despite the responsibilities, this role allows you to play a central role in turning plans into actual buildings, giving you the potential to make extra money.
16. Flip raw land
Getting involved in raw land flipping is when a person finds and buys undeveloped land to sell later at a profit.
The main benefits include a lower initial investment and less complexity compared to traditional real estate investments, as it doesn’t involve renovation or improvements. There are no buildings, instead it may be a lot or acres of land.
Here’s a step-by-step guide on how to start:
Find raw land – Research areas with potential growth or upcoming developments that could boost land value.
Due diligence – Perform thorough checks on land titles, zoning laws, and road access to avoid legal issues.
Pricing strategy – Your selling price should be attractive enough for buyers yet ensure you make a reasonable profit margin.
Sell and negotiate – Use online platforms to reach potential buyers and negotiate the best deal.
17. Rent out your storage space
If you have unused land or space in your home, renting it out for storage space can be an easy way to make passive income.
People have a lot of stuff, and they will pay you to store their stuff in your unused spaces.
You can sell storage solutions for vehicles, boats, personal belongings, and more. You can rent out your parking space, closet, basement, attic storage, and more.
A site where you can list your storage space is called Neighbor and you can earn $100 to $400+ each month. This depends on the demand in your area and the type of storage space you are renting out.
Recommended reading: Neighbor Review: Make Money Renting Your Storage Space
18. Property manager
A property manager side hustle can be a great way to make extra money.
A property manager is a real estate professional who finds and oversees tenants, collects rent, and handles repairs and maintenance activities. It’s a side hustle that property owners pay for because they may not have the time or skills to effectively manage their own property.
Property managers can manage long-term rentals like apartments, short-term rentals like Airbnbs, and even commercial spaces as well.
I have a friend who is a property manager on the side of his full-time construction job – he manages many different types of properties, from second homes to vacation rentals to someone simply being out of town. He checks on their properties to make sure that everything is running smoothly.
19. Home stager
If you’re passionate about real estate and design, starting a side hustle as a home stager could be profitable for you. As a home stager, your job is to improve the appearance of a home before it’s listed for sale.
This often results in faster sales and higher prices, making your service valuable to sellers.
You can start by staging homes for friends or family, if possible, to build a portfolio. Before and after photos are powerful tools to showcase your work.
You can even provide consultations to homeowners who prefer to do the actual staging themselves. In such cases, your design style can be a more budget-friendly option for a do-it-yourself homeowner.
20. Home inspector
We recently bought a house, and our home inspector was actually a home inspector on the side – this was his real estate side hustle! I think he was a city inspector (or something similar) full-time, so he was very knowledgeable in the area.
Home inspection as a side job can be a strategic move if you’re interested in real estate. This job allows for flexibility since you can set your hours, such as by completing home inspections on the weekends or before or after your day job.
You’ll need to invest in proper training and get licensed, which is a process that can be completed relatively quickly.
The responsibilities of a home inspector include:
Inspecting homes for possible problems, like a leak or bad wiring.
Creating and delivering reports based on what you find during the inspection.
21. Real estate appraiser
Real estate appraisers determine the fair market value of a property, and this process is important in transactions, such as home sales and refinances.
Appraisers assess property values by taking notes on unique characteristics and comparing them with similar properties that have sold recently.
They then prepare reports, detailing findings and providing a valuation that banks and other institutions depend on for loans.
22. Real estate wholesaler
Real estate wholesalers are middlemen who find properties under market value, contract them with the seller, and then sell the contract to a buyer, often an investor. Their profit comes from the difference between the contracted price with the seller and the amount the buyer pays.
Here is a quick summary of what a wholesale real estate side hustle is:
Find a distressed property – Search for properties that can be bought below market value.
Evaluate the property – Determine the After Repair Value (ARV) and estimate repair costs.
Secure under contract – Enter into a contract with the seller, giving you the right to purchase.
Find a buyer – Locate an investor interested in buying the contract.
Assign the contract – Transfer your purchasing rights to the investor for a fee.
By becoming skilled at finding good deals and building connections with trustworthy investors, real estate wholesaling can become a profitable real estate side hustle.
23. Start a real estate blog
Starting a real estate blog (or even a real estate YouTube channel or social media account!) can be a good way to make extra money without having to spend a lot of money.
With a real estate blog, you can write about local market insights, home buying and home selling tips, property investment strategies, home improvement and DIY projects, and more.
I have been a blogger for years, and I really love it. I am able to create my own schedule, decide how I make money online, travel whenever I want, and more. And, it all started on the side of my day job – so I definitely think that a real estate blog can be started as a side hustle.
Learn more at How To Start A Blog FREE Course.
Frequently Asked Questions
Below are answers to common questions about real estate side hustles.
Can real estate be a side hustle? Is real estate a good side hustle?
Yes, real estate can be a lucrative side hustle. Many people do real estate activities on a part-time basis, which can include short-term rentals, getting a roommate, and more, with lower time commitments.
Is real estate worth it as a side hustle?
Real estate as a side hustle can be worth it if you are looking for more income streams and have an interest in the housing market or real estate. As you probably noticed above, there are many different kinds of side hustles, so the amount of money you can earn or the amount of time you will spend will just depend on the gig you choose.
How can realtors make extra money?
Realtors can make extra money by managing rental properties, taking part in real estate crowdfunding, selling real estate photography services, and more.
Is real estate a good side hustle for teachers?
Yes, real estate can be a good side hustle for teachers. There are many options that may work for a teacher.
For example, some teachers work as real estate agents on the side. This is possible because you can handle listing and selling homes during weekends, breaks, evenings, and over the summer. However, keep in mind that selling homes might pose challenges, as clients may require your full attention during the day, which could clash with your teaching commitments.
You can find more ideas at 36 Best Side Jobs for Teachers To Make Extra Money.
Which licenses might be required to pursue a side hustle in the real estate field?
Depending on the side hustle, certain licenses like a real estate license may be required. For example, to become a real estate agent or home inspector, you’ll need a specific license. However, if you’re looking into just getting a roommate, then you may not need a license. It all just depends on the real estate side gig you are interested in.
How to make money in real estate without ever buying any property?
As you learned above, you don’t need to personally buy or own real estate in order to make money in real estate. You can invest in REITs, become a notary for real estate transactions, include affiliate marketing for real estate products on a blog, and more.
Real Estate Side Hustles – Summary
I hope you enjoyed this article about real estate side hustles.
Picking the right side hustle gig in real estate might feel overwhelming because there are many choices.
Some people might like jobs where you have to do more, like fixing up houses or taking care of Airbnb rentals. Others might prefer making money without doing much, like through REITs or renting out a spare room.
Whatever you’re into or however much money you have to invest, there are probably real estate side business ideas that fit with what you have and what you want to achieve.
What do you think is the best real estate side hustle?
Most people have spent their entire lives living with other people, whether it’s their parents or a roommate. And while it’s great to have company in your home, sometimes the thought of having your own space sounds liberating. You can come and go as you please, you don’t have to worry about another person’s life, you can decorate with your favorite items and colors and relax in your pajamas until noon without being criticized.
However, living alone can also have its pitfalls, including concerns about security and nervousness around feeling lonely. While it’s legitimate to have a fear of living alone, there are ways to overcome it.
Reasons you may fear living alone
All of us at one point or another feel lonely or have had the fear of being alone. However, there are many different reasons people are afraid to live alone ranging from having anxiety, being scared or worrying about loneliness. These fears are amplified if you’re a woman.
However, we’ve got good news. There are several simple steps you can take to help make your abode more secure, boost your comfort level and enjoy your freedom to its fullest. But first, let’s examine some reasons you fear living alone and some symptoms that go along with it.
Mental health conditions and anxiety disorders
Mental health and different forms of anxiety can make the idea of living alone extremely difficult. Whether it’s a specific disorder or a fear from a previous traumatic experience, it’s a good idea to do some research on symptoms of phobias and how to overcome them with treatment.
And don’t worry, you’re not alone. In recent years, studies have shown that Millenials are the loneliest generation next to Gen X and Babyboomers.
Remember, it’s always good to keep an eye on your mental health and phobias and to do so, there are several different online medical resources — such as Healthline Media — that use academic research institutions and do peer-reviewed studies to help you better understand mental disorders and specific phobias. If you live outside the U.S., there are different resources for you, such as Anxiety Care UK.
Here are a few other anxiety disorders and phobias that could lead to feelings of anxiety about living alone.
Monophobia or Autophobia
Many people experience some form of anxiety or specific phobias and one type is Monophobia, or Autophobia, which is the fear of being alone. Autophobia is currently not an official diagnosis by the Diagnostic and Statistical Manual of Mental Disorders fifth edition, which has strict sourcing guidelines. However, it’s currently a subcategory of other phobias.
Understanding autophobia is difficult as this particular phobia can manifest differently from person to person. Some people might experience the fear of being separated from a specific person, while others might experience fear of being home alone or fear the feeling of being lonely.
However, it’s important to note that this phobia is different than just feeling lonely. According to Medical News Today, “Loneliness refers to negative emotions that arise when a person feels that they have too few social interactions or meaningful connections… Having autophobia involves severe anxiety triggered by the idea of spending time alone.”
This form of anxiety can manifest with different physical symptoms. Here are some of the common symptoms of this phobia including heart palpitations, chest pain, sweating, shaking and chills. There are different types of treatment for autophobia and other phobias, some of which include, cognitive behavioral therapy, speaking to a mental health professional and exposure therapy.
Separation anxiety disorder or severe anxiety
Severe anxiety is not the same as a phobia. As mentioned, there are several different anxiety disorders and one of them is separation anxiety. This disorder can come from underlying issues from childhood, such as parental divorce or other childhood experiences that can sometimes lead into adulthood. There are different anxiety symptoms ranging from the fear of leaving home to the fear of leaving a loved one.
As for every other anxiety disorder, there are different anxiety levels that can go anywhere from extreme distress to panic attacks. The good news is there are different forms of treatment that can help reduce your fear caused by separation anxiety symptoms.
If at a certain point you want to work on your specific phobias or fear, find someone who can provide medical advice who knows your medical history. While you can try to self-regulate, there are treatment plans a therapist can help you with to help you overcome fear, including providing medical advice, exposure therapy or avoiding anxiety triggers.
Safety
Even if you don’t have a fear of being alone, safety is a concern when it comes to living alone. It can even give you trouble sleeping or provide doubts about even considering living alone. And, wanting to feel safe isn’t a bad thing, especially when there are situations, such as burglars, that are an actual threat.
If it makes you feel better, you can go to extreme lengths to make yourself feel physically safe in your own home. Consider products such as AddaLock or alarms to make your home feel safer and take away your fear.
Community
Another reason some people don’t like the thought of living alone is the sense of loneliness or a loss of community. We all rely on relationships in our everyday life, whether it be friends or family. These relationships are what make our lives full and interesting. When you feel like you’ve lost that, it’s hard and isolating.
However, just because you live alone doesn’t mean you are alone. Living alone can actually be a great way to cool down and give yourself a place to regroup after being around so many people.
How to help overcome the fear of living alone, or autophobia
Whether you have a fear or phobia of being alone or are just worried about loneliness, there are ways to overcome it. The following 13 strategies will help you get over your fear of being alone.
1. Do small things alone first
If you’re not used to being alone, then it might be a good idea to start doing small things alone first. Take yourself to lunch and enjoy the bliss of eating solo or take yourself to a movie and rejoice in being able to eat the popcorn all by yourself. No matter what kind of activity you pick, this is a great place to learn how to be your own best friend.
2. Get to know your neighbors
Once you get settled in, spend a few days checking out who lives around you. Listen to your gut and introduce yourself to those who seem trustworthy and start to build a relationship. Elderly couples and other women living alone is a good start.
We’re not talking about spending time with them, you don’t even have to become best friends. But having a neighbor to turn to, whether it’s to borrow a cup of sugar or to ask for help in an emergency, will go a long way toward helping you feel comfortable living alone. It would be an added bonus if you ended up with some new friends who would help with loneliness.
3. Keep friends and family in the loop
Whether you’re headed out on a date, going for a run in the park or traveling with your girlfriends, let your friends and family know your plans. You might consider using one of these free personal security apps, which will notify your emergency contacts if you don’t arrive at your destination. Plus, they offer a handful of other security features, like GPS tracking.
4. Keep your eyes wide open
Stay alert, stay alive. This is especially true when you’re entering and exiting your apartment. Be aware of the people in your surroundings and if a person gives you bad feelings, trust it and get to a safe place immediately.
When you’re in the parking lot of your apartment or condominium, keep your keys in hand and walk with confidence and focus. You may consider calling a friend and talking on your phone until you’re safely inside your car or in your home.
5. Purchase a security system
You don’t have to have a phobia or fear to have a security system. Security systems are no longer reserved for sprawling suburban estates. These days, well-respected security companies like Ring, ADT, FrontPoint and Protect America offer effective, budget-friendly security systems that are perfect for apartments, condominiums and lofts.
Opt for a wireless system so you don’t have to drill holes. As a bonus, wireless security systems are notoriously easy to install and when you’re ready to move, many providers will let you take your system with you.
Don’t open the door to anyone who knocks or rings the doorbell. Look through the peephole or ask the person for identification. If you feel uncomfortable opening the door, ask them to return at a later time. Or, you can call a neighbor and ask them to keep you company as you let the person visiting in.
6. Get a four-legged companion to ease autophobia
Nothing beats being greeted by a wagging tail after a long day at work. In addition to warming your heart and curing your loneliness, Fido can deter criminals and help alert you to danger. Of course, you’ll want to check with your landlord to make sure they allow pets before picking up your new furry friend.
7. Don’t blab about what you’re up to
Having some fear is good when it comes to keeping you safe. Whether it’s a friendly cashier or a new acquaintance, be wary of telling anyone you don’t know well that you live alone.
And while it’s tempting to update Facebook or Instagram with your whereabouts, doing so can put you in harm’s way. Avoid social media updates that can clue people into the fact that you live by yourself.
8. Give your home a lived-in look
Letting your mail pile up in the mailbox can tip off criminals you’re not home. If you’re going out of town, ask a trusted neighbor to keep an eye on your apartment. Consider putting interior lights on timers, so your apartment always appears occupied.
9. Cozy up your residence
Living alone is fabulous when you crave solitude, but it can get a bit lonesome. Make your residence a comfortable and lovely space, with pictures of friends and family and sentimental items like a favorite throw blanket or a beloved scented candle to combat loneliness.
Turning up the tunes can boost your spirits and mask those random creaks so you feel more at ease. Of course, you don’t want to upset your neighbors, so keep the volume reasonable. And don’t overdo it in the late hours. Voilà, home sweet home!
10. Pump up your social life
Loneliness is a state of mind more than anything else, but it doesn’t hurt to keep an active social life. Consider hosting a dinner party or inviting a few girlfriends over for a happy hour. Good company and laughter will make your house feel like a home in no time.
11. Lock doors and windows
No one wants to feel like they’re living in a high-security prison, but keeping doors and windows locked can offer you a valuable sense of security and ease your fear of living alone. Many apartments have sliding glass doors, often with subpar locks. Secure a sliding glass door with a metal sliding glass door lock or pole to help secure it. Remember to lock your door when you step out, even if it’s just for picking up the mail or keeping the trash out. It only takes a moment for someone to sneak in, so it’s better safe than sorry.
Before you move in, don’t hesitate to check that all door and window locks work properly. If they don’t, have the landlord fix them before you sign the lease.
12. Get informed about crime trends
Discovering what type of crime is happening in your neighborhood can help you feel more secure in your apartment because you’re more aware. There are a number of free crime-mapping websites, such as CrimeMapping.com, that reveal the location and type of crime, as well as the date of occurrence.
13. Have an exit plan
Create an exit plan in case of an emergency, such as fire, natural disaster or a break-in. If you will be out of your home for a few days, know whom you can stay with. Include your friends in the plan, so they can support you when needed. Keep all the items you want to take with you in the same room to create a calm and controlled setting in an emergency.
Living alone is fun!
Living on your own is a fun, exciting adventure. Make sure to take care of your mental health and make the most of this experience by using these tips to avoid the fear of living alone.
The hope is always that you’ll communicate and work out any problems you have before it ever gets this far, but that doesn’t always happen. Sometimes relationships can become toxic by the end. And when that happens, it’s difficult for both parties involved. Here are the signs your roommate doesn’t like you.
1. Cutting off communication
This is one of the big signs your roommate doesn’t like you. When you two stop speaking, or even worse, when all communication comes in the form of a terse text message or a sticky note on the fridge, that’s good indication the relationship is either dead or dying.
2. What a mess
If you’re sharing a home, you need to share the responsibilities of maintaining that home. Sometimes it means maintaining the water heater. But it always means keeping your home neat and tidy. A messy desk is one thing (the sign of a genius, even!). And you can forgive a messy room. But not so much when that mess creeps out of your bedroom and into your shared space like the bathrooms, living room or worse, the kitchen. Keep your kitchens clean!
3. Who ate my creamy all-natural almond butter?
Is your roommate eating your food, deleting your shows from the DVR or even wearing your clothes without your permission? Talk it out before they delete all those reruns of “Say Yes To The Dress” you’ve been saving for a rainy Sunday.
4. The invisible roommate
If your roommate is never there, it could mean one of two things: Either they lead a busy and full life and aren’t home much or they’re not home much because they’re actively avoiding you.
5. They follow the trail
Can your roommate track your movements by the trail of chaos and mess you leave behind? Shoes by the door, clothes on the couch, dirty pots and pans on the stove and a messy bathroom all lead to one riled up roomie.
6. Feeling your inner Felix Unger
On the other side of the coin, if you’re a neat freak who disinfects the remote and follows people around with a dustpan while reminding them to use a coaster, you won’t win any popularity contests, either. Being neat is great. Being a neat freak isn’t.
7. Tummy time!
Do you hang out all day sitting naked on the couch? Do you work and sleep in your roommate’s bed? These behaviors are acceptable only if you’re a dog. Are you a dog? Bad roommate! Very bad roommate!
8. Is it the first already?
Pay your half of the rent on time. Every month. No exceptions. If you come up short, or if you’ll need help paying your half, tell your roommate early. Waiting ’til the last minute or even worse, flaking out altogether, is how you make a roommate an ex-roommate.
9. Do you smell that?
Can you remember the last time it was “your turn” to take out the trash? If you’re stomping on the trash trying to pack it down, odds are you’re not winning any popularity contests.
10. TMI
There’s confiding, and there’s chronic oversharing. Sure, as roommates, you’re expected to share some stuff, but not everything. Some details are better kept to yourself.
11. That looks fun…I guess
No one expects you to have all of the same interests. You may have some stuff in common. That’s part of the reason you’re living together. But if you’re putting down someone’s interests or insulting their favorite reality show, that’s just a jerk move.
12. Overnight guests
No one says you can’t have a partner spend the night, but if your significant other is over a lot (like A LOT), be discreet and respectful. Being kept awake all night by the headboard banging against your shared wall won’t win you any popularity contests.
13. Oh, did I wake you?
Just because you “don’t get tired until late” doesn’t mean anyone living in your home should have to stay awake. It’s fine if one of you is a night owl and the other is an early bird. But keeping the lights on and blasting the TV at 3 a.m. on a Wednesday isn’t cool.
14. Occupado!
Hogging the bathroom, using all the hot water, leaving your makeup all over the vanity or not cleaning out the sink after you shave isn’t only inconsiderate and gross. It’s also just bad hygiene. And if you use all the toilet paper, replace the dang roll. It’s not hard!
15. Your only habits are bad habits
If your roommate isn’t a smoker and complains the furniture and the carpet smells like your cigarettes, it’s a sign your roommate doesn’t like you. You need to take your ashtray outside or take your stuff to another house.
16. Vicious recycle
If your city or town collects recycling, you need to sort all your recyclables. Paper and plastic in one bin. Glass in another. If you think, “Eh, they’ll do it when they collect it,” when you bring everything out to the curb (you ARE bringing out the recycling, right?), you’re wrong. They won’t. And it’s not winning you any friends.
17. Molting and revolting
Personal hygiene is for the bathroom. Not the living room or the kitchen. So, when your hair gets all over the furniture and floors, no one thinks of it as a reminder of your presence. Also, no one wants to see you clipping your toenails on the coffee table. Take that mess to your room!
18. It’s not my fault!
And nothing ever is. If you’re not taking responsibility for your own actions, your roommate will want to take your keys back. Owning your actions is a part of adulthood, and hiding behind excuses and sob stories is what children do. The milk didn’t go bad because it was angry at you. It went bad because you left it on the kitchen table and it sat out all day.
19. I’m sorry you feel that way
You’re quick with a non-apology apology. When you finally realize you did something wrong, do you accept the consequences of your actions and try to make peace? Or, do you say what you think the other person wants to hear?
20. So funny I forgot to laugh
You think you’re hilarious, so why does every joke land with a silent thud? If every attempt at levity results in an indifferent eye roll, it might be time to take a step back.
21. Huh? You say something?
Maybe you don’t have a terrible roommate. Maybe they even try to include you in events and activities, inviting you to come along tubing down a lazy river or to an improv show. And maybe while you appreciate the gesture, it’s not really your scene. But instead of saying that, you ignore their invitations and sit on your couch staring at your phone. If you’re actively ignoring and not engaging, those offers of friendship will dry up.
22. Au naturale
The human body is a beautiful thing. But your roommate doesn’t want to see yours. Wear a towel or a robe when you’re coming out of the bathroom. And when there’s a roommate situation happening, pants are NEVER optional.
23. What’s that in your mouth? Drop it! Drop it!
Sometimes roommates come as a team with a pet. But when there’s an animal in the house, there should be rules and repercussions. If your dog got into your roommate’s bathroom and destroyed everything, you’re responsible. And if you don’t take responsibility, you’ll have to take your stuff and go.
24. You wouldn’t like me when I’m angry
You won’t get along with everyone you meet. And not all people are a good match. But if your roomie gets easily annoyed or angry, it’s a good sign your roommate doesn’t like you. Why live with someone who brings out the worst in you? Why bring out the worst in each other?
25. You’re just different people
Sometimes in life, you’re going to meet people you just don’t like and who don’t like you. Neither of you was offensive or rude or inconsiderate. Not everyone was meant to live together. And some relationships are better off being short term arrangements and ending peacefully.
How to handle roommate problems
If you see signs your roommate doesn’t like you, try to talk it out calmly and respectfully.
Roommates will bicker and annoy each other. It’s bound to happen in any dynamic. And no one is saying you have to be best friends. Most of us weren’t that lucky in the freshman dorms. But that doesn’t mean you can’t find some things to bond over…like a peaceful home, bad reality TV and not leaving dirty dishes in the sink overnight.
Many people are turning to the option of living with a roommate to help balance out the financial strain of rental prices. Make sure you find the right one.
Since living with someone else can turn out as a pretty terrible experience sometimes, it’s important to vet out your roommates beforehand to avoid the bad ones. We’ve all heard the horror stories of piles of dirty dishes, the garbage that’s never taken out and late-night weekday parties. You may have even experienced these frustrations first-hand.
If you haven’t looked for one before, you may wonder how to find a roommate. Fortunately, with social networks and technology, there are plenty of roommate finder apps to help your search. Here is a list of our favorites and tips for identifying what is the best roommate finder app and websites for you.
1. Roomi
Roomi uses an algorithm to match you up with a roommate that would best be suited for you. You answer questions about yourself, what you’re looking for in an ideal roommate and Roomi then works its magic to pair two matches together.
Roomi has users do quick background checks and gives the option to link social media accounts so both roommates can feel more confident and secure in the process. Once you’re ready to message a potential “roomi,” you can do so through the app so you don’t have to exchange any personal contact information until you’re ready.
2. Roomster
Roomster has listings in more than 192 countries and 18 languages. It connects potential roommates using personality traits, keyword searches and interests to help you find your ideal match.
Members can match based on testimonials from friends, hobbies, interests and questions answered through their profiles. Roomster allows users to link their social accounts, so this app tends to have more data to find the perfect match. Once you find a potential roommate that looks promising, you can connect with them through the Roomster mailbox.
3. RoomEasy
RoomEasy is kind of like the Tinder of roommate apps. With RoomEasy, you create a profile, add personal description tags from their system and browse roommate and apartment listings. You can also connect your Facebook profile and see if your potential new roommate and you have any mutual friends.
Once you find something that interests you, you’ll “like” your favorite places or potential roommates’ profiles, and if they “like” yours, you’ll be matched. Once you’re matched, you can connect through the chat app.
4. SpareRoom
SpareRoom claims it is the busiest roommate app, with a roommate match being found every three minutes on its platform. What really sets SpareRoom apart from some other roommate apps is that it has a team of real people that screen each and every ad on SpareRoom so you can ensure listings are safe and verified.
This app even hosts speed room-mating events where you can meet up with people in your community and go through a roommate speed date-like process to see if you find someone you mix well with.
5. BunkUp
BunkUp is a pretty cool app that will help you find a roommate and an apartment. With BunkUp, much like the other apps, you fill out details about yourself and what you’re looking for in a roommate and are you’re matched or “BunkedUp.”
You can look for someone to move into your open space, move into a vacant room someone else is offering or find a new roommate to look for an entirely new apartment with. BunkUp even has agents that will help you find a new apartment.
6. Circle
Circle allows you to create a profile as either someone looking for a roommate to move into your place or as someone searching for a new place to live. It shows your potential roommates based on your profile and specifications.
It even “verifies” users, which means that a user has an authenticated driver’s license connected to their profile and they’ve passed a background check. Circle always shows you the “verified” potential roommates before all others, so you know that those who show up higher on your list are real people that aren’t trying to pull a scam. You’ll also be able to chat with potential roommates and ask questions to see who you get along with best to create a positive living environment.
7. Cirtru
Website only
Cirtru has truly adapted to the digital age. It allows users to take virtual tours within the platform so you can check it out safely from wherever you are. This makes it easy to both find a roommate to fill a vacancy in your home or look for an empty room to move into.
Cirtru is especially useful for animal lovers and owners as it allows you to set your preferences based on many criteria, including pet-friendly rentals and pet-welcoming roommates.
8. RoomieMatch
Website only
RoomieMatch is all about safety. It uses human “Scam Busters” to review submissions and listings, including an IP address location check to share the actual city in which people are, so you won’t deal with many scammers. Plus, your personal info is stored offline, instead of inline, so it can’t be accessed by online hackers and spammers
As a user, you can set your RoomieMatches based on gender, sexual orientation, lifestyle choices (like smoking/non-smoking), age and pet-friendliness.
9. Diggz
Website only
Diggz matches you with roommates based on a variety of factors connected with your profile, like your lifestyle, personality and personal preferences. You’ll be able to “like” other profiles that you’d be interested in rooming with. It’s similar to dating apps where you only talk to people that you “like” and who “like” you back.
Diggz works for almost any situation, whether you’re looking for a new roommate to move in with you, you want to move in with someone else or you want to search for a new place with a new roommate.
10. Roomaters
Roomaters uses more than the preferences you set for finding a roommate. Users take a personality test that helps when matching them with potential roommates.
Plus, you’ll get to input your interests, hobbies and a bit about what kind of roommate you are (social, introverted, messy, neat freak, etc.). So whether you like music, art, rock climbing or superhero movies, you can find someone you’ll enjoy living with.
Ask the right questions before sharing a living space
No matter where you source your new roomie, it’s essential to pose some hard-hitting questions aimed at gaining insights into their way of life and financial well-being. Here are several queries to initiate the conversation:
What qualities are you seeking in a roommate?
Are you thinking about a month-to-month rental arrangement, or are you leaning towards a longer commitment, such as a year?
Could you provide an overview of your typical work hours?
Do you share your living space with any pets?
What are your usual waking and sleeping hours?
How do you typically spend your leisure time?
Are there frequent visitors in your social circle? If so, who usually comes around?
Is smoking or alcohol consumption part of your routine?
Do you have any significant food or animal-related allergies?
Are you planning to bring along any furniture items? Do you have a need for parking space, perhaps a garage? What is your approach to maintaining cleanliness and tidiness around the house?
Roommate finder apps pair you with the right person
With so many roommate finder apps out there, it’s easier than ever to locate a perfect roommate — or at least a good one. Gone are the days of blindly showing up at someone’s place or finding a creepy classified ad in the paper. If you’re looking for the ideal roommate, give one of the above apps or sites a try.
…And Rent. pairs you with the right apartment
Maybe you already know who your potential roommate will be but you’re still looking at apartments together. We can help with that, too. Just type in your target city to get started, then filter by price range, pet-friendly apartments and more to help you decide.
Morgen Henderson is a writer who grew up in Utah. She lived in the Dominican Republic for a year and a half, where she was involved in humanitarian service. Some of Morgen’s work has appeared in State of Digital, The Next Scoop and TechPatio. In her free time, she loves to travel, bake, master DIY projects and improve her Spanish skills.
Imagine slashing your monthly mortgage payment to zero or, better yet, turning a profit from the very place you call home. This isn’t a daydream for the financially savvy few; it’s the reality of house hacking.
Through the eyes of those who’ve made it work, house hacking transforms your living situation into an opportunity for financial freedom. From young professionals to families, people across the country are finding that their biggest expense—housing—can actually become their biggest asset.
What is house hacking?
House hacking is a strategy that involves purchasing a primary residence with the intention of living in one part while renting out the rest as a rental property. This could mean buying a multifamily home and living in one unit, renting out the others, or even renting out spare bedrooms in a single-family home. The rent collected from tenants goes towards the mortgage and other property-related expenses, potentially allowing the owner to live for free or even make a profit.
A Spectrum of Possibilities
The beauty of house hacking lies in its flexibility. Here are a few scenarios to illustrate its range:
The Multi-Unit Maven: Alex buys a duplex, lives in one unit, and rents out the other. The rent from the second unit covers the mortgage, meaning Alex lives mortgage-free.
The Single-Family Sharer: Jamie purchases a four-bedroom house, occupies one room, and rents out the other three. The rental income covers all housing costs.
The Basement Dweller: Casey acquires a home with a separate basement apartment. Living in the basement, Casey rents out the main floor, using the rent to pay the mortgage and save for future investments.
These examples highlight how you can house hack to adapt to different housing markets, personal living preferences, and financial goals. Whether you’re drawn to the idea of living rent-free, eager to dive into real estate investment, or looking for a way to reduce your housing expenses, house hacking offers a practical path to achieving your objectives.
Tailoring the Strategy to Your Lifestyle
Choosing the right house hacking approach depends on your lifestyle, financial goals, and how comfortable you are sharing your space. Considerations include the type of investment property, your desired level of interaction with tenants, and local market conditions. The key is to find a balance that works for you, ensuring your home remains a comfortable place for you while optimizing its income potential.
By embracing the concept of house hacking, you can transform your approach to homeownership, turning a typically expensive part of your life into a source of income. With careful planning and a bit of creativity, your journey towards financial independence might just start at your own front door.
Benefits of House Hacking
House hacking isn’t just a real estate strategy; it’s a lifestyle adjustment that opens doors to numerous financial and personal benefits. Let’s dive into the advantages, supported by real-world examples and data, to understand why so many are turning to house hacking as a way to improve their financial health.
Financial Freedom Faster
One of the most compelling benefits of house hacking is the accelerated path it provides toward financial freedom. By significantly reducing or eliminating one of life’s largest expenses—housing—you can allocate funds towards paying down debt, investing, or saving for future goals.
For instance, consider the case of Sam, who purchased a triplex, lived in one unit, and rented out the other two. The rental income not only covered the mortgage but also allowed Sam to save an additional $1,000 a month. This extra savings contributed to Sam’s ability to retire early, a dream that seemed unreachable before house hacking.
Access to Better Financing Options
House hackers often enjoy more favorable financing terms. Owner-occupants can qualify for lower down payments and better interest rates compared to traditional investment property loans.
For example, an FHA loan might require as little as 3.5% down for a multi-unit property, provided one of the units will be owner-occupied. This lower barrier to entry makes real estate investment accessible to more people. Data shows that owner-occupied financing options can save homeowners thousands of dollars over the life of a loan, making the investment in house hacking even more appealing.
Learning the Ropes of Real Estate Investing
House hacking serves as an invaluable hands-on education in real estate investing and property management. This benefit is difficult to quantify, but incredibly valuable.
Take Angela, who started her real estate journey through house hacking. By managing her duplex, Angela gained firsthand experience in screening tenants, handling maintenance issues, and understanding the financial aspects of real estate investments. This knowledge empowered her to expand her portfolio and become a full-time real estate investor.
Tax Advantages
House hacking can also lead to potential tax deductions, including mortgage interest, property taxes, and expenses related to renting out part of your home. These deductions can significantly lower your taxable income.
For example, let’s say John allocates 50% of his property’s square footage to tenant use. John can deduct 50% of the mortgage interest, property taxes, and maintenance expenses on his tax return, providing a substantial financial benefit at the end of the fiscal year.
Building Wealth Over Time
House hacking stands out not just for its immediate financial relief on living expenses but also for its profound long-term impact on wealth accumulation. By strategically applying rental income towards mortgage payments, those who house hack effectively build equity without dipping into personal savings. This method of leveraging other people’s money accelerates wealth building, offering a tangible path to increasing net worth over the years.
Instead of allocating a significant portion of their income towards housing, house hackers can redirect these funds into savings, investments, or debt reduction. This shift not only enhances financial security but also amplifies the potential for future financial growth
While outcomes can vary based on numerous factors like market dynamics and property management, the foundational strategy of house hacking provides a compelling approach to financial independence and wealth building.
Case Studies That Inspire
The real magic of house hacking comes alive through the stories of those who’ve embraced it. From the young professional who used house hacking to eliminate student debt to the couple that built a real estate empire starting with a single house hack, these narratives underscore the transformative power of this strategy.
By analyzing their journeys, we uncover a common thread—a strategic approach to living and real estate investing that turns conventional wisdom on its head and opens up new possibilities for financial independence.
Exploring Your Options: Five House Hacking Strategies
So, now that you understand what housing hacking is and what the benefits are, how do you get started? Well, depending on your goals, here are four different ways you can go about it.
1. Rent out a portion of your home
The most common way to get started house hacking is by buying a home and then renting out a portion of it. For instance, if you bought a two-story home, you could rent out the downstairs. Or, if you buy a home with a finished basement, you could live upstairs and rent out the basement.
This house hacking strategy is good in low-cost living areas because the rental income could actually cover your monthly mortgage payments. However, this may not work out in parts of the country that have a high cost of living.
2. Rent out your home entirely
If renting out a portion of your home isn’t enough to move the needle financially, then you could try renting your entire house. This could be a suitable option for anyone who is young and able to find an alternative, affordable living situation.
For instance, if you could temporarily live in a trailer or rent an apartment with a roommate, you could rent out your home for more money. This would allow you to pay off the house and cover your monthly rent payments.
3. Rent out by the room
If you’re just looking for a little extra money every month and don’t want to sacrifice the majority of your home, you could just try renting out one room. For instance, if you have a large four-bedroom home, you could rent out one room.
This gives you some extra money to put toward your mortgage payments, but you still get to enjoy the benefits of being a homeowner.
4. Rent out an additional unit
Many of the options on this list are ideal for young, single people. But what if you’re married and have a family? In that case, the idea of living with full-time roommates might not interest you.
If so, you could buy a multifamily property and rent out the other units. You could also rent out units attached to your home. This could be a unit that either comes with the house or one that you build yourself.
This will take some effort because you’ll need to fix it up and turn it into a space someone would want to rent. But if you have the interest, this could be the best way to house hack your primary residence while still protecting your family’s personal space.
5. Do a live-in flip
Live-in flipping is a popular real estate investment strategy where the investor purchases a residential property and lives in it while making improvements to increase the property’s value. The investor will then resell the property at a higher price than they originally paid for it, resulting in a profit. This strategy is often used by investors who are looking to build equity quickly.
Living in the property allows you to get to know the neighborhood, research the local market, and avoid paying rent while working on the property. The improvements you make can include anything from painting and landscaping to remodeling the interior of the home.
Legal and Tax Implications of House Hacking
Venturing into house hacking offers financial benefits but also introduces a set of legal and tax considerations that are crucial for a successful strategy. Here’s a concise overview to guide you through these aspects:
Local Zoning Laws
Zoning Requirements: Check your local zoning ordinances to ensure that your house hacking plans comply with regulations regarding rental properties, especially if you intend to modify a single-family home into a multi-unit property.
Permits: Obtain any necessary permits for renovations or conversions to avoid legal issues and ensure the safety and legality of your property for tenants.
Tax Benefits and Liabilities
Rental Income Reporting: Understand that rental income must be reported on your tax returns. Proper documentation of income and expenses is essential for accurate reporting.
Deductible Expenses: Familiarize yourself with what can be deducted, such as mortgage interest, property taxes, maintenance costs, insurance, and depreciation. These deductions can significantly reduce your taxable income.
Capital Gains: If you sell your property for a profit, be aware of capital gains tax. Living in the property for two of the five years before selling can qualify you for an exclusion on capital gains tax up to a certain limit.
Compliance with Landlord-Tenant Laws
Legal Responsibilities: As a landlord, you’ll need to adhere to state and federal laws regarding tenant rights, fair housing, and safety standards. This includes understanding eviction procedures, security deposit regulations, and the requirement for habitable living conditions.
Proper Reporting and Documentation
Keeping Records: Maintain meticulous records of all financial transactions, leases, and communications with tenants. This documentation will be vital for tax purposes and in the event of legal disputes.
Professional Advice
Consultation: Given the complexity of tax laws and real estate regulations, consulting with a tax professional and a real estate attorney can provide tailored advice and ensure you’re maximizing your benefits while minimizing legal risks.
House Hacking Checklist: Preparing for Success
House hacking requires careful planning and consideration. To ensure you’re well-prepared, we’ve compiled a comprehensive checklist. This guide will help you work through the initial stages, make informed decisions, and set you up for a successful house hacking experience.
1. Assess Your Financial Readiness
Evaluate Your Financial Health: Check your credit score, debt-to-income ratio, and savings. Your financial stability will affect loan approval and interest rates.
Budget for Upfront Costs: Calculate potential down payments, closing costs, renovation expenses, and an emergency fund for unexpected repairs.
2. Understand Financing Options
Research Loan Types: Familiarize yourself with different mortgage options, including FHA loans, conventional loans, and VA loans, if applicable.
Pre-Approval: Before house hunting, get pre-approved for a mortgage to understand how much you can afford and demonstrate your seriousness to sellers.
3. Choose the Right Property
Analyze the Potential ROI: When selecting a property, assess key return on investment (ROI) metrics, including cash flow, cash-on-cash return, net operating income (NOI), and cap rate. These metrics will help you understand the financial performance and potential profitability of the property.
Location: Select a location with high rental demand, considering factors like proximity to schools, employment centers, and public transportation.
Property Type: Decide whether a single-family home, multifamily property, or another type of property, suits your goals and budget best.
Condition: Be realistic about the amount of work you can handle. A fixer-upper may offer a higher return but requires more investment upfront.
4. Plan for Landlord Responsibilities
Understand Landlord-Tenant Laws: Research local laws regarding landlord responsibilities, eviction processes, and tenant rights.
Create a Lease Agreement: Draft a clear and comprehensive lease agreement that outlines rent, rules, and responsibilities. Consider seeking the advice of a legal professional.
5. Prepare for Property Management
Tenant Screening: Develop a process for screening tenants, including credit and background checks, to ensure reliability and compatibility.
Maintenance and Repairs: Plan for regular maintenance and emergency repairs. Consider whether you’ll handle repairs yourself or hire professionals.
6. Consider Privacy and Lifestyle Changes
Set Boundaries: Think about how you’ll maintain privacy and manage shared spaces, especially if renting out part of your primary residence.
Adjust Expectations: Living with tenants or managing a rental property can bring challenges. Be prepared for a lifestyle adjustment.
7. Develop an Exit Strategy
Long-Term Goals: Consider your long-term real estate and financial goals. How does house hacking fit into your broader investment strategy?
Resale Considerations: Keep potential resale value in mind when choosing and maintaining your property. Making wise improvements can enhance future profitability.
8. Continuous Learning
Educate Yourself: Real estate and property management are complex fields. Continually seek knowledge through books, podcasts, and networking with experienced investors.
This checklist is your starting point for a thoughtful and structured approach to house hacking. By addressing each item, you’re laying a solid foundation for your real estate investment journey, poised to navigate the challenges and reap the rewards of this strategic endeavor.
Bottom Line
House hacking is a creative way to pay off your mortgage, improve your monthly cash flow, and gain real estate experience. You can begin house hacking as a way to earn a little extra cash every month, or you could treat it like a long-term real estate investment strategy. You can put as much or as little into it as you want.
Just make sure you do your due diligence before getting started. Make any necessary adjustments to the house, choose your tenants carefully, and take your responsibilities as a landlord seriously. This allows you to make the most of your house hacking experience.
Imagine slashing your monthly mortgage payment to zero or, better yet, turning a profit from the very place you call home. This isn’t a daydream for the financially savvy few; it’s the reality of house hacking.
Through the eyes of those who’ve made it work, house hacking transforms your living situation into an opportunity for financial freedom. From young professionals to families, people across the country are finding that their biggest expense—housing—can actually become their biggest asset.
What is house hacking?
House hacking is a strategy that involves purchasing a primary residence with the intention of living in one part while renting out the rest as a rental property. This could mean buying a multifamily home and living in one unit, renting out the others, or even renting out spare bedrooms in a single-family home. The rent collected from tenants goes towards the mortgage and other property-related expenses, potentially allowing the owner to live for free or even make a profit.
A Spectrum of Possibilities
The beauty of house hacking lies in its flexibility. Here are a few scenarios to illustrate its range:
The Multi-Unit Maven: Alex buys a duplex, lives in one unit, and rents out the other. The rent from the second unit covers the mortgage, meaning Alex lives mortgage-free.
The Single-Family Sharer: Jamie purchases a four-bedroom house, occupies one room, and rents out the other three. The rental income covers all housing costs.
The Basement Dweller: Casey acquires a home with a separate basement apartment. Living in the basement, Casey rents out the main floor, using the rent to pay the mortgage and save for future investments.
These examples highlight how you can house hack to adapt to different housing markets, personal living preferences, and financial goals. Whether you’re drawn to the idea of living rent-free, eager to dive into real estate investment, or looking for a way to reduce your housing expenses, house hacking offers a practical path to achieving your objectives.
Tailoring the Strategy to Your Lifestyle
Choosing the right house hacking approach depends on your lifestyle, financial goals, and how comfortable you are sharing your space. Considerations include the type of investment property, your desired level of interaction with tenants, and local market conditions. The key is to find a balance that works for you, ensuring your home remains a comfortable place for you while optimizing its income potential.
By embracing the concept of house hacking, you can transform your approach to homeownership, turning a typically expensive part of your life into a source of income. With careful planning and a bit of creativity, your journey towards financial independence might just start at your own front door.
Benefits of House Hacking
House hacking isn’t just a real estate strategy; it’s a lifestyle adjustment that opens doors to numerous financial and personal benefits. Let’s dive into the advantages, supported by real-world examples and data, to understand why so many are turning to house hacking as a way to improve their financial health.
Financial Freedom Faster
One of the most compelling benefits of house hacking is the accelerated path it provides toward financial freedom. By significantly reducing or eliminating one of life’s largest expenses—housing—you can allocate funds towards paying down debt, investing, or saving for future goals.
For instance, consider the case of Sam, who purchased a triplex, lived in one unit, and rented out the other two. The rental income not only covered the mortgage but also allowed Sam to save an additional $1,000 a month. This extra savings contributed to Sam’s ability to retire early, a dream that seemed unreachable before house hacking.
Access to Better Financing Options
House hackers often enjoy more favorable financing terms. Owner-occupants can qualify for lower down payments and better interest rates compared to traditional investment property loans.
For example, an FHA loan might require as little as 3.5% down for a multi-unit property, provided one of the units will be owner-occupied. This lower barrier to entry makes real estate investment accessible to more people. Data shows that owner-occupied financing options can save homeowners thousands of dollars over the life of a loan, making the investment in house hacking even more appealing.
Learning the Ropes of Real Estate Investing
House hacking serves as an invaluable hands-on education in real estate investing and property management. This benefit is difficult to quantify, but incredibly valuable.
Take Angela, who started her real estate journey through house hacking. By managing her duplex, Angela gained firsthand experience in screening tenants, handling maintenance issues, and understanding the financial aspects of real estate investments. This knowledge empowered her to expand her portfolio and become a full-time real estate investor.
Tax Advantages
House hacking can also lead to potential tax deductions, including mortgage interest, property taxes, and expenses related to renting out part of your home. These deductions can significantly lower your taxable income.
For example, let’s say John allocates 50% of his property’s square footage to tenant use. John can deduct 50% of the mortgage interest, property taxes, and maintenance expenses on his tax return, providing a substantial financial benefit at the end of the fiscal year.
Building Wealth Over Time
House hacking stands out not just for its immediate financial relief on living expenses but also for its profound long-term impact on wealth accumulation. By strategically applying rental income towards mortgage payments, those who house hack effectively build equity without dipping into personal savings. This method of leveraging other people’s money accelerates wealth building, offering a tangible path to increasing net worth over the years.
Instead of allocating a significant portion of their income towards housing, house hackers can redirect these funds into savings, investments, or debt reduction. This shift not only enhances financial security but also amplifies the potential for future financial growth
While outcomes can vary based on numerous factors like market dynamics and property management, the foundational strategy of house hacking provides a compelling approach to financial independence and wealth building.
Case Studies That Inspire
The real magic of house hacking comes alive through the stories of those who’ve embraced it. From the young professional who used house hacking to eliminate student debt to the couple that built a real estate empire starting with a single house hack, these narratives underscore the transformative power of this strategy.
By analyzing their journeys, we uncover a common thread—a strategic approach to living and real estate investing that turns conventional wisdom on its head and opens up new possibilities for financial independence.
Exploring Your Options: Five House Hacking Strategies
So, now that you understand what housing hacking is and what the benefits are, how do you get started? Well, depending on your goals, here are four different ways you can go about it.
1. Rent out a portion of your home
The most common way to get started house hacking is by buying a home and then renting out a portion of it. For instance, if you bought a two-story home, you could rent out the downstairs. Or, if you buy a home with a finished basement, you could live upstairs and rent out the basement.
This house hacking strategy is good in low-cost living areas because the rental income could actually cover your monthly mortgage payments. However, this may not work out in parts of the country that have a high cost of living.
2. Rent out your home entirely
If renting out a portion of your home isn’t enough to move the needle financially, then you could try renting your entire house. This could be a suitable option for anyone who is young and able to find an alternative, affordable living situation.
For instance, if you could temporarily live in a trailer or rent an apartment with a roommate, you could rent out your home for more money. This would allow you to pay off the house and cover your monthly rent payments.
3. Rent out by the room
If you’re just looking for a little extra money every month and don’t want to sacrifice the majority of your home, you could just try renting out one room. For instance, if you have a large four-bedroom home, you could rent out one room.
This gives you some extra money to put toward your mortgage payments, but you still get to enjoy the benefits of being a homeowner.
4. Rent out an additional unit
Many of the options on this list are ideal for young, single people. But what if you’re married and have a family? In that case, the idea of living with full-time roommates might not interest you.
If so, you could buy a multifamily property and rent out the other units. You could also rent out units attached to your home. This could be a unit that either comes with the house or one that you build yourself.
This will take some effort because you’ll need to fix it up and turn it into a space someone would want to rent. But if you have the interest, this could be the best way to house hack your primary residence while still protecting your family’s personal space.
5. Do a live-in flip
Live-in flipping is a popular real estate investment strategy where the investor purchases a residential property and lives in it while making improvements to increase the property’s value. The investor will then resell the property at a higher price than they originally paid for it, resulting in a profit. This strategy is often used by investors who are looking to build equity quickly.
Living in the property allows you to get to know the neighborhood, research the local market, and avoid paying rent while working on the property. The improvements you make can include anything from painting and landscaping to remodeling the interior of the home.
Legal and Tax Implications of House Hacking
Venturing into house hacking offers financial benefits but also introduces a set of legal and tax considerations that are crucial for a successful strategy. Here’s a concise overview to guide you through these aspects:
Local Zoning Laws
Zoning Requirements: Check your local zoning ordinances to ensure that your house hacking plans comply with regulations regarding rental properties, especially if you intend to modify a single-family home into a multi-unit property.
Permits: Obtain any necessary permits for renovations or conversions to avoid legal issues and ensure the safety and legality of your property for tenants.
Tax Benefits and Liabilities
Rental Income Reporting: Understand that rental income must be reported on your tax returns. Proper documentation of income and expenses is essential for accurate reporting.
Deductible Expenses: Familiarize yourself with what can be deducted, such as mortgage interest, property taxes, maintenance costs, insurance, and depreciation. These deductions can significantly reduce your taxable income.
Capital Gains: If you sell your property for a profit, be aware of capital gains tax. Living in the property for two of the five years before selling can qualify you for an exclusion on capital gains tax up to a certain limit.
Compliance with Landlord-Tenant Laws
Legal Responsibilities: As a landlord, you’ll need to adhere to state and federal laws regarding tenant rights, fair housing, and safety standards. This includes understanding eviction procedures, security deposit regulations, and the requirement for habitable living conditions.
Proper Reporting and Documentation
Keeping Records: Maintain meticulous records of all financial transactions, leases, and communications with tenants. This documentation will be vital for tax purposes and in the event of legal disputes.
Professional Advice
Consultation: Given the complexity of tax laws and real estate regulations, consulting with a tax professional and a real estate attorney can provide tailored advice and ensure you’re maximizing your benefits while minimizing legal risks.
House Hacking Checklist: Preparing for Success
House hacking requires careful planning and consideration. To ensure you’re well-prepared, we’ve compiled a comprehensive checklist. This guide will help you work through the initial stages, make informed decisions, and set you up for a successful house hacking experience.
1. Assess Your Financial Readiness
Evaluate Your Financial Health: Check your credit score, debt-to-income ratio, and savings. Your financial stability will affect loan approval and interest rates.
Budget for Upfront Costs: Calculate potential down payments, closing costs, renovation expenses, and an emergency fund for unexpected repairs.
2. Understand Financing Options
Research Loan Types: Familiarize yourself with different mortgage options, including FHA loans, conventional loans, and VA loans, if applicable.
Pre-Approval: Before house hunting, get pre-approved for a mortgage to understand how much you can afford and demonstrate your seriousness to sellers.
3. Choose the Right Property
Analyze the Potential ROI: When selecting a property, assess key return on investment (ROI) metrics, including cash flow, cash-on-cash return, net operating income (NOI), and cap rate. These metrics will help you understand the financial performance and potential profitability of the property.
Location: Select a location with high rental demand, considering factors like proximity to schools, employment centers, and public transportation.
Property Type: Decide whether a single-family home, multifamily property, or another type of property, suits your goals and budget best.
Condition: Be realistic about the amount of work you can handle. A fixer-upper may offer a higher return but requires more investment upfront.
4. Plan for Landlord Responsibilities
Understand Landlord-Tenant Laws: Research local laws regarding landlord responsibilities, eviction processes, and tenant rights.
Create a Lease Agreement: Draft a clear and comprehensive lease agreement that outlines rent, rules, and responsibilities. Consider seeking the advice of a legal professional.
5. Prepare for Property Management
Tenant Screening: Develop a process for screening tenants, including credit and background checks, to ensure reliability and compatibility.
Maintenance and Repairs: Plan for regular maintenance and emergency repairs. Consider whether you’ll handle repairs yourself or hire professionals.
6. Consider Privacy and Lifestyle Changes
Set Boundaries: Think about how you’ll maintain privacy and manage shared spaces, especially if renting out part of your primary residence.
Adjust Expectations: Living with tenants or managing a rental property can bring challenges. Be prepared for a lifestyle adjustment.
7. Develop an Exit Strategy
Long-Term Goals: Consider your long-term real estate and financial goals. How does house hacking fit into your broader investment strategy?
Resale Considerations: Keep potential resale value in mind when choosing and maintaining your property. Making wise improvements can enhance future profitability.
8. Continuous Learning
Educate Yourself: Real estate and property management are complex fields. Continually seek knowledge through books, podcasts, and networking with experienced investors.
This checklist is your starting point for a thoughtful and structured approach to house hacking. By addressing each item, you’re laying a solid foundation for your real estate investment journey, poised to navigate the challenges and reap the rewards of this strategic endeavor.
Bottom Line
House hacking is a creative way to pay off your mortgage, improve your monthly cash flow, and gain real estate experience. You can begin house hacking as a way to earn a little extra cash every month, or you could treat it like a long-term real estate investment strategy. You can put as much or as little into it as you want.
Just make sure you do your due diligence before getting started. Make any necessary adjustments to the house, choose your tenants carefully, and take your responsibilities as a landlord seriously. This allows you to make the most of your house hacking experience.
Inside: Learn what 11 an hour is how much a year, month, and day. Plus tips to budget your money. Don’t miss the ways to increase your income.
We are going to under the cover and discover $11 an hour is how much per year.
For most Americans, this is hovering near minimum wage.
Let’s get this straight… This is not a livable wage.
If you are in high school or college and have support from your parents, then this is great spending money for you.
However, if you are making it on your own, $11 per hour will not make ends meet each month.
For most people, being at minimum wage is common and the goal is to make your way up the payscale and quickly!
In this post, we’re going to detail exactly what $11 an hour is how much a year. Also, we are going to break it down to know how much is made per month, bi-weekly, per week, and daily.
That will help you immensely with how you spend your money. Because too many times the hard-earned cash is brought home, but there is no actual plan for how to spend that money.
When living close to minimum wage, you must know how to manage money wisely.
More than likely, you are living paycheck to paycheck and struggling to survive to the next paycheck. Take a deep breath and make this minimum wage just a season.
The ultimate goal is to make the most of your hourly wage with inspirations to make more money.
If that is something you want to do, then keep reading. You are in the right place.
$11 an Hour is How Much a Year?
When we ran all of our numbers to figure out how much is $11 per hour is as annual salary, we used the average working day of 40 hours a week.
40 hours x 52 weeks x $11 = $22,880
$22,880 is the gross annual salary with a $11 per hour wage.
As of June 2023, the average hourly wage is $33.58 (source).
This you are making WAY LESS than the average wage.
Let’s breakdown how that number is calculated
Typically, the average work week is 40 hours and you can work 52 weeks a year. Take 40 hours times 52 weeks and that equals 2,080 working hours. Then, multiply the hourly salary of $11 times 2,080 working hours and the result is $22,880.
That number is the gross income before taxes, insurance, 401K, or anything else is taken out. Net income is how much you deposit into your bank account.
Work Part Time?
But you may think, oh wait, I’m only working part time. So if you’re working part time, the assumption is working 20 hours a week at $11 an hour.
Only 20 hours per week. Then, take 20 hours times 52 weeks and that equals 1,040 working hours. Then, multiply the hourly salary of $11 times 1,040 working hours and the result is $11,440.
How Much is $11 Per Month?
On average, the monthly amount would average $1,907.
Annual Amount of $22,880 ÷ 12 months = $1,907 per month
Since some months have more days and fewer days like February, you can expect months with more days to have a bigger paycheck. Also, this can be heavily influenced by how often you are paid on and on which days you get paid.
Work Part Time?
Only 20 hours per week. Then, the monthly amount would average $953.
How Much is $11 per Hour Per Week
This is a great number to know! How much do I make each week? When I roll out of bed and do my job, what can I expect to make at the end of the week?
Once again, the assumption is 40 hours worked.
40 hours x $11 = $440 per week.
Work Part Time?
Only 20 hours per week. Then, the weekly amount would be $220.
How Much is $11 per Hour Bi-Weekly
For this calculation, take the average weekly pay of $440 and double it.
$440 per week x 2 = $880
Also, the other way to calculate this is:
40 hours x 2 weeks x $11 an hour = $880
Work Part Time?
Only 20 hours per week. Then, the bi-weekly amount would be $440.
How Much is $11 Per Hour Per Day
This depends on how many hours you work in a day. For this example, we are going to use an eight hour work day.
8 hours x $11 per hour = $88 per day.
If you work 10 hours a day for four days, then you would make $110 per day. (10 hours x $11 per hour)
Work Part Time?
Only 4 hours per day. Then, the daily amount would be $44.
$11 Per Hour is…
$11 per Hour – Full Time
Total Income
Yearly (52 weeks)
$22,880
Yearly (50 weeks)
$22,000
Monthly (173 hours)
$1,907
Weekly (40 Hours)
$440
Bi-Weekly (80 Hours)
$880
Daily Wage (8 Hours)
$88
Net Estimated Monthly Income
$1,455
**These are assumptions based on simple scenarios.
This post may contain affiliate links, which helps us to continue providing relevant content and we receive a small commission at no cost to you. As an Amazon Associate, I earn from qualifying purchases. Please read the full disclosure here.
Paid Time Off Earning 11 Dollars an Hour
Does your employer offer paid time off?
As an hourly, close to minimum wage employee, more than likely you will not get paid time off.
So, here are the scenarios for both cases.
For general purposes, we are going to assume you work 40 hours per week over the course of the year.
Case # 1 – With Paid Time Off
Most hourly employees get two weeks of paid time off, equivalent to 2 weeks of paid time off.
In this case, you would make $22,800 per year.
This is the same as the example above for annual salary making $11 per hour.
Case #2 – No Paid Time Off
Unfortunately, not all employers offer paid time off to their hourly employees. While that is unfortunate, it is best to plan for less income.
Life happens. There will be times you need to take time off for numerous reasons – sick time, handling an emergency, or even vacation.
So, let’s assume you take 2 weeks off without paid time off.
That means you would only work 50 weeks of the year instead of all 52 weeks. Take 40 hours times 50 weeks and that equals 2,000 working hours. Then, multiply the hourly salary of $11 times 2,000 working hours, and the result is $22,000.
40 hours x 50 weeks x $11 = $22,000
You would average $88 per working day and nothing when you don’t work.
$11 an Hour is How Much a year After Taxes
Let’s be honest… Taxes can take up a big chunk of your paycheck. Thus, you need to know how taxes can affect your hourly wage.
This is why you always wondering why your take-home pay is so much less.
Also, every single person’s tax situation is different.
On the basic level, let’s assume a 12% federal tax rate and a 4% state rate. Plus a percentage is taken out for Social Security and Medicare (FICA) of 7.65%.
Gross Annual Salary: $22,880
Federal Taxes of 12%: $2,746
State Taxes of 4%: $915
Social Security and Medicare of 7.65%: $1,750
$11 an Hour per Year after Taxes: $17,469
This would be your net annual salary after taxes.
To turn that back into an hourly wage, the assumption is working 2,080 hours.
$17469 ÷ 2080 hours = $8.40 per hour
After estimated taxes and FICA, you are netting $8.40 an hour. That is $2.60 an hour less than what you planned.
This is a very highlighted example and can vary greatly depending on your personal situation. Therefore, here is a great tool to help you figure out how much your net paycheck would be.
$11 an Hour Budget – Example
You are probably wondering can I live on my own making 11 dollars an hour? How much rent can you afford at 11 an hour?
Using our Cents Plan Formula, this is the best case scenario on how to budget your $11 per hour paycheck.
When using these percentages, it is best to use net income because taxes must be paid.
In this example, we calculated $11 an hour was $8.40 after taxes. That would average $1455 per month.
According to the Cents Plan Formula, here is the high level view of a $11 per hour budget:
Basic Expenses of 50% = $728
Save Money of 20% = $291
Give Money of 10% = $146
Fun Spending of 20% = $291
Debt of 0% = $0
Obviously, that is not doable when living so close to minimum wage. So, you have to be strategic on ways to decrease your basic expenses and debt. Then, it will allow you more money to save and fun spending.
To further break down an example budget of $11 per hour, then using the ideal household percentages is extremely helpful.
recommended budget percentages based on $11 per hour wage:
Category
Ideal Percentages
Sample Monthly Budget
Giving
10%
$76
Savings
15-25%
$114
Housing
20-30%
$572
Utilities
4-7%
$114
Groceries
5-12%
$153
Clothing
1-4%
$19
Transportation
4-10%
$114
Medical
5-12%
$191
Life Insurance
1%
$16
Education
1-4%
$10
Personal
2-7%
$29
Recreation / Entertainment
3-8%
$48
Debts
0% – Goal
$0
Government Tax (including Income Taxes, Social Security & Medicare)
15-25%
$451
Total Gross Income
$1,907
**In this budget, prioritization was given to basic expenses. Thus, some categories like giving and saving were less.
Living on $11 Per Hour
Living close to minimum wage can be a very difficult situation.
Is it doable? Probably not for long.
You just have to be wiser (or frugal) with your money and how you spend the hard-earned cash you have been blessed with.
A lot of times when people are making under the minimum wage mark, they feel like they are in this constant cycle that they can never keep up (which completely makes sense it is hard!).
When your thoughts are constantly focused on how you are struggling to keep up with bills and expenses, that is all you focus on.
You need to do is change your money mindset.
This is what you say to yourself… Okay, I am making near minimum wage for now. I have aspirations and goals to increase how much I make. For now, I am going to make sure that I am able to live on my 11 dollars per hour. I’m going to try and avoid debt and payday loans at all costs.
Other Tips to Help You:
Check your minimum wage for your state and city. You might find a higher minimum wage in a nearby city.
Look to living in a lower cost of living area to stretch your money.
Find ways to minimize your basic expenses.
Thrive with a minimalist lifestyle.
Decide if a roommate or moving back with your parents would help.
Bike or walk to work.
In the next section, we will dig into ways to increase your income, but for now, you must focus on living on $11 an hour.
5 Ways to Increase Your Hourly Wage
This right here is the most important section of this post.
You need to figure out ways to increase your hourly income because I’m going to tell you…you deserve more. You do a good job and your value is higher than what your employers pay you.
Even an increase of 50 cents to $11.50 will add up over the year. Even better $12 an hour!
1. Ask for a Raise
The first thing to do is ask for a raise. Walk right in and ask for a raise because you never know what the answer will be until you ask.
If you want the best tips on how specifically to ask for a raise and what the average wage is for somebody doing your job, then check out this book. In this book, the author gives you the exact way to increase your income. The purchase is worth it or go down to the library and check that book out.
2. Look for A New Job
Another way to increase your hourly wage is to look for a new job. Maybe a completely new industry.
It might be a total change for you, but many times, if you want to change your financial situation, then that starts with a career change. Maybe you’re stressed out at work. Making $11 an hour is too much for you and you’re not able to enjoy life, maybe changing jobs and finding another job may increase your pay, but it will also increase your quality of life.
3. Find a New Career
Because of student loans, too many employees feel like they are stuck in the career field they chose. They feel sucked into the job that they don’t like or have the potential they thought it would.
For many years, I was in the same situation until I decided to do a complete career change. I am glad I did. I have the flexibility that I needed in my life to do what I wanted when I needed to do it. Plus I am able to enjoy my entrepreneurial spirit.
4. Find Alternative Ways to Make Money
In today’s society, you need to find ways to make more money. Period.
There is no way to get around it. You need to find additional income outside a traditional nine-to-five position or typical 40 hour a week job. You will reach a point where you are maxed on what you can make in your current position or title. There may be some advancement to move forward, but in many cases, there just is not much room for growth.
So, you need to find a side hustle – another way to make money.
Do something that you enjoy, turn your hobby into a way to make money, turn something that you naturally do, and help others into a service business. In today’s society, the sky is the limit on how you can earn a freelancing income.
5. Earn Passive Income
The last way to increase your hourly wage is to start earning passive income.
This can be from a variety of ways including the stock market, real estate, online courses, book sales, etc. This is where the differentiation between struggling financially and being financially sound happens.
By earning money passively, you are able to do the things that you enjoy doing and not be loaded down, with having a job that you need to work, and a place that you have to go to. And you still make money doing nothing.
Here is an example:
You can start a brokerage account and start trading stocks for $50. You need to learn and take the one and only investing class I recommend. Learn how the market works, watch videos, and practice in a simulator before you start using your own money.
One gentleman started with $5,000 in his trading account and now has well over $36,000 in a year. Just from practice and being consistent, he has learned that passive income is the way for him to increase his income and also not be a slave to his job.
Tips to Live on $11 an Hour
In this last section, grasp these tips on how to live on $11 an hour. On our site, you can find lots of money saving tips to help stretch your income further.
Here are the most important tips to live on $11 an hour. Highlight these!
1. Spend Less Than You Make
First, you must learn to spend less than you make.
If not you will be caught in the debt cycle and that is not where you want to be. You will be consistently living paycheck to paycheck.
In order to break that dreadful cycle, it means your expenses must be less than your income.
And when I say income, it’s not the $11 an hour. As we talked about earlier in the post, there are taxes. The amount of taxes taken out of your paycheck is called your net income which is $11 an hour minus all the taxes, FICA, Social Security, and Medicare is taken out. That is your net income.
So, your net income has to be less than your net income.
2. Living Below Your Means
You need to be happy. And living on less can actually make you happier. Studies prove that less is better.
Finding contentment in life is one thing that is a struggle for most.
We are driven to want the new shiny toy, the thing next door, the stuff your friend or family member got. Our society has trained you that you need these things as well.
Have you ever taken a step back and looked at what you really need?
Once you are able to find contentment with life, then you are going to be set for the long term with your finances.
Here is our story on owning less stuff. We have been happier since.
3. Make Saving Money Fun
You need to make saving money fun. Period.
It could be participating in a no spend challenge for the month.
Check out the 200 envelope challenge (which is doable on your income)
It could be challenging your friends not to go to Target for a week.
Maybe changing your habits and not picking up takeout and planning meals.
Whatever it is challenge yourself.
Find new ways of saving money and have fun with it.
Even better, get your family and kids involved in the challenge to save money. Tell them the reason why you are saving money and this is what you are doing.
Here are 101 things to do with no money. Free activities without costing you a dime. That is an amazing resource for you and you will never be bored.
And you will learn a lot of things in life you can do for free. Personally, some of the best ones are getting outside and enjoying some fresh air.
4. Make More Money
If you want if you do not settle for less, then find ways to make more money. If you want more out of life, then increase your income.
You need to be an advocate for yourself.
Find ways to make more money.
It could be a side hustle, a second job, asking for a raise, going to school to change careers, or picking up extra hours.
Whatever path you take, that’s fine. Just find ways to make more money. Period.
5. No State Taxes
Paying taxes is one option to increase what you take home in each paycheck.
These are the states that don’t pay state income taxes on wages:
Alaska
Florida
Nevada
New Hampshire
South Dakota
Tennessee
Texas
Washington
Wyoming
It is very interesting if you take into account the amount of state taxes paid compared to a state with income taxes.
Also, if you live in one of the higher taxed states, then you may want to reconsider moving to a lower cost of living area. The higher taxes income tax states include California, Hawaii, New Jersey, Oregon, Minnesota, the District of Columbia, New York, Vermont, Iowa, and Wisconsin. These states tax income somewhere between 7.65% – 13.3%.
6. Stick to a Budget
You need to learn how to start a budget. We have tons of budgeting resources for you.
While creating a budget is great, you need to learn how to use one.
You do not have to budget down to every last penny.
You need to make sure your expenses are less than your income and that you are creating sinking funds for those irregular expenses.
Budget Help:
7. Pay Off Debt Quickly
The amount that you pay interest on debt is absolutely absurd.
Unfortunately, that is how many of these companies make their money from the interest you pay on debt.
If you are paying 5% to even 20-21% or higher, you need to find ways to lower that debt quickly.
Here’s a debt calculator to help you. Figure out your debt free date.
Paying off debt fast is your target and main focus. I can tell you from personal experience, that it was not until we paid off our debt that we finally rounded the corner financially. Once our debt was paid off, we could finally be able to save money. Set money aside in separate bank accounts and pay for cash for things.
It took us working hard to pay off debt. We needed persistence and patience while we had setbacks in our debt free journey.
Here are resources now for you to pay off your debt:
Jobs that Pay $11 an Hour
You can always find jobs that pay $11 per hour. Polish up that smile, fill out the application and be prepared with your interview skills.
Job Search Hint: Always send a written follow-up thank you note for your interview. That will help you get noticed and remembered.
First, look at the cities that require a minimum wage in their cities. That is the best place to start to find jobs that are going to pay higher than the federal minimum wage rate. Many of the cities are moving towards this model so, target and look for jobs in those areas.
Possible Ideas:
Cashiers
Back of the house restaurant staff
Landscape Laborer
Retail jobs
Paraeducators at schools
Janitors
Farm help
Warehouse workers
$11 Per Hour Annual Salary
In this post, we detailed 11 an hour is how much a year. Plus all of the variables that can impact your net income. This is something that you can live off.
$22,800
In this post, we highlighted ways to increase your income as well as tips for living off your wage.
Use the sample budget as a starting point with your expenses.
You will have to be savvy and wise with your hard-earned income. But, with a plan, anything is possible!
Try one of these ways to make money quickly to help you in the interim.
Know someone else that needs this, too? Then, please share!!
Did the post resonate with you?
More importantly, did I answer the questions you have about this topic? Let me know in the comments if I can help in some other way!
Your comments are not just welcomed; they’re an integral part of our community. Let’s continue the conversation and explore how these ideas align with your journey towards Money Bliss.
Credit card debt is an unfortunate reality for many today. Americans owe over $1 trillion in credit card debt, according to recent data from the Federal Reserve Bank of New York. And with steep interest rates and a high cost of living, the end of the road with debt can seem far away.
If you’ve been attacking debt with little progress, some small strategic steps can potentially shorten the journey.
Here’s what you can do to start digging your way out.
Understand your goals — and get motivated
Get clear on why you want to tackle debt and the opportunities that open up without it, says Gabbi Cerezo, a certified financial planner and accredited financial counselor.
Write down the reason and post it somewhere visible as a daily reminder, she says. It can also help to tape a note to your credit card, too.
Before diving right into the numbers — what you owe, and to whom — Cerezo also recommends looking to social media for inspiration.
“By getting familiar with how other people have overcome the burden of credit card debt and seeing all the methods that there are out there, it starts to become more of a possibility in your mind,” she says.
Be sure to watch out for misinformation online, even from those who have successfully paid off debt. If a strategy catches your eye, research it across reputable personal finance websites to get the experts’ take on it.
Once you’ve got a healthy dose of inspiration, refer to your credit card statements to tally up debt, interest rates and the monthly costs.
Explore options to lower interest rates
Now that you have a goal and some numbers on paper, you can start to comparison shop for low-interest options. Depending on your credit, some of those options may include:
Negotiating a lower interest rate. With a good payment history and promotional mail offers as leverage, call credit card issuers to see whether you might qualify for a reduction.
Using a balance transfer credit card. You can accelerate progress by transferring high-interest debt onto a new credit card with no annual fee and a 0% introductory APR. Look for one with a balance transfer fee of 3% or lower.
Getting a personal loan. A balance transfer credit card comes with its own credit limit, which may not be enough to handle all of your debt. In that case, a personal loan can make sense. It allows you to consolidate debts into one lower-interest fixed payment.
Creating a debt management plan. Regardless of your credit, if payments or everyday costs are becoming difficult to manage, consider consulting an expert at a nonprofit credit counseling agency. That expert can determine whether you qualify for a debt management plan that consolidates credit card debt into one single payment with a lower interest rate.
Many of these options have costs or fees attached, so calculate whether they’re cheaper than the interest you’ll otherwise pay over time on your debt. To make more of an impact, stop using credit cards and, if possible, pay more than the minimum amount due each month.
Nicole Reed, a senior budget analyst and content creator based in Virginia, used two 0% APR balance transfer credit cards to pay off around $31,000 in credit card debt in 2023.
“I sat down with those minimum balances that those cards had established and I knew I wanted to pay more,” she says.
By also applying windfalls like tax refunds, bonuses and additional income, she reached her debt-payoff goal in nine months.
Make smart money moves
Look through debit and credit card statements and eliminate unnecessary expenses, and switch to cheaper alternatives. Reed, for instance, cut back on coffee, dining out and traveling.
“You have to prioritize what’s more important to you,” she says. “Would you rather get out of the debt or would you rather have that thing?”
If you’ve exhausted these options and there still isn’t enough money to go around, consider a larger change that can supplement your income or help it go further: adding a roommate, searching for a new job, taking on a side hustle or seeking a raise.
Resolve to put any savings from your revamped budget toward the debt, an emergency fund or both. A small emergency fund can keep you from falling further into debt when an unexpected expense arises.
Work your way up to saving your first $1,000, Cerezo says. It’s hard to do, but it can prevent reliance on credit cards if money runs out, she says.
Choose your target
With multiple credit cards, all payments must be met — but you can determine which debt to prioritize. The avalanche method is the most cost-effective, as you’ll tackle the debt with the highest interest rates first. But the snowball method — in which you attack smaller debt amounts first — may work better for those seeking immediate motivation.
Set a deadline
Unless you’ve been assigned a deadline through newly negotiated terms (see above), do the math to determine how much you’ll need to pay each month to eliminate your debt.
Plan to celebrate milestones along the way with an experience or prize that won’t break the bank, Cerezo says.
Tracking progress visually can also help you stay connected to goals, and scheduling regular check-ins with your budget can offer a realistic view of any advancement or setbacks.