Online banking company SoFi Technologies(SOFI 3.10%) is a challenging stock to analyze. A little over two years ago, it made its public market debut via a merger with a special purpose acquisition company (SPAC). Since then, its stock has experienced a fair amount of turbulence, peaking in June 2021 north of $23 per share. Today, it’s trading nearly two-thirds below that high.
There are several reasons why SoFi stock has experienced such dramatic ebbs and flows. For one, the company has a history of burning a lot of cash. Furthermore, it has been pretty acquisitive over the last couple of years, leaving skeptics with a lot of room to doubt its ability to integrate these new products and services.
If that weren’t enough, SoFi’s roots are in lending, particularly for student loans. This part of SoFi’s business model has turned some investors bearish, as the company was not immune to the macro effects of the extended (but soon-to-be-ending) moratorium on student loan repayments. Lastly, on top of all this, the financial services sector is dominated by large banks like Goldman Sachs, JP Morgan, and Morgan Stanley.
However, these reasons for skepticism have caused some to overlook the promising segments of SoFi’s business. The company is quietly building something special, and the stock warrants a second look for your portfolio.
Loans are just one part of the equation
SoFi reports its revenue in three main buckets: lending, technology, and financial services. Each of these categories includes a number of products and services. The lending business covers student loans, personal loans, and home loans. The technology segment is built primarily on a platform called Galileo, which SoFi acquired three years ago. SoFi’s financial services business mimics traditional banking products such as checking and savings accounts, credit cards, and more.
In the first quarter, SoFi’s lending segment reported revenue of $337 million. And while the company’s total revenue of $472 million represented healthy growth of 43% year over year, it’s a good idea to analyze the results in lending a bit further.
In Q1, home loan origination volume plummeted by 71%, and student loan origination volume sank by 47%. This really showcases how exposed SoFi’s lending segment can be during a rising interest rate environment, coupled with multiple extensions of the student loan repayment moratorium. However, personal loans make up the overwhelming majority of SoFi’s origination volume, and fortunately for the company, originations in personal loans increased 46% year over year during Q1, thereby increasing total loan originations by 7%.
Given the above, it’s understandable how some investors would overlook SoFi’s other businesses. The lending business is a huge part of the company, and the Q1 results illustrated why the road ahead for that segment won’t be smooth. With all of that said, SoFi has done a tremendous job building out its technology platform as well as penetrating the traditional financial services market. And I believe that those two segments are the ones that will ultimately propel the company into hypergrowth mode.
Image Source: Getty Images
The whole is greater than the sum of its parts
SoFi’s leadership team has described their vision as attempting to build the Amazon Web Services of fintech. In essence, SoFi wants to become a one-stop shop for all of your banking needs, so it’s building a flywheel business model that it hopes will generate exponential growth over time by cross-selling products to new and existing customers.
As of the end of the first quarter, SoFi’s platform boasted 5.7 million members, up 46% year over year. Moreover, the total number of products those members used rose by roughly 660,000 during the quarter to 8.6 million. So on average, each SoFi member is using 1.5 of its products. This is important, because it is tangible evidence the company can successfully cross-sell its products within its user base, which should yield strong revenue growth and margin expansion down the road.
When it comes to translating these key performance indicators into actual dollars, SoFi’s top-line growth doesn’t lie. In Q1, revenue from its technology segment grew 28% year over year to $77.9 million. Financial services revenue more than tripled from $23.5 million to $81.1 million.
Although that revenue growth in technology and financial services was nice to see, perhaps the biggest victory for SoFi came on the bottom line. For the quarter, it reported a net loss of $34.4 million. To put this into context, its loss in Q1 2022 was $110.4 million. So while the company is still burning cash, its ability to reduce its losses by this magnitude should really encourage investors. During the earnings call, management made it clear that it expects the company to be GAAP net income positive by Q4.
Valuation is too good to pass up
As of this writing, SoFi stock is up almost 90% year to date. Investors could argue the stock was oversold for a long period of time following its public debut. Moreover, it likely has benefited from some broader trends in the Nasdaq Composite index, which is up by more than 30% this year.
Given its lack of profitability, the price-to-earnings ratio is not a useful metric for valuing SoFi or comparing it to its peers. However, on a price-to-sales basis, it trades at a ratio of 4.7. To put this into context, another tech-heavy banking platform, Nu Holdings, trades at a ratio of 10.5. Moreover, the tech-oriented financial services firm Upstart Holdings also trades for 5.4 times sales, yet its revenue decreased 67% year over year in Q1. Considering SoFi grew its top line by more than 40%, it seems unreasonable the two should be trading at comparable multiples. This could imply SoFi is undervalued.
SoFi clearly has a lot of secular tailwinds, particularly in its tech platform and financial services offerings. The company is growing like a weed in those areas while knocking on the door of profitability. Long-term investors should take the opportunity to dollar-cost average their way into a position in this stock and exercise patience as the company continues executing on its vision.
When it comes to modern banking, it’s SoFi’s world, and its competitors are paying rent.
JPMorgan Chase is an advertising partner of The Ascent, a Motley Fool company. John Mackey, former CEO of Whole Foods Market, an Amazon subsidiary, is a member of The Motley Fool’s board of directors. Adam Spatacco has positions in Amazon.com and SoFi Technologies. The Motley Fool has positions in and recommends Amazon.com, Goldman Sachs Group, JPMorgan Chase, and Upstart. The Motley Fool has a disclosure policy.
A newly named company called Noah (formerly Patch Homes) lets you access up to $300,000 of your home equity in exchange for future home price appreciation.
The arrangement requires no monthly payments or interest, and all they ask is that you pay them back in 10 years.
They refer to it as a “home equity sharing product,” which actually could make a lot of sense during a crisis such as the coronavirus (COVID-19) epidemic currently ravaging the world.
It allows homeowners to access cash without being burdened with payments, something that may come in handy if a borrower were temporarily laid off or experienced a similar loss of income.
How Noah Works
Noah’s home equity sharing product allows homeowners to tap into their equity without having to execute a cash out refinance or apply for a HELOC or home equity loan.
In doing so, no monthly payments or interest are due. However, in exchange for access to that cash, you must part with a percentage of your home price appreciation, which can range between 15% and 40%.
So while you get the money today, you get less in the future when you sell your home, similar to how a reverse mortgage works.
If the property happens to decrease in value during the 10-year term, Noah will also share in the losses, assuming you don’t exit the contract within the first three years.
In the example on their website (pictured above), a property with an adjusted price of $900,000 rises to $1,343,916 after a decade.
Noah would get $233,175 in this scenario, with $100,000 being their initial investment, and $133,175 being their profit via appreciation. It appears to be a 15% share in this example.
If the home falls in value, Noah would only receive $51,227 of its original $100,000 investment back.
Both these scenarios assume the homeowner exits the contract on the expiration date of a 10-year term.
Their business model is similar to EquityKey, Point, and Unison Home, all of which give homeowners access to funds without payments in exchange for future profits.
How You Pay Noah Back
You can use proceeds from a cash out refinance
You can sell your home
You can pay it off with a home equity loan, HELOC, or reverse mortgage
Or simply pay them back with your own funds on hand
As noted, Noah makes money by receiving a portion of your home price appreciation.
This is based on either the sales price if you sell, or the appraised value when you choose to buy them out.
They say the majority of their homeowner partners share between 15% to 40% of future appreciation, with no cap or floor amount.
My assumption is the more you borrow, the more appreciation you must share.
You’ll need to pay that percentage plus the original amount borrowed to satisfy your exit.
In order to pay Noah back, you’ve got four main options.
You can refinance your mortgage with a traditional lender and use the proceeds to pay it off.
You can take out a home-equity loan, HELOC, or a reverse mortgage, and use the funds to pay Noah.
You can sell your home, and have Noah paid directly via escrow with the proceeds.
Or, you can simply use your cash savings on hand to pay them back.
It’s also possible to refinance your Noah agreement into a new Noah agreement.
Applying with Noah
Get an estimate by entering your home address and some basic details
Complete an online application and get your credit pulled
Schedule a home appraisal to determine value
Sign your documents and receive your funds
First, you request an estimate by entering your property address into their online form.
It will pull your home value automatically and ask you some basic questions, such as what you currently owe, along with your credit score.
Assuming you want to proceed, you enter basic contact information and then submit a full application online.
This process will be similar to applying for a mortgage, requiring a credit check and the uploading of relevant income/asset documentation.
Next, an appraiser will visit your home to provide an independent assessment of its value.
However, Noah only uses that valuation as a baseline – they then adjust for “appraisal variance, lack of liquidity, and market risk.”
In other words, the appraiser may say the home is worth $500,000, but Noah could adjust it down to $450,000 when all is said is done.
They will then make a final funding offer that outlines how much you’ll receive and the percentage of future appreciation you’ll share with Noah.
Once you sign closing documents with a notary, they’ll transfer the funds within a few days. Noah estimates that the process can take as little as 15 days.
Noah Fees
It’s important to note that Noah does charge fees, despite not charging interest or requiring monthly payments.
Their servicing fee, which is basically a loan origination fee, is $2,000 or 3% of the financing amount, whichever is higher. It covers the processing and underwriting of the loan.
Additionally, third-party fees also apply, including the following:
• Title and escrow: ranges between $520 and $750 • Title insurance: $400 • Home appraisal: $299 • Affordable housing fees: between $150 and $225 • Notary fee: $100
Note: For a limited time (now until May 1st, 2020), they are offering all new customers a $1,000 discount on fees at closing.
Who Is Eligible for Noah?
Most property types including single-family homes, condos, and townhouses
Primary, second homes, and investment properties
Must have a minimum 600 FICO score and clean credit history
Property must be valued between $300,000 and $3 million in an eligible area
Homeowners typically take out 5% to 20% of their property value
Financing amount is capped at a maximum of 80% LTV
Not everyone is eligible for Noah, just like not everyone qualifies for a mortgage. There are many different requirements that you must meet, including property and borrower-specific items.
First off, you need a minimum FICO score of 600, which is below subprime. They use the average of the three credit bureaus, just like traditional mortgage lenders do.
Next, you can’t have multiple 60-day or 90-day delinquencies on your credit report, nor can you be in active bankruptcy or foreclosure proceedings.
You’ll also need sufficient income/savings to cover current debt obligations.
They allow a very flexible 60% max DTI, but anything above that will require that you use Noah proceeds to pay down debt.
With regard to the property itself, it must be valued between $300,000 and $3 million, and you must have at least 25% equity at the time of application.
It can be a single-family home or a condo/townhouse. They also consider tenancy in common (TICs) units and co-ops on a case-by-case basis.
Noah is available on primary residences, second homes, and investment properties.
You cannot have more than three liens on the property, but if you do, Noah proceeds can be used to pay them down/off.
Any private mortgages or loans from private money lenders must be paid off if you partner with Noah.
Lastly, your property should not be involved in any sort of major construction beyond minor home repairs or renovations, and it must be located in one of their service areas.
Where Is Noah Available?
At the moment, Noah isn’t available nationwide, but there are plans to expand across the country later this year, including major East Coast cities.
Currently, Noah is available in 20 metro areas across five states, including:
– Boulder – Colorado Springs – Denver – Fort Collins – Los Angeles – Ogden – Portland – Provo – Salt Lake City – San Diego – San Francisco – San Luis Obispo – San Jose – Santa Barbara – Santa Cruz – Santa Rosa – Seattle – Tacoma – Vancouver (WA) – West Riverside
Noah’s Homeowner Protection Program
As a Noah homeowner partner, you also have access to “protective advances” via their Homeowner Protection Program.
If you run into financial difficulty, they are able to provide additional funds for things like emergency repairs, or simply to make mortgage and/or property tax payments.
They can provide up to $10,000 based on your property profile, and the term matches your Noah contract. It takes 3-5 days to receive your funds.
The difference here is interest does accrue on the amount borrowed (unclear on APR, it may vary), and there is a processing fee of $500.
While you can pay it back at any time to limit interest charges, you must pay it off in full, no partial payments are accepted.
Note: Noah is waiving all administrative/processing fees for the HPP until May 1st, 2020, and all protective advances offered via the program until May 1st will be interest-free for the first 90 days.
Is Noah a Good Option for Homeowners?
May be a good alternative to a home equity line/loan or reverse mortgage
Or for someone who has trouble qualifying for a traditional mortgage
Just be sure to consider the upfront fees and how much appreciation they ask for in exchange
Other companies offer similar arrangements so still comparison shop!
Like anything else, it really depends on your unique financial situation and your needs.
Those with limited assets in need of cash, or those who have trouble qualifying for a traditional mortgage or home equity product might be a good fit.
The same goes for those on a fixed income who want to tap into their equity, but don’t want a reverse mortgage.
While you could part with quite a bit of your home price appreciation in the future, you aren’t on the hook for monthly payments. And the cash could come in handy if you’re in a pinch.
The current coronavirus outbreak and related economic disruption is a perfect example of how this type of arrangement could benefit homeowners in need of money when an unexpected emergency strikes.
Noah also shares in some of the downside risk, assuming home prices fall during the 10-year term (and you buy them out after the first 3 years).
Tip: There are now several companies offering these types of partnerships, so if you do go down this road, be sure to compare costs and offers to determine who has the best deal.
The average 30-year-fixed mortgage rose seven basis points to 3.05% for the week ending Oct. 14, to its highest level since April, according to Freddie Mac’s latest PMMS survey of mortgage rates.
Two weeks ago, rates rose 13 basis points to 3.01%, eclipsing the 3% mark for the first time since June. However, last week, rates fell to 2.99%. Mortgage rates typically move in tandem with the 10-year U.S. Treasury yield, which was 1.56% for Oct. 14.
Sam Khater, Freddie Mac’s chief economist, said in a statement that “as inflationary pressure builds due to the ongoing pandemic and tightening monetary policy, we expect rates to continue a modest upswing.”
Mortgage rates have been kept low in part because of the Federal Reserve’s massive monthly purchases of $120 billion in U.S. Treasury bonds and mortgage-backed securities. The central bank has signaled that will eventually come to an end, however, and it is expected to begin to taper off its purchases when substantial further progress is made in the labor market.
Although rates remain at historic lows for now, market observers do expect rates to climb upward, eventually. Even a modest increase in rates could deter borrowers from seeking to refinance their mortgages.
How fine-tuning MSR valuations can help lenders improve decision-making
As rates change and the market shifts to a more purchase-driven origination environment, lenders need to carefully monitor margins and profitability. If we’ve learned anything in the past year, it’s that operational flexibility and accurate servicing valuation are key to lending profitability.
Presented by: Black Knight
A year ago at this time, the 30-year fixed-rate mortgage averaged 2.81%. The 15-year fixed-rate mortgage averaged 2.30% last week, up from the prior week, when it averaged 2.23%.
“Historically speaking, rates are still low, but many potential homebuyers are staying on the sidelines due to high home price growth. Rising mortgage rates combined with growing home prices make affordability more challenging for potential homebuyers,” Khater said.
Mortgage application activity has also been largely flat. The latest mortgage application survey from the Mortgage Bankers Association (MBA) showedapplications overall increased just 0.2% for the week ending Oct. 8, compared to the prior week.
Joel Kan, MBA’s associate vice president of economic and industry forecasting, said that an increase in home purchase applications, which was a “welcome news,” offset a slight decline in refinances.
“Where are you from?” It’s a common question when you meet someone new while traveling. And it’s an easy question for most people. But for me, it’s complicated if I want to give more details than “the United States.”
After all, my husband and I gave up our Austin, Texas, apartment in June 2017, sold or donated most of our belongings and then set out as digital nomads on July 2, 2017. So, excluding some extended time living with family early in the coronavirus pandemic, we’ve traveled full time while working remotely for the last six years.
In 2020, I wrote about my first three years as a digital nomad. But in this story, I’ll look back at the past six years. In doing so, I’ll discuss how I became a digital nomad, some of my travel statistics and how travel has changed for me during the past six years.
How I became a digital nomad
On a bus from Aguas Calientes to Machu Picchu in Peru in 2013, I first heard of a gap year or sabbatical year. I hadn’t gotten into points and miles yet, but my husband and I loved the idea of taking a year off to travel after I finished graduate school. Well, fast forward four years to 2017, when it was time to leave on our “gap year.” By this time, we were already working as writers in the award travel space.
So, we hit the road as digital nomads instead of taking a gap year. And we quickly fell in love with the freedom and flexibility of the lifestyle. I appreciate experiencing different cultures, landscapes, experiences and cuisines daily. And I’ve found that frequently visiting new destinations inspires me.
I also enjoy using the topics I write about — points, miles, credit cards and elite status — on a daily basis. We make award redemptions most weeks (and often multiple times a week), and we’re constantly traveling. So, I know many of the airline, hotel and credit card programs I write about from personal experience. And I’m personally invested when these programs change or devalue their rewards.
Points and miles certainly fuel some of our travel. But we also book paid flights and nights when it makes sense. After all, we only have a finite amount of points and miles, and we’ve found that paid partner-operated premium-cabin flights are often the best way to earn airline elite status.
Related: 6 ways award travel and elite status pair well with my digital nomad life
1,121,959 miles on 575 flights
Over the last six years, I’ve taken 575 flights on 62 airlines to 180 airports in 58 countries. I’ve taken so many flights in the last six years that my flight map is difficult to read.
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I flew 1,121,959 direct flight miles in the last six years, with an average flight distance of 1,951 miles (about the distance from Atlanta to Los Angeles). My longest flight was 9,532 miles, from New York to Singapore. And my shortest flight was just 11 miles from Tahiti to Moorea in French Polynesia.
But my most memorable flight was on Sri Lanka’s Cinnamon Air from Polgolla Reservoir Aerodrome (KDZ) to Koggala Airport (KCT) on a Cessna 208 amphibious caravan.
I frequently fly American Airlines and often use Hartsfield-Jackson Atlanta International Airport (ATL) when visiting family. So, it’s not surprising that my three most frequent routes by flight segments are between American Airlines’ hubs and Atlanta. Here’s a look at my top 10 most frequent flight segments over the last six years:
New York’s LaGuardia Airport (LGA) to/from ATL: 15 flights
Dallas Fort Worth International Airport (DFW) to/from ATL: 11 flights
Charlotte Douglas International Airport (CLT) to/from ATL: 10 flights
Kuala Lumpur International Airport (KUL) to/from Kualanamu International Airport (KNO): 10 flights while I earned Malaysia Airlines Enrich Gold status in 2019
Los Angeles International Airport (LAX) to/from ATL: Nine flights
Las Vegas’ Harry Reid International Airport (LAS) to/from LAX: Eight flights
DFW to/from LGA: Six flights
London’s Heathrow Airport (LHR) to/from LAX: Six flights
Hong Kong International Airport (HKG) to/from Da Nang International Airport (DAD): Six flights booked during Cathay Pacific’s New Year’s deal in 2019
DFW to/from LAS: Five flights
And my loyalty to American Airlines AAdvantage and its Oneworld partners shows when you look at the airlines I flew most by flight segments:
American Airlines: 224 flights, including reviews of American’s A321T business class, 787-9 business class, 777-200 business class with B/E Aerospace Super Diamond seats, 787-8 Main Cabin Extra, 757-200 Main Cabin Extra and 757-200 business class
United Airlines: 31 flights, including reviews of United’s 787-8 economy class and 757-200 economy class
Southwest Airlines: 29 flights, including a review of Southwest’s 737-800 from Oakland, California, to Newark
Malaysia Airlines: 26 flights
Qatar Airways: 23 flights, including reviews of Qatar Qsuite on a 777-300ER and Qatar Qsuite on an A350-1000
Delta Air Lines: 22 flights, including when I was one of the first American tourists to fly to Italy on a COVID-19-tested flight
British Airways: 20 flights, including a review of British Airways’ A380 economy class
Cathay Pacific: 17 flights
Japan Airlines: 14 flights, including a review of Japan Airlines’ 777-300ER premium economy
Qantas: 12 flights
However, if you look at the airlines on which I flew the most mileage, the ranking is a bit different due to some mileage runs:
American Airlines: 404,296 miles
Cathay Pacific: 104,481 miles
Qatar Airways: 89,630 miles
British Airways: 53,357 miles
Delta Air Lines: 49,603 miles
United Airlines: 42,237 miles
Singapore Airlines: 36,176 miles, including a review of Singapore Airlines’ A350-900ULR premium economy
Japan Airlines: 33,756 miles
Air Canada: 30,792 miles
All Nippon Airways: 28,938 miles
I track all my flights in OpenFlights. So, although it’s relatively easy for me to gather statistics on my flights, I don’t have a simple way to determine the amount I paid in points and cash for my 575 flights during the last six years.
Related: The best credit cards for booking flights
1,103 nights in hotels
I’ve spent over half of the last six years living out of hotel rooms. In particular, I’ve spent 894 nights at 75 major hotel brands within the last six years. And I’ve spent 209 nights at other brands and independent hotels.
Here’s the breakdown of my stays by loyalty program and brand over the last six years, including notes about my favorite programs.
390 nights at 15 IHG brands
Holiday Inn Express: 120 nights
Holiday Inn: 66 nights
InterContinental Hotels & Resorts: 51 nights, including five nights at the InterContinental Hayman Island Resort in Australia, four nights at the InterContinental Phuket Resort in Thailand, four nights at the InterContinental Phu Quoc Long Beach Resort in Vietnam, three nights at the InterContinental Danang Sun Peninsula Resort in Vietnam, three nights at the InterContinental New York Times Square in New York and two nights at the InterContinental Fiji Golf Resort & Spa in Fiji
Candlewood Suites: 28 nights
Hotel Indigo: 26 nights, including five nights at the Hotel Indigo Austin Downtown-University in Texas and four nights at the Hotel Indigo Birmingham Five Points South – UAB in Alabama
Staybridge Suites: 22 nights
Crowne Plaza Hotels & Resorts: 19 nights, including three nights at the Crowne Plaza Beijing Wangfujing in China and three nights at the Crowne Plaza Times Square in New York
Holiday Inn Resort: 19 nights, including 10 nights at the Holiday Inn Resort Kandooma Maldives in the Maldives
Voco: 11 nights, including six nights at Voco Gold Coast in Australia
Regent: Nine nights
Kimpton Hotels & Restaurants: Eight nights
Six Senses: Six nights, including four nights at Six Senses Laamu in the Maldives and two nights at Six Senses Yao Noi in Thailand
Atwell Suites: Two nights at Atwell Suites Miami Brickell in Florida
Avid: Two nights at Avid hotel Oklahoma City — Quail Springs in Oklahoma
Even: One night
Over the last six years, I’ve stayed 161 paid nights at IHG properties for an average of $152 per night. The least I paid was $48 per night at the Holiday Inn Express Berlin — Alexanderplatz in Germany. And the most I paid was $1,564 per night during a review of the InterContinental Maldives Maamunagau Resort in the Maldives.
Meanwhile, we redeemed IHG points for 209 nights over the last six years, including 36 fourth-night-free rewards. On average, we redeemed 15,591 IHG points per night. We also redeemed 20 anniversary nights over the last six years, including at the InterContinental Bora Bora Resort & Thalasso Spa in French Polynesia and the Kimpton De Witt Amsterdam in the Netherlands.
You might wonder how we earned so many IHG points and anniversary nights. We maximize IHG promotions to earn points on stays. And we often buy points during IHG points sales with a 100% bonus when we can do so for 0.5 cents per point. As for the anniversary night certificates, we both have multiple IHG credit cards, so we’ve each earned two anniversary nights for most of the last six years.
We frequently stay at IHG One Rewards hotels and resorts due to the high value we often get when redeeming IHG points. But, with the launch of the new IHG One Rewards program last year, we are also getting good value from the annual lounge membership you can select through IHG’s Milestone Rewards program after staying 40 nights in a year.
Related: 9 budget strategies for getting the most out of your points and miles
209 nights at other brands and independent hotels
These days, we usually stay at major hotel brands to earn and use elite status perks and benefit from the consistency provided by these brands. But we often stayed at independent hotels when we first hit the road as digital nomads in 2017. And even now, we sometimes find ourselves in a destination without major hotel brands or where staying at a property outside our brand loyalties makes the most sense.
For example, we couldn’t pass up staying in a twin cell at YHA Fremantle Prison in Australia and a robot hotel in Japan. Likewise, staying within Addo Elephant and Kruger national parks in South Africa let us maximize our time seeing wildlife in these parks.
We often book these stays through online travel agencies since we don’t have to worry about missing out on elite status benefits and earnings while staying at properties outside our primary brands. For example, we’ll sometimes book through credit card portals to use credits, like the $50 hotel credit each account anniversary year on the Chase Sapphire Preferred Card. And we’ll occasionally book through American Express Fine Hotels + Resorts to snag extra perks and use the prepaid hotel credit we get each calendar year as a perk of The Platinum Card® from American Express. We’ll also sometimes use Rocketmiles to earn American Airlines miles and Loyalty Points on our stays.
On average, I paid $83 per night on these stays. But, my least expensive night was $18 per night for a private room with a shared bathroom at Stella Di Notte in Belgrade, Serbia. And my most expensive night was $235 per night at the RLJ Kendeja Resort & Villas in Liberia during PeaceJam.
203 nights at 21 Marriott brands
Over the last six years, I’ve stayed 140 paid nights at Marriott properties for an average of $121 per night. The least I paid was $44 per night at the Four Points by Sheraton Bogota in Colombia. And the most I paid was $350 per night during a review of the Waikoloa Beach Marriott Resort & Spa in Hawaii.
Meanwhile, we redeemed Marriott points for 49 nights over the last six years, including six fifth-night-free benefits. On average, we redeemed 16,167 points per night on Marriott award stays. We also redeemed 14 free night awards we earned through Marriott credit cards and promotions over the last six years.
Related: Here’s why you need both a personal and business Marriott Bonvoy credit card
115 nights at 6 Choice brands
Ascend Hotel Collection: 54 nights, including 28 nights at Emotions All Inclusive Puerto Plata in the Dominican Republic, nine nights at Gowanus Inn & Yard in New York (no longer bookable through Choice Hotels) and three nights at Bluegreen Vacations Fountains in Florida
Comfort: 37 nights, including 19 nights in Japan
Quality Inn: 13 nights
Cambria Hotels: Four nights
Rodeway Inn: Four nights
Clarion: Three nights
Over the last six years, I’ve stayed 34 paid nights at Choice Privileges properties for an average of $93 per night. The least I paid was $54 per night at the Comfort Hotel Airport CDG in France. And the most I paid was $239 per night at Cambria Hotel New York — Times Square in New York.
Meanwhile, we redeemed Choice points for 81 nights over the last six years. On average, we redeemed 9,531 Choice points per night. I’ve found I can get excellent value when redeeming Choice points for unique redemptions and for stays in Japan, Europe and destinations that typically feature high paid hotel rates. So, as with IHG, we often buy Choice points during sales or through Daily Getaways promotions.
87 nights at 11 Hyatt brands and partners
I didn’t stay much with World of Hyatt until the program offered reduced qualification requirements and double elite night credits in early 2021. I earned Globalist status in 2021 for far fewer nights than is usually required, but I’ve prioritized maintaining it due to the on-site perks it provides.
I’ve stayed 53 paid nights at Hyatt properties for an average of $139 per night over the last six years. The least I paid was $24 per night at the Excalibur Hotel & Casino in Las Vegas. And the most I paid was $353 per night at Hyatt House New York/Chelsea in New York.
Meanwhile, I redeemed Hyatt points for 27 free nights over the last six years. I’ve found some excellent Category 1 Hyatt hotels that provide wonderful value on award stays. So, it isn’t surprising that I’ve redeemed 5,563 points per night on average and just 3,500 points per night for nine nights. Additionally, I redeemed seven free night certificates that I earned through Hyatt credit cards, Hyatt Milestone Rewards and the Hyatt Brand Explorer promotion over the last six years.
40 nights at 10 Wyndham brands
Days Inn: 10 nights
Ramada: Nine nights
Ramada Encore: Five nights
Microtel: Five nights
Club Wyndham: Three nights
Super 8: Three nights
Viva Wyndham: Two nights at Viva Wyndham Azteca — All-Inclusive Resort in Mexico
Baymont: One night
Howard Johnson: One night
Travelodge: One night
Over the last six years, I’ve stayed 29 paid nights at Wyndham properties for an average of $103 per night. The least I paid was $48 per night at the Days Inn Guam-Tamuning in Guam. And the most I paid was $200 per night during a review of the Viva Wyndham Azteca — All-Inclusive Resort in Mexico.
Meanwhile, we redeemed Wyndham points for 11 nights over the last six years. On average, we redeemed 9,068 points per night on Wyndham award stays. And we love getting a 10% redemption discount when we redeem Wyndham points as a benefit of our Wyndham Rewards credit card, as this brings an award night that would typically cost 7,500 points down to just 6,750 points.
32 nights at 6 Hilton brands
Over the last six years, I’ve stayed 18 paid nights at Hilton properties for an average of $130 per night. The least I’ve paid was $58 per night at the Hilton Jaipur in India. And the most I paid was $168 per night at the Hilton Niseko Village in Japan.
Meanwhile, we redeemed Hilton points for eight nights over the last six years, including one fifth-night-free benefit. On average, we redeemed 46,250 points per night on Hilton award stays. We also redeemed six Hilton free night certificates that we earned through Hilton credit cards over the last six years for excellent value at the Conrad New York Midtown, the Conrad Maldives Rangali Island and the Hilton Maldives Amingiri Resort & Spa.
The average amount we redeemed per night with Hilton Honors is significantly higher than with other hotel loyalty programs. This, combined with my struggle to get more than TPG’s valuation (0.6 cents per point) when redeeming Hilton points, is why I don’t frequently stay at Hilton brands despite having Hilton Diamond status through a Hilton credit card.
19 nights at 4 Accor brands
Ibis: 12 nights
Mercure: Four nights
Grand Mercure: Two nights
Ibis Budget: One night
Over the last six years, I’ve stayed 19 nights at Accor properties for an average of $56 per night. The least I paid was $36 per night at the Ibis Muenchen City Nord in Germany. And the most I paid was $84 per night at the Ibis Madrid Alcobendas in Spain.
8 nights at 2 Best Western brands
Best Western: Six nights
Best Western Plus: Two nights
Over the last six years, I’ve stayed eight nights at Best Western properties for an average of $78 per night. The least I paid was $57 per night at the Best Western Amsterdam Airport Hotel in the Netherlands. And the most I paid was $147 per night at the Best Western Plus Mountain View Auburn Inn in Washington.
452 nights camping
When I became a digital nomad in 2017, I didn’t think there was any chance I’d camp 452 nights in the next six years. And even three years ago, I’d only spent three nights tent camping for a concert at The Gorge in Washington state and three nights in a rental RV doing a relocation from Las Vegas to Denver.
But, as it became apparent the coronavirus pandemic would affect international travel for more than just a few months, my husband and I tried out a six-night RV relocation rental in July 2020. Then in August 2020, we decided to buy the same RV model we’d relocated.
When we bought our Class C RV, we expected we’d sell it as soon as international travel to most destinations became relatively simple again. But, we discovered we enjoy working remotely from our RV while in the U.S. We’ve now spent 440 nights camping in our RV since buying it — 97 nights in 2020, 234 nights in 2021, 80 nights in 2022 and 29 nights so far in 2023.
Nineteen nights in our RV have been free at locations (like select Walmarts, select Cracker Barrels and businesses that participate in Harvest Hosts) that allow RVers to stay overnight upon asking permission. We’ve also spent 37 nights sleeping in the driveways of friends and family while visiting them.
But we usually find paid RV campsites with power and water. We’ve paid for campsites on 393 nights as follows:
171 nights at city and county campgrounds ($32 per night on average)
133 nights at U.S. Army Corps of Engineers campgrounds ($27 per night on average)
66 nights at state park campgrounds ($34 per night on average)
37 nights at private campgrounds ($52 per night on average)
Four nights at national park campgrounds ($48 per night on average)
On average, we’ve paid $33 per night for our RV campsites. The highest we paid was $104 per night at Orlando / Kissimmee KOA Holiday in Florida. And the least we paid was $17 per night at Shady Grove Campground in Cumming, Georgia, during a half-off promotion.
Related: The cheapest place to stay at Disney World is a tent — so I tried it
443 nights with family and friends
One aspect my husband and I appreciate about being digital nomads is seeing our family more than when we lived in one place. Here’s a breakdown of our nights with friends and family over the last six years:
July 2 to the end of 2017: 32 nights
2018: 90 nights
2019: 83 nights
2020: 167 nights
2021: 29 nights
2022: 27 nights
So far in 2023: 15 nights
We spent significant time with each of our parents in March through August of 2020 as much of the world locked down. However, the nights since August 2020 are lower than pre-pandemic since we now stay in our RV (either in the driveway or a nearby campground) while visiting most friends and family members.
Related: 43 real-world family travel tips that actually work
104 nights in transit
Over the past six years, I’ve spent 101 nights in flight or sleeping in airports. I typically avoid overnight flights, but sometimes overnight flights are unavoidable (and they’re enjoyable if I book a lie-flat seat or luck into a row to myself in economy).
If I have an overnight layover at an airport, I’ll book a hotel if the layover is long enough and I can find a modestly priced hotel on-site or with a free shuttle. But sometimes the layover is too short, or it just doesn’t make sense to get a hotel. In these cases, I’ll usually sleep in a lounge — ideally one with a sleeping area or at least lounge chairs — or in a Minute Suites (or a similar type of space) that participates in Priority Pass.
I’ve also spent three nights on trains, including two on the Amtrak Empire Builder from Portland, Oregon, to Chicago and one on a Trans-Mongolian train from Ulaanbaatar, Mongolia, to Hohhot, China. I thoroughly enjoyed both experiences, so it’s surprising that I haven’t taken any other overnight trains in the last six years. However, low-cost flights on many routes served by overnight trains often make flying a more convenient and less expensive alternative.
Related: 11 of the most scenic train rides on Earth
90 nights in vacation rentals
Vacation rentals are the accommodation of choice for many digital nomads, especially those who stay in each location for at least a month and appreciate having their own kitchen. And I spent 39 nights in vacation rentals in 2017 after becoming nomadic July 2.
However, one particularly bad Airbnb experience in 2018 and an increasing interest in hotel elite status caused me to switch most of my nights to hotels instead of vacation rentals. I stayed in vacation rentals for 17 nights in 2018 and 20 nights in 2019. I only stayed in one vacation rental each in 2020 (for three nights), 2021 (for two nights) and 2022 (for two nights). And so far, I’ve only stayed in one vacation rental (for seven nights) in 2023.
On average, I paid $53 per night for vacation rentals across my six years as a digital nomad. My least expensive vacation rental was $17 per night for a private studio apartment in Da Nang, Vietnam, that I booked through Airbnb. And my most expensive vacation rental was $129 per night for a waterfront apartment in Auckland, New Zealand, through Hotels.com.
I’ll still stay in vacation rentals when they’re my best option. But I generally prefer to stay at hotels for consistency and to earn and use my elite status perks.
Related: When a vacation rental makes more sense than a hotel
259 cities in 52 countries and territories
Finally, let’s talk about destinations. Over the last six years, I’ve visited 259 cities in 52 countries and territories. Here’s a look at the number of nights I stayed in each:
1,253 nights: United States of America (including 318 nights in hotels or vacation rentals)
88 nights: Germany
69 nights: Japan
56 nights: Australia
54 nights: South Africa (including 32 nights in or near South African national parks)
36 nights: Dominican Republic
27 nights: Maldives, Thailand
24 nights: Spain
22 nights: Hong Kong, Malaysia
21 nights: New Zealand, Serbia, Vietnam
20 nights: Canada, Colombia, Italy
19 nights: India
18 nights: Netherlands, United Arab Emirates
16 nights: Singapore
14 nights: Bahamas, French Polynesia, Indonesia
13 nights: Fiji, South Korea
11 nights: Brazil, Mongolia
10 nights: China
Nine nights: Bulgaria, England, France, Pakistan
Eight nights: Bosnia and Herzegovina, Latvia, Liberia, Mexico, Sri Lanka
Seven nights: Greece, Guam
Six nights: Turkey
Five nights: Belgium, Marshall Islands
Four nights: Sweden
Three nights: Argentina, Chile
Two nights: Panama
One night: Ethiopia, Finland, Ireland, Northern Mariana Islands, Taiwan
As you can see, I would have spent the most time in the U.S. even if the coronavirus pandemic hadn’t kept me in the country for much of 2020 and 2021. And interestingly, even my most visited country outside the U.S. (Germany) accounted for just 88 nights across the last six years.
I also visited 14 other countries and territories before becoming a digital nomad. So, although I’m not striving to visit every country in the world, I’ve visited 66 different countries and territories so far. My husband and I are trying to visit a few new-to-us countries each year while also returning to some of our favorite destinations like Germany, Japan, South Africa, Australia and Hong Kong.
Related: The 18 best places to travel in 2023
Bottom line
I feel incredibly thankful for the last six years I’ve spent as a digital nomad. I’ve grown significantly as a person and content creator while traveling full-time.
And I’ve had some amazing experiences, including swimming with manta rays in French Polynesia and the Maldives, watching a sea turtle dig a nest and lay her eggs on a Florida beach, staying at some awesome resorts (Six Senses Laamu, Six Senses Yao Noi and Alila Fort Bishangarh immediately come to mind), and overnighting in second-class hard bunks on a Trans-Mongolian train.
But it’s not these epic experiences that keep me on the road. After all, I could enjoy many of these experiences on vacation. Instead, the daily things like being surrounded by languages I don’t know, enjoying delicious local foods and exploring new cities and neighborhoods on foot keep me attached to the digital nomad lifestyle.
On Monday, a trio of researchers from the San Francisco Fed released an economic letter pondering what was different about the latest housing boom.
The reason they’re asking this question is because home prices are now nearly back to their pre-recession peak. Uh oh?
In some states, they’re actually higher, but I suppose nationally they’re still below.
Obviously this has some folks worried we could be in for another housing crisis seeing that the peak prices seemed ridiculous back in 2006, less than 10 years ago.
The good news, in their eyes, is that this time things are different. Famous last words? Probably, but let them tell you why.
During the prior housing boom, both the home price-to-rent ratio and household leverage (as measured by mortgage DTI) increased together in what they refer to as “a self-reinforcing feedback loop.”
Basically, home prices kept climbing and credit kept loosening to keep up. So you had home prices that were out of reach that could only be purchased with increasingly flexible financing terms.
So we saw zero down mortgages, stated income mortgages, option arms, which allowed borrowers to make a negative amortization payment, and other exotic loan features.
Of course it all came crashing down, but we were able to bounce back over the past decade thanks to reduced housing inventory, super low mortgage rates, better underwriting, and so on.
This Time It’s Different
The researchers claim it’s a lot different this time around because there’s a “less-pronounced increase in housing valuation” coupled with a decline in household leverage.
In other words, home prices haven’t risen as much relative to rents, which are skyrocketing, and those who do buy homes are putting more money down and taking on healthier monthly payments.
While there are zero down options kicking around, most new homeowners put down more money when buying these days.
Interestingly, even though there are low-down payment options, such as FHA loans, which require just 3.5% down, or the new Fannie/Freddie 3% down option, the market might actually demand higher.
You see, it’s hard to get your offer accepted these days, so coming to the negotiating table with your 3% or 3.5% down payment might not get much notice.
Instead, the sellers might favor the buyer willing to put down 10% or 20%.
Additionally, even though there are low-down payments programs available, borrowers actually need to qualify these days.
You can’t just say you make $10,000 a month working the drive through window anymore. Yes, that probably happened a lot in 2006.
But even the researchers are quick to point out in their own paper that, “the phrase “this time is different” should be met with a healthy degree of skepticism.”
It seems they know themselves that it’s foolish to think like this, though they go on to talk about how things appear a lot better than prior to the earlier crash.
For instance, the home price-to-rent ratio reached an all-time high in early 2006, but currently sits about 25% below the bubble peak. You can partially thank surging rents for that.
Front-end DTI ratios (housing payments relative to income) also hit an all-time high in late 2007, meaning homeowners were highly leveraged at a time when home prices were topping out.
We all know what happened next.
Where Do We Go From Here?
Now things get interesting. While it’s great that this latest boom has kept home prices in check relative to rents, and household mortgage debt isn’t completely out of control, it doesn’t mean we’re good to go.
I’m sure there was a time during the prior boom (and other booms for that matter) when everything looked peachy.
Then a few short years later, we’re all asking ourselves how this could have happened again.
As the researchers aptly point out, “policymakers and regulators must remain vigilant to prevent a replay of the mid-2000s experience.”
But will they? We recently introduced 3% down payments and Fannie and Freddie are pushing lenders to offer the product more to cash strapped borrowers.
There’s also chatter about another FHA premium cut to spur lending as if anyone is holding back for that reason at the moment.
Home prices are also creeping higher and higher to a point where we’re at the very least facing an “affordability crisis.”
In fact, some parts of the country won’t be affordable for a full 30 years to some prospective home buyers.
And how exactly will we unload all these pricey homes in the next several years, especially if mortgage rates go up, as they’re projected to?
Perhaps raising acceptable LTVs again will be the answer. Or maybe non-QM lending will finally get legs with some new form of fancy stated income underwriting.
I don’t know, but it sure feels like we’re headed down the very same path we just got off a few years ago.
But maybe this just isn’t your father’s (or mother’s) housing market any longer. Gone are the days of 20% down payments, a mortgage that is held by your local bank, and slow but steady appreciation.
Today, it’s rampant speculation, hedge funds, booms and busts followed by more booms and busts, perhaps because real estate has become such an investment obsession as opposed to a place to lay your head.
Watch about Zillow…your Zestimate now has company.
Today, Redfin announced the availability of the so-called “Redfin Estimate,” which is the online real estate brokerage’s answer to the Zestimate.
Similar to the Zestimate, the Redfin Estimate is an automated home-value estimate that is displayed on home listing pages throughout Redfin, both those for sale and those off the market.
When viewing homes on Redfin, it will be listed next to the last-sold price for homes not on the market and below the list price for those currently on the market.
Redfin Estimate Has Lowest Error Rate
The Redfin Estimate is apparently more accurate
Or at least yields a lower error rate relative to its competitors
Thanks to the large amount of data that backs it up
So you might find that the estimated value is more on point
Redfin claims its new home value estimate has the lowest published error rate of any of its competitors because it’s driven by more data.
That error rate is 1.96% for homes that are currently for sale and 6.23% for off-market homes.
In other words, the Redfin Estimate will be within 1.96% of the actual sales price half of the time for a listed home and within 6.23% of the eventual sales price of non-listed homes.
It’s more accurate for homes that are listed because more data is available on such homes.
And while it might be the lowest, it can still be way off, as their own error rates above clearly show.
The Redfin Estimate factors in more than 500 data points about the property, the neighborhood, and the real estate market to come up with the end result.
Additionally, because Redfin has 100% access to Multiple Listing Services (MLSs), it can dig a little deeper into the property and determine things like if the property is located on a busy street, or if it has a water view.
This, combined with “today’s best cloud technology,” gives users a better home estimate, though still no substitute for a proper home appraisal.
Redfin Estimate Shows You Comps
The estimate will show you the comparable sales used
So you can determine if the price they came up with makes sense
If the homes they used don’t seem like good matches
You can adjust the price in your head either up or down depending on whether you feel the comps they used were too good/bad
While the estimates are still fishy at best, based on my own searches, they do provide the comps used to come up with the estimate, which is nice.
At the top of any property page on Redfin that contains a Redfin Estimate (more than 40 million homes in 35 markets), you can click on the newly added Redfin Estimate tab.
It will take you to a page dedicated to the property’s estimated value that displays six comparable properties that sold nearby recently.
This will give you real insight into how they actually come up with your home’s value. However, I’ve seen some outliers in the comps so it’s still powered by a machine susceptible to making mistakes.
In other words, take the estimates with a grain of salt as you would other automated estimates. If you have concerns about their estimate, there’s also a link to a feedback form below the comps.
The comps are apparently chosen using a blend of proximity, similarity, and how recently they sold.
Redfin Estimates are updated daily for homes that are currently listed for sale, and weekly for off-market properties.
Changes will likely be more frequent in fast-paced markets where new comp sales are generated more quickly.
Don’t See a Redfin Estimate?
It’s possible you won’t have a Redfin Estimate
Assuming your property lacks recent sales comps
Or is too unique to properly appraise
Real estate agents can also remove it if/when they list a property to avoid any disputes
In some cases, you may not see a Redfin Estimate on the property page. This could be due to limited data for the property in question, or if the city itself isn’t covered.
For example, if not enough similar properties sold next to yours in the past year, an estimate might not be generated.
Perhaps more interesting is the fact that Redfin agents can remove Redfin Estimates for properties on the market at the owner’s request.
So if an owner doesn’t want the public to see it, maybe it’s lower than they’d like, they can opt out of displaying valuations for the home.
The agent simply deselects the “Allow Automated Valuations” option within the Multiple Listing Service.
The Redfin Estimate recently went live in Dallas, Detroit, and Minneapolis.
Is It Accurate?
Like most of these automated valuation tools
Your results may vary (widely)
In some cases the price might be spot on
But it others it could be far off, with listed homes generally more accurate
Now the million-dollar question. Is the Redfin Estimate accurate?
While they say they have the lowest published error rate, they also admit that, “there will always be estimates for individual homes that are not accurate.”
I took the new tool for a spin and compared it to Zestimates for the same properties.
What I found in my initial testing was that the Redfin Estimate was sometimes higher and sometimes lower than Zillow’s Zestimate.
And often by a significant amount; we’re talking more than $100,000 on a sub-million dollar home. In fact, I couldn’t find any properties that had similar estimated values between the two websites.
If anything, this might just lead to more confusion from both prospective home buyers and home sellers. But what can you do.
My guess is home sellers will point to whichever estimate is higher, while home buyers will point out the lower estimate. Fun times ensue.
My Experience with the Redfin Estimate
I think they still have a lot of work to do
To make it more consistent across like properties
Overall it’s the probably the best free estimate around because it’s the most up-to-date
But not everyone will be satisfied due to disparity among very similar homes
Now that it has been around for a while, I figured I’d check back in to let you know my thoughts. In general, Redfin Estimates tend to be higher than Zestimates, at least in my personal experience.
This could have to do with the fact that Redfin data seems to be more up-to-date. But I’ve also come across some pretty glaring disparities, especially for condos in the same complex with the near-exact same square footage.
That doesn’t sit well with me, and really doesn’t make any sense. I actually reached out to Redfin about this issue and aside from a boilerplate response about them being “just estimates” and based on a number of factors, was told that if you list your home, their system will update to display the new listing information and the Redfin Estimate will automatically update, typically within a day.
I don’t know if that means some sort of special data refresh, but as I noted above, Redfin Estimates are updated daily for currently listed properties, and weekly for off-market properties.
Anyway, it appears that in some cases homes sold recently have higher Redfin Estimates, or perhaps “more updated” ones than homes that haven’t sold in years. This seems like a pretty big discrepancy or algorithmic problem that may need to be resolved in the future.
For me, the estimate shouldn’t depend on when it was last sold. That should have zero bearing.
Update: An updated version of the Redfin Estimate released on October 2st, 2016 is apparently 9.7% more accurate for on-market homes and 7.8% more accurate for off-market homes compared to the original version.
Homes for sale will be within 1.8% of their expected sales price half of the time, while off-market homes will be within 6.28% of the sales price (if listed) half the time.
For some reason, they seem to have more trouble with off-market homes…
Apprasial management company Valligent, which was recently acquired by enterprise risk management and collateral valuation services provider VerosTM, announced today that it has integrated with the ICE Mortgage Technology platform Encompass.
The Encompass platform by Ice Mortgage Technology offers innovative solutions for the mortgage industry and provides seamless integration capabilities and a marketplace for various mortgage-related products and services.
The goal of the integration is to provide mortgage industry stakeholders with access to a comprehensive range of collateral valuation products and services. In addition, the recent collaboration between Valligent and Veros offers lenders a unified ecosystem of solutions for a compliant and accurate valuation process.
“Integrating with Encompass by ICE Mortgage Technology was always part of the plan when we acquired Valligent,” Darius Bozorgi, CEO of Veros Software, said. “Our primary focus has always been to offer our customers a streamlined experience that encompasses a full spectrum of appraisal, valuation data, analytics, and related collateral risk management solutions. Our partnership with ICE Mortgage Technology empowers Veros and Valligent to enhance efficiency for all our clients. Together, we can expand our products and services to meet the demands of the digital mortgage industry.”
With the Valligent and Encompass integration, lenders gain access to a technology solution that caters to their property valuation and collateral risk management needs. The suite of valuation products includes traditional appraisals, AVMs, desktop valuations, and the four-hour evaluation product designed for equity lending.
Founded in 2003, Valligent is an appraisal management company based in California that specializes in providing comprehensive valuation services to the mortgage industry. Its new integration with the Encompass platform enables streamlined access to a wide range of collateral valuation products and solutions.
This content was generated using AI and was edited by HousingWire’s editors.