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Apache is functioning normally

While mortgages often pave the way to homeownership, a new report from Goldman Sachs Group revealed that cash has truly been king over the past year and change.

In fact, the investment bank’s economists revealed that more than half of all homes that sold in the United States last year were purchased with cold, hard cash.

The same goes for all the homes sold so far in 2013 – more than 50% are apparently being scooped up sans mortgage, which explains why prospective buyers are having so much trouble getting their hands on their dream home.

The researchers gathered their data from four different sources, including home sales figures from the Census Bureau and National Association of Realtors, along with mortgage origination data from the MBA and Lender Processing Services.

Who Is Forgoing the Mortgage?

While it’s not entirely clear who is using cash, most speculate that it is the hedge funds and other groups who have been buying bundles of single-family homes on the cheap, following Buffett’s advice to invest in residential real estate.

For the record, the Oracle of Omaha also recommended that Americans get a low rate, long-term fixed mortgage.

There is also the wealthy, who have forgone mortgages to beat out bidders who must qualify for a mortgage to close the deal. Sellers are much more willing to take an all-cash offer, seeing that lenders have become a lot more particular in recent years.

And finally, there are foreign investors, who are trading in their piles of cash for residential real estate, thanks to bargain basement prices relative to where they stood several years earlier.

20% of Home Sales All Cash Before the Crash

Before the housing boom turned to housing crisis, the cash-share was a lot lower, closer to 20%, per the economists.

By dollar volume, around 30% of purchases were furnished with cash, a number that has since doubled.

Looked at another way, only about 44 cents of every $1 of homes being sold is currently financed with a mortgage, compared to 67 cents before the crisis took hold.

There are a number of reasons why financing numbers are down. For one, home sales have been a lot lower since the crisis. While things are beginning to pick up, they’re nowhere close to where they once were.

For example, purchase-money loan originations hit about $1.5 trillion during the peak in 2005, but have since fallen closer to $500 billion over the past couple years.

While that’s part of the story, Goldman estimates that 40% of the decline is the result of less financing per home.

There’s also the idea that buyers are coming in with larger down payments, with zero down financing largely a thing of the past.

The upside is that purchase mortgages seemed to have bottomed. The economists see purchase-loan volume increasing about 50% to $750 billion in 2014, and to $1.1 trillion by 2016.

So there is hope for the purchase market, it just might take a while, which is bad news for brokers and loan officers trying to make a living, especially with refinance business expected to tank.

Read more: When Qualifying for a Mortgage Isn’t Enough

Source: thetruthaboutmortgage.com

Apache is functioning normally

Asset turnover ratio is a calculation used to measure the value of a company’s assets relative to its sales or revenue. It’s used to evaluate how well a company is doing at using its assets to generate revenue.

Similar to cash flow, the asset turnover ratio compares the company’s total assets over the course of a year to its sales. In simpler terms, it shows the dollar amount the company is earning in sales compared to the dollar amount of its assets. It can be calculated annually or over a shorter or longer period of time.

Why Is Asset Turnover Ratio Important?

Although having cash on hand is important for growing and maintaining a business, other types of business assets are also important, as is how a company chooses to use them. Liquid assets can include cash, stock, and anything else the company owns that could be easily liquidated into cash. Fixed assets are things the company owns that are not as easily turned into cash. This could include real estate, copyrights, equipment, etc.

For business owners, asset turnover ratio can be important when applying for loans and learning about their company’s cash flow. A higher asset turnover ratio indicates that a company is efficiently generating sales from its assets, while a low ratio indicates that it isn’t. A higher asset turnover ratio also shows that a company’s assets don’t need to be replaced or discarded, that they are still in good condition.

A higher ratio is preferable for investors, as well. Investors can look at the asset turnover ratio when evaluating the risk of investing in a company, or when comparing similar companies to one another. Each industry has different norms for asset turnover ratios, so it’s best to only compare companies within the same sector. For instance, a utility company or construction company is more likely to have a higher number of assets than a retail company.

Know, too, that asset turnover ratio is only one of many calculations that comprise the list of financial ratios that investors can employ.
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Formula for Calculating Asset Turnover Ratio

It’s fairly simple to calculate asset turnover ratio, which is one reason it’s such a useful tool for investors. Asset turnover ratio can be calculated using the following formula, which divides total (net) sales or revenue by average total assets:

Asset turnover = Net Sales / Average Total Assets

Which can also be shown as:

Asset turnover = Net Sales / ((Beginning Assets + Ending Assets) / 2 )

Where:

Net Sales = Gross annual sales minus returns, allowances, and discounts. Total sales can be found on a company’s income statement (typically part of an earnings report).

Beginning Assets = Assets at the beginning of the year

Ending Assets = Assets at the end of the year

Total Assets = Generally a company will include calculated average total assets on their balance sheet. However, sometimes additional calculations will need to be made.

Calculating Total Assets

The value of a company’s total assets includes the value of its fixed assets, current assets, accounts receivable, and liquid assets (cash).

•   Accounts receivable are accounts that hold expected revenues that come from when customers use credit to buy goods and services.

•   Fixed assets are generally physical items such as equipment or real estate.

•   Current assets are things that the company predicts will be converted into cash within the next year, such as inventory or accounts receivable that will be liquidated.

The formula for calculating total assets is:

Total Assets = Cash + Accounts Receivable + Fixed Assets + Current Assets

Example of Calculating Asset Turnover Ratio

To give an example of the ratio calculation, if a company has $2,000,000 in average assets and $500,000 in sales over the course of a year, the calculation of its asset turnover would be:

500,000 / 2,000,000 = 0.25 = 25% asset turnover ratio

Interpreting Asset Turnover

Sticking with the example above, we’ve calculated a 25% asset turnover ratio. What that means, exactly, is that the company’s assets generated 25% of net sales over the course of the year. In other words, every $1 in assets that the company owns generated $0.25 in net sales revenue. Again, this can be helpful when using various business valuation methods and trying to determine whether an investment fits your overall strategy.

Factors that can Cause Low Asset Turnover

There are several reasons why a company might have a low asset turnover. These include:

•   More production capacity than is needed

•   Inadequate inventory management

•   Poor methods of customer money transaction

•   Poor use of fixed assets

The ratio can also change significantly from year to year, so just because it’s low one year doesn’t mean it will remain low over time.

What Is a Good Asset Turnover Ratio?

Investors can use the asset turnover ratio as part of comparing and evaluating stocks. But what is considered a good number for asset turnover?

In general, the higher the number the better — and a number higher than 1 is ideal. This is because a value greater than 1 means the dollar value generated by assets is greater than the dollar amount that the assets cost. A higher number means a company is generating sales efficiently and not wasting assets.

Conversely, a number less than 1 means that assets are generating less than the amount of their dollar value. If a company isn’t effective at generating sales with its assets, it most likely wouldn’t be a great investment — which, again, is important to know if you’re building an investment portfolio.

Since each industry has its own standards for a “good” asset turnover ratio, there isn’t one specific number to look for. For companies in the utilities industry, ratios are generally lower than companies in retail.

Companies can work on improving their asset turnover ratio by increasing sales, decreasing manufacturing costs, and improving their inventory management. Other ways they can improve include adding new products and services that don’t require the use of assets, and selling any unsold inventory still on hand.

What Does a High Ratio Imply About a Company?

If you’re using technical analysis techniques to get some clarity around a company as a possible investment target, you’ll want to get down to brass tacks: What, exactly, is a high ratio telling you?

The answer is that a high ratio implies that a company is in good standing. It’s generating value with its assets, which can signal that it may be a solid investment. But, again, there are no guarantees.

Limitations of Using Asset Turnover Ratio

While asset turnover ratio is a useful tool for evaluating companies, like any calculation, it has its limitations. It is useful for comparing similar companies, but isn’t a sufficient tool for doing a complete stock analysis of any particular company.

Also, a company’s asset turnover ratio could vary widely from year to year, making it an unreliable measure for potential long-term investments. Even if the ratio has been similar in years past, this doesn’t mean it will continue to remain consistent. However, investors can look at the long term trendline of the ratio to get a general indication of whether it’s improving or not.

Since asset turnover is typically calculated once a year, if a company made even a few large purchases this could skew their ratio. This is fairly common, as companies might have certain monthly expenses but occasionally need to invest large sums of money into equipment, office renovations, or other common business needs.
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Drawbacks of Asset Turnover Ratio in Stock Analysis

The limitations outlined above play into some of the potential drawbacks of the asset turnover ratio when analyzing stocks, too. Mostly, it comes down to the fact that as a single ratio, which doesn’t reveal the total health or financial picture for a single company. For that reason, it’s probably a good idea to use the ratio in tandem with other analysis tools and methods.

For instance, other ratios that can be used to gain an understanding of a company’s financials are the debt-to-equity ratio, its P/E ratio, and even looking at its net asset value.

The Difference Between Asset Turnover and Fixed Asset Turnover

Fixed asset turnover and asset turnover are two different ratios that can tell you about a company, and for investors, it’s important to understand the difference between the two.

In short, and to recap, asset turnover ratio looks at average total assets of a company — “total,” in this case, being the important qualifier. On the other hand, fixed asset turnover ratio looks at a company’s fixed assets to measure performance.

Investing With SoFi

Knowing how to calculate asset turnover ratio can be useful for investors who are evaluating companies as they start building an investment portfolio. While the formula is simple — Asset turnover = Net Sales / Average Total Assets — it’s important to remember that the calculations work best when comparing companies within one industry, rather than across various industries.

Additionally, there are other metrics by which to evaluate a company or value its stock. The asset turnover ratio can be helpful, but it has its limitations. As always, speak with a financial professional if you feel like you’d benefit from more guidance.

Ready to invest in your goals? It’s easy to get started when you open an investment account with SoFi Invest. You can invest in stocks, exchange-traded funds (ETFs), and more. SoFi doesn’t charge commissions, but other fees apply (full fee disclosure here).

For a limited time, opening and funding an Active Invest account gives you the opportunity to get up to $1,000 in the stock of your choice.

FAQ

How can you improve asset turnover ratio?

Some ways that a company can improve its asset turnover ratio include increasing its revenues, selling some of its assets, renting or leasing assets rather than purchasing them, and optimizing its inventory and ordering systems.

Is an asset turnover of 1.5 good?

Yes, an asset turnover ratio of 1.5 is a sign that a company is on solid financial footing. It indicates that a company’s total assets are generating enough revenue from its current assets.

Can asset turnover ratio be negative?

Yes, and a negative asset turnover ratio would be a signal that a company lost money during the year, rather than earned it. A negative number represents that its liabilities or expenditures exceeded its assets.

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Source: sofi.com

Apache is functioning normally

Nevada is known for its dry climate, untouched natural wonders, and tall, forested mountains. The majority of the state is a plateau, with deep valleys and tall peaks. It has many climate zones, ranging from warm mediterranean in the western part of the state, to vast desert in the south, to high desert in the north. 

Weather patterns generally range from dry and hot in metros like Las Vegas, to dry and cooler in areas such as Elko and Genoa. However, throughout the state, weather can often turn into natural disasters, like flooding, wildfires, and heat waves. When these happen, it’s essential to be prepared. 

So what are the most common natural disasters in Nevada, how are they changing, and what can you do to prepare? Whether you’re planning a move to Las Vegas or are looking at apartments in Reno, read on for everything you need to know. 

1. Nevada drought

Drought is a serious issue in Nevada, which is already the driest state in the US, receiving an average of 9 inches of precipitation per year. The state is one of many in the Colorado River Basin that has been dealing with a long-term “megadrought.” This drought hit a peak in spring 2022, when 100% of Nevada’s population was experiencing severe to exceptional drought. This prompted the federal government to enact a tier two water shortage for the state, which is still in place. 

The state’s water supply primarily comes from the Colorado River at Lake Mead, which has been shrinking due to chronic overuse and reduced precipitation. To help, Nevada has been working with the other six “basin” states who rely on the Colorado River to reduce water use and prevent an emergency that would require dramatic Federal action. Recently, the Lower Basin States of California, Arizona, and Nevada pledged to save around 1 billion gallons of water by 2026. 

Southern Nevada has already adopted extremely strict water conservation measures, reducing water usage by 26 billion gallons compared to 2002, even though its population increased by over 750,000. 

Droughts are exacerbated by warmer average temperatures, and can also increase the frequency and severity of other disasters, such as forest fires, dust storms, and heat waves.

How to prepare for drought in Nevada

Because Nevada has been experiencing drought for decades, it’s important to adapt your lifestyle to accommodate lower water use and prepare for future restrictions. For example: 

2. Nevada wildfires

Wildfires are a major disaster in Nevada. In fact, from 2000-2018, wildfires burned more than double the number of acres compared to 1980-1999. Recently in 2018, the Martin and Sugarloaf Fires burned nearly 1 million acres. While most wildfires occur in the northern parts of the state, they can happen anywhere. 

Most people don’t live within 20 miles of a recent active wildfire, excluding the mountainous cities of Reno and Carson City. However, according to data from First Street Foundation, 60% (733,893) of properties in Nevada are at risk of being affected by a wildfire in the next 30 years. Importantly, only 27% of properties in Las Vegas are at risk of being impacted by a wildfire, with most risk confined to Summerlin South, Enterprise, and nearby areas. 

The state’s dry season from May through September (excluding monsoons), combined with parched forests, sets the stage for devastating fires that can spread rapidly. Prolonged drought and heat waves exacerbate the severity of wildfires. The primary causes of wildfires in Nevada are human activity and monsoon lightning. And in southern Nevada, where there are fewer trees, most wildfires are caused by target shooting and fireworks. 

Wildfires can also devastate the landscapes and hillsides of northern Nevada, making them more susceptible to flooding, landslides, and mudslides, especially during intense rainfall. 

How to prepare for wildfires in Nevada

If you intend to move to Nevada or already live in the Golden State, preparing for wildfires is essential. Here are some tips to help: 

  • Create a defensible space around your property by removing flammable materials and trimming or removing dry vegetation. 
  • Install interior and exterior sprinkler systems, if you have access to enough water and drought restrictions don’t prohibit it.
  • Install a generator to keep the power running in case of power outages. 
  • Stay updated on fire weather forecasts and follow all fire restrictions. 
  • Prepare for poor air quality by purchasing an air purifier and installing HEPA air filters on air conditioning units.
  • Build an emergency kit with essentials and valuable documents.
  • Ensure your insurance adequately covers fire damage, or, if the rising premiums are too high, understand the risks of going uninsured. 
  • Work with your community. This is the most successful way to mitigate fire risk in your neighborhood.

3. Nevada heat waves

Hot, dry weather is common throughout Nevada, especially in the Southern parts of the state, where most of the population lives. Summer temperatures can reach over 100 degrees Fahrenheit throughout the state, especially in July and August. Most recently, during a heatwave in 2023, Las Vegas recorded temperatures above 100 degrees every day in July, with two weeks hitting a daily average temperature of 100.7. The city also hit 110 ten days in a row. 

According to First Street Foundation, 66% (1.2 million) of homes in Nevada currently have a Severe Heat Factor, meaning the average daily temperature is at least 95 degrees Fahrenheit for the hottest month of the year. The overwhelming majority of homes at risk are in Clark County, which is home to Las Vegas. 

Cities often feel the heat worse than rural areas due to the urban heat island effect. Las Vegas is the worst heat island in the country, experiencing a 5.76 degree difference between urban and rural temperatures. Las Vegas is also the fastest warming city in the US, with average temperatures increasing nearly 6 degrees since 1970. 

How to prepare for heat waves in Nevada

Heat waves can be intense and cause health issues, including heat stroke and dehydration. As such, it’s essential to be prepared when they arrive. Here are a few ways to stay cool in extreme heat:

  • Stay updated on forecasts and advisories.
  • Prepare a meal plan that doesn’t involve cooking indoors. 
  • Stay hydrated before, during, and after a heat event. 
  • Make sure your air conditioning is functioning properly.
  • Install a generator in case the power goes out due to strained utility systems. 
  • Limit outdoor activities to the early morning and late evening. 
  • Switch from incandescent to LED light bulbs. 
  • Stock up on lightweight, protective clothing.
  • Close blinds, shades, and curtains. 

4. Nevada flooding

Nevada is known for its dry climate, but it’s actually very prone to flooding. 11% of properties in Nevada have a chance of being severely affected by flooding in the next 30 years, with most located in the mountains and highlands. 

Nevada’s flood risk profile is marked by its dry climate, which makes it particularly susceptible to regional and flash floods year-round. Some cities also have a risk of riverine flooding. Recently, in February and March 2023, the winter storms that hit the Sierra Nevadas prompted a disaster declaration in Nevada for flooding, landslides, and mudslides. And, later in the year, an intense late summer monsoon caused flash flooding throughout Clark County. 

Nevada is also prone to snowmelt flooding. The Carson Range and nearby peaks in Northwestern Nevada can receive substantial snowfall in the winter, often through winter storms and blizzards. And as temperatures rise in the spring and summer, this snow can melt rapidly, especially during an early heat wave. 

How to prepare for flooding in Nevada

In Nevada, preparing for a flood is essential, particularly during sudden intense rain and snowmelt events. Because a large portion of the state is prone to flash flooding, you may not have much time to prepare, so it’s critical to practice and have supplies ready during the spring and summer. Here are a few tips to help:

  • Familiarize yourself with flood risk maps for your area to see your potential risks.
  • Consider flood insurance if you’re in a high-risk zone. 
  • Keep emergency supplies on hand, including non-perishable food, water, medications, and important documents. 
  • Elevate valuable items in flood-prone areas of your home, and install sandbags or barriers if necessary.
  • Invest in flood sensors. 
  • Stay tuned to weather forecasts and alerts, and have a communication plan in place with your family.

5. Nevada earthquakes

Earthquakes are a major risk in Nevada. The state is home to thousands of fault lines, and many regions experience dozens of tiny earthquakes every day. The most notable region is the Walker Lane, which is a trough consisting of thousands of fault lines that pass through most of the Western border of Nevada and into southern California. This is where most geologic activity occurs, although there are notable major faults in the Las Vegas Valley. Reno and Carson City, located along the Walker Lane, are at a particularly high risk, although Las Vegas would suffer far more damage. 

There have been 23 earthquakes with a magnitude 6 or greater since the 1840s, with the most recent being the Ridgequest quakes in 2019. 

While earthquakes are infrequent, they are by far the most destructive type of disaster in Nevada when they hit. Additionally, Nevada can also be affected by earthquakes with epicenters in California, such as the recent quake in the Sierra Nevadas that was felt in Reno. 

How to prepare for earthquakes in Nevada

Earthquakes are irregular but destructive and can cause significant damage to structures, utilities, and water systems. Main shocks can last for minutes, while aftershocks can last for years. They can also strike suddenly, at any time, with only seconds of warning. As such, preparing your home is critical. Here are a few tips to help:

  • Practice drop, cover, and hold on, so you’re ready when a quake hits. 
  • Purchase earthquake insurance to cover some losses in the event of a quake. This is a separate policy that you purchase in addition to regular homeowners’ insurance. It’s also available to renters.
  • Make sure you have a durable, charged communication device in case of an emergency. 
  • If you rent, ask your landlord about the building’s seismic history. 
  • Keep your emergency kit stocked, updated, and accessible. 
  • Anchor heavy items to the wall, strap down expensive electronics, and secure small valuables. 
  • Brace your water heater according to state law.
  • Ensure your gas lines have flexible connections.
  • If you live in a house built before 1980, it will likely need to be retrofitted. Don’t do this yourself; hire a seismic retrofitting professional. 

Final thoughts on natural disasters in Nevada

Nevada’s climate is diverse, dry, and pleasant. Drought, fire, heat, flooding, and earthquakes make it a varied and unpredictable place to live. Many cities in Nevada, especially Las Vegas, continue to be the most popular migration destinations, primarily due to people’s desire for sun. Because of this, the state’s population has increased by over 70,000 since 2020.

If you’re considering moving to Nevada or already call The Silver State home, make sure you’re prepared for natural disasters and long-term weather events. Understanding your risks and adequately preparing are helpful to make the most out of living in Nevada. The National Weather Service and University of Nevada, Reno offer experimental maps that show forecasted and past risks in any given area, which can help you prepare. 

Lastly, many natural disasters are worsened by climate change. So no matter how you prepare, reducing your carbon footprint and pushing for systemic change are the best long-term solutions. 

This article is for informational purposes only. Individual results may vary. This is not intended as a substitute for the services of a licensed and bonded home services or disaster prevention professional. Always seek expert advice and follow all official guidance before, during, and after a disaster.

Source: redfin.com

Apache is functioning normally

Strong household spending and a resilient labor market could help the U.S. economy avoid a recession in 2024, the American Bankers Association’s Economic Advisory Committee says.

Jamie Kelter Davis/Bloomberg

Resilient household spending and a strong labor market will likely help the U.S. economy avoid a severe recession, according to a new forecast from economists at some of the country’s biggest banks.

The economy is poised to grow at a rate of less than 1% through the second quarter of 2024, the American Bankers Association’s Economic Advisory Committee said Monday. That is low compared with the second quarter rate of 4.1% but well above the dire predictions some economists once harbored for 2024.

“The odds of a soft landing have improved quite dramatically in the near term,” said Simona Mocuta, chief economist at State Street Global Advisors and the chair of the ABA’s committee of economic advisors.

The specter of recession has weighed on banks for close to 18 months, since the Federal Reserve began its campaign of rate hikes in March 2022. The health of the U.S. economy plays a key role in the profitability of banks, so the prospect of a contraction in economic growth raised red flags for banks large and small. The likely avoidance of one of the harsher economic scenarios — a severe recession — is good news for banks, which are also contending with generally tighter profit margins and increasing competition for customers.

Robust consumer spending has helped boost the U.S. economy so far in 2023, the ABA economists noted. Low unemployment and strong wage gains mean households have been able to keep up with many of their spending habits, even as inflation has persisted.

Inflation is also expected to improve in the coming quarters. Big-bank economists anticipate inflation levels to continue to cool to an annualized rate of 2.2% by the second quarter of 2024, close to the central bank’s target rate of 2%. 

Although the overall economic picture is brighter, economists warn that there are several lingering threats that could make it more difficult for the U.S. economy and banks alike to grow. 

The economists expect businesses to invest less capital in the short term, which could weigh on loan growth at banks. Loan growth at U.S. commercial banks increased 4.5% in the second quarter from a  year earlier, according to Federal Deposit Insurance Corp. data.

About 4.4% of the labor force will be unemployed by the end of 2024, according to the economists’ forecast. A higher unemployment rate could make it more difficult for laid-off workers to make loan payments, potentially boosting the level of charge-offs at banks.

Credit quality reached historic lows during the pandemic, when many creditors offered grace periods and other breaks to struggling borrowers until the economy got back on track. Analysts expect asset quality to continue to deteriorate, with loan-loss increases spreading beyond the credit card and commercial real estate arenas.

“Investors are eager to learn how much higher net charge-offs are expected to go, especially with the student loan moratorium coming to an end,” Jason Goldberg, managing director and senior equity analyst at Barclays, wrote in a recent research note.

Certain elements of the ABA’s advisory committee’s forecast provide a strong contrast to the details issued when the last forecast was issued earlier this year, when economists believed the U.S. was on the edge of a mild recession.

“The tone of the conversation certainly feels much more positive today,” Mocuta said.

The ABA committee includes economists from some of the country’s largest banks. The group meets twice a year to discuss the economic environment and issue forecasts on economic growth, inflation and the trajectory of interest rate moves.

This year’s committee features representatives from U.S. Bank, Wells Fargo, JPMorgan Chase, State Street, Comerica Bank, BMO, TD Bank, PNC Financial Services, Deutsche Bank, First Horizon, Regions Financial, Northern Trust, Wilmington Trust and Morgan Stanley.

Source: nationalmortgagenews.com

Apache is functioning normally

Want to learn how to invest in self-storage? I have stored boxes of my stuff plenty of times over the years and there’s a good chance that you have as well (or perhaps you know someone who has). Investing in self-storage facilities can be a relatively low-risk asset for people looking to diversify their income…

Want to learn how to invest in self-storage?

I have stored boxes of my stuff plenty of times over the years and there’s a good chance that you have as well (or perhaps you know someone who has).

Investing in self-storage facilities can be a relatively low-risk asset for people looking to diversify their income streams. Or, perhaps you’re looking for a full-time income and are looking for your own business to start!

So, what exactly is investing in self-storage?

It is when you put your money into self-storage facilities and rent out units to renters.

I have personally used self-storage facilities for many reasons over the years for a short-term period, and nearly every single time I think about the profitability of it all and how passive it seems to be a self-storage owner or self-storage investor.

There are usually no customers at the facility (I’ve almost always been the only one there when dropping off or picking up), but every unit is being rented. Seems like an interesting way to make money with not too much work!

Plus, over 9% of households pay for self-storage units, and there is a lot of demand for new facilities.

Quick Summary

  • Self-storage investing can be a way to make money and run a business with low expenses
  • There is a lot of demand for storage units, with many businesses having a very long waitlist
  • If you don’t want to run a business, you can also buy shares in an REIT or even just rent out your garage or basement

What is Self-Storage Investing?

To put it simply, self-storage investing is when you invest in storage facilities.

More and more people need storage units for many different reasons such as moving, downsizing a home, needing a place to store something that a person doesn’t have room for (such as an RV or boat), or even businesses that are storing extra inventory.

For example, someone might need a short-term lease to store their belongings due to being in between homes (like if they are moving but their next home isn’t ready yet). Or a person on a long trip may decide to sell their home, but they need a place to store their important items.

If you decide to invest in self-storage, you have a couple of options. You can start by purchasing and owning a facility yourself or passively invest by buying shares in a self-storage REIT (Real Estate Investment Trust). I will be going over each of the options further below.

Related content:

Is Self-Storage a Good Investment?

Yes, deciding to invest in storage units can be a good idea.

According to Neighbor, the average profit margin on a self-storage unit is around 41%, and they typically have high occupancy levels of around 92%.

One of the main positives of investing in self-storage is being able to earn income with less work (you’re not dealing with customers all day long – people tend to store their stuff and not visit it often).

Self-storage facilities usually have low expenses compared to other types of commercial real estate investments. Also, self-storage is usually recession-resistant as people still need to store their stuff.

Another benefit of investing in self-storage is the flexibility it offers because you don’t need very many employees to run a storage lot. Some lots that I’ve been to don’t even have any employees – instead, you call the owner when you want to get your stuff and they then send someone down. People tend to store their stuff and not touch it for a while.

Related: 18 Passive Income Ideas To Earn $1,000+ Each Month

Types of Self-Storage Facility for Investment

When investing in self-storage facilities, you may not know that there are a few different types.

This section will discuss the different self-storage facilities you can invest in.

1. Climate-Controlled Storage

Climate-controlled storage is something that more and more people want these days because it can protect their belongings from temperature changes and humidity.

After all, many places get very hot weather, and storage units can get quite hot inside. You don’t want your things to melt into each other.

These types of units are good for storing items like electronics, artwork, or documents.

Now, your location is important in deciding if you need climate-controlled self-storage, as areas with extreme temperatures or humidity obviously will need AC more. For example, a storage facility in Florida may be more likely to have air conditioning than a facility in Alaska. And, a facility in Alaska is more likely to have heat than a storage unit in Florida.

2. Mixed-Use Storage

Mixed-use storage facilities combine multiple types of storage units in one location.

For example, these types of facilities may have climate-controlled, drive-up, boat, and RV storage all in one place. Many storage facilities are like this. They cater to different customer needs and tend to have a broader target market due to being able to store so many different types of items.

People tend to like these forms of storage as they can store all of their belongings in one place, instead of having their stuff scattered across town.

3. RV and Vehicle Storage

With so many people owning RVs and extra vehicles, the demand for storage has increased over the years.

Also, many neighborhoods simply do not allow for RVs or extra vehicles to be parked in front of their home (or even in their driveway, backyard, etc.), so a storage lot is needed.

Some storage facilities may even just be massive warehouses where people can store their RVs, valuable cars, and boats inside.

We have stored an RV in a place like this many times. We have found the typical rent to be around $5 to $10 per foot for our RV in an indoor parking lot, so you can see how quickly storage revenue can add up! Some businesses even have private RV units, and those fetch a much higher rate, such as $400-$600+ per month.

4. Boat Storage

Boat storage facilities specialize in safe storage for boat owners during the off-season or when not in use. These types of facilities typically have long waitlists too.

Boat storage businesses sometimes have both indoor and outdoor options (or they may focus on one or the other), as well as extra services like boat maintenance, hauling, launching, and more.

Coastal regions or areas with nearby water access (such as Florida) are usually good locations for investing in boat storage facilities as there are more boats, of course.

We have used boat storage facilities many times over the years to store our own boat. The amount you can make per boat can be anywhere from a couple hundred to a couple thousand dollars each month, depending on the location and the type of boat (catamaran vs. small fishing boat, for example) you can store. We have paid anywhere from around $1,200 to over $2,000 a month in the past for boat storage.

5. Drive-Up and Outdoor Storage

This is the type of storage that pretty much everyone has seen, as they are very common.

With this type, customers can drive directly to their storage unit, making loading and unloading much easier. These types of facilities are usually single-story buildings. Many times they do not have AC or heat.

Drive-up and outdoor storage facilities give renters an easily accessible storage solution.

How to Invest in Self-Storage

If you want to invest in self-storage, there are a few different ways to do so.

1. Buy an Existing Self-Storage Facility

One of the easiest ways to enter the self-storage market is by purchasing an existing business, such as those for sale by mom-and-pop operations.

This can save you time as everything is in place and you already have customers with rented units. Yes, you can improve some of their processes, but a lot of the hard work is already done for you.

But, purchasing a facility can be expensive upfront, though, because you will be buying a business with land, a building, and an existing customer base.

Just as an FYI – As you’re looking for storage facilities that are for sale, you may come across different classes. Class A facilities usually are higher-quality climate-controlled storage units, whereas Class B and Class C facilities may be lower-quality.

Buying an existing storage lot can possibly make you more money than investing in REITs (discussed further below), but it also means more hands-on management and responsibility because you will be actively running a business and managing employees.

2. Build a New Self-Storage Facility

There are around 2 billion square feet of storage space in the U.S. alone, but there is a high demand for more. Many self-storage facilities have long waitlists even!

I have called many storage lots only to find out that they had waitlists that were years long. I have even several times called every single lot within a few state radius, and found that every single one had a waitlist.

Yes, the storage business is really in that much demand!

As a self-storage investor, you can take advantage of this high demand and build your own storage facility.

To create a self-storage facility from the ground up, you will need to do the following:

  • Find land to buy – Once you know that an area needs a storage facility, you will need to find land to buy to build on. You will also want to make sure that it is easy to drive to (for example, if you are building an RV storage lot, you don’t want low bridges as the only way to get to your lot because no one will be able to get there then).
  • Build – After you buy the land, you will need to think about what you want your facility to look like, then hire a construction company to build your plan.
  • Open up for business– Once the facility is built, you will need to market it and get customers. You will also want to set up the systems to manage daily operations effectively and as passively as possible.

Self-storage is in demand, so building a new storage business can be a way to get started and make money.

3. Buy Shares in a Real Estate Investment Trust (REIT) That Focuses on Self-Storage

If you want to invest in self-storage without actually owning and managing a business, one way is to invest in an REIT.

REITs are a type of investment that allows you to buy shares in a company that owns self-storage facilities. Think of it like shares of stock in a company that you can buy.

With REITs, you can invest in a portfolio of self-storage properties without physically owning or managing the facilities yourself.

This is more passive because you don’t need to hire employees or do maintenance checks.

4. Rent Your Space on Neighbor.com

If you have extra space in your own home such as a garage, closet, driveway, or spare room, you can rent it out as storage space through a platform like Neighbor.

With this site, you can earn $100 to $400+ each month (the rate you can get depends on demand in your area and the type of storage you are renting out).

Here’s how Neighbor works:

  • Sign up for a free account – Create an account on Neighbor by clicking here.
  • Describe your space – Write a detailed description of your space, including the dimensions, location, and any features (such as air conditioning or heat). Add pictures of the space as well so that potential renters can see what you are renting out.
  • Set your price – Choose how much you want to charge for renting your space.
  • Manage rentals – Connect with interested renters, agree on terms, and manage ongoing rental contracts, all through the Neighbor platform.

You can learn more at Neighbor Review: Make Money Renting Your Storage Space.

Advice for managing a self-storage facility

If you decide to run your own storage facility, then here are my tips for new self-storage operators.

Making money from self-storage

To make money from your self-storage facility, you need to think about what your customers want. So, you may sell amenities to your renters, such as vehicle washing, starting up their vehicle or checking on it, electrical plugins to charge vehicles or RVs, and so on.

You’ll also want to think about how much money it will cost you to actually run the business. Will you need to hire workers? How much will maintenance cost you so that you can keep the facility in good condition?

Security in self-storage facilities

Security is very important for customers when choosing a self-storage facility. Customers care about their stuff and they don’t want anything happening to it, such as it being stolen.

So, you will want to make sure that your facility has a lot of light (especially at night time), security cameras aimed at different angles, and gates with codes. This helps your customers feel safer about leaving their stuff at your storage facility, and also helps to protect your business from liability issues and bad reviews (for example, if a person has their stuff stolen from your facility, they are likely to leave a bad review and this can cause others to not use your storage units as well).

Frequently Asked Questions About How To Invest In Self-Storage

Here are answers to common questions about investing in self-storage.

How can I find a self-storage business for sale?

To find a self-storage business for sale, you can start by searching on websites like LoopNet and BizBuySell. I took a quick look at both of these sites and found many for sale quite easily from anywhere in the hundreds of thousands to in the millions of dollars price range.

What are the best self-storage stocks to invest in?

The best self-storage stocks for you to invest in will depend on your own money goals and the amount of risk you want to take on. Unfortunately, I cannot tell you which is the best self-storage stock, as I am not your financial advisor and I do not know your specific situation. But, I can tell you which ones are popular.

Some of the most popular and best self-storage stocks include Public Storage (PSA), Extra Space Storage (EXR), and CubeSmart (CUBE).

Which self-storage REITs have the best returns?

Real estate investment trusts (REITs) are a popular way to passively invest in self-storage facilities. Several well-known self-storage REITs include Life Storage (LSI), National Storage Affiliates (NSA), and Simply Self Storage (SSS).

Keep in mind that past performance and dividends do not mean that the same will be true in the future, so it’s important to do your own research.

What risks are there with investing in self-storage?

Like with all businesses, there are risks when it comes to self-storage. Some risks include competition, changes in demand, and possible natural disasters that could hurt the facility (such as a severe storm or a flood).

Also, managing a self-storage facility will, of course, require at least some time from you and may even require employees, so you should also think about operational costs and business management.

How profitable can a self-storage business be?

The amount of money that a self-storage business can make depends on many things such as location, demand, and operating costs.

Can owning a self-storage unit generate passive income?

Having a self-storage facility can earn you passive income through rental fees. But, managing a self-storage facility also requires that someone works at the business, to check people in, show units, and check on the property. You could hire employees so that it is more passive for yourself.

You can also earn passive income by investing in self-storage REITs or stocks instead of owning and running a storage facility.

Does self-storage do well in a recession?

Self-storage in the past has performed relatively well during recessions, as people often downsize their homes or need temporary storage. Of course, though, the past doesn’t mean that it will always do well. So, it is always best to do your research and prepare as best as you can.

What is the future outlook for self-storage?

The future for self-storage looks to be positive, as there is a lot of demand for storage units and I’m still constantly seeing waitlists everywhere. In fact, whenever I need to store something even for just a few months, I’m always being told that I need to call a year in advance for a spot.

Many storage facilities have a high occupancy rate, long waitlists, and cannot keep up with demand.

How To Invest In Self-Storage – Summary

I hope you enjoyed today’s article on how to invest in self-storage.

If you are looking to add a new asset class to invest in, becoming a self-storage investor can be an interesting way to bring in a stable cash flow and make more money.

Self-storage is in high demand too, with many businesses currently having a long waitlist.

Factors such as location, demand, the quality of facilities (Class A, Class B, and Class C), and the type of storage lot all can change the success of a self-storage investment.

Are you interested in learning how to invest in self-storage?

*Statistics from Neighbor

Source: makingsenseofcents.com

Apache is functioning normally

The home-selling process can be challenging at times. This is especially true if home sellers are trying to move quickly or are hoping to avoid costly renovations. That’s why homeowners sometimes choose to sell and advertise their houses as is.

Selling a House As Is

Selling a house as-is means the homeowner will not make repairs or renovations before selling it to a buyer, even if the home has structural concerns or is in poor condition. If you’re considering selling a home as is, you can expect a couple of nice perks, yet there could be a few limitations you’ll want to be aware of.

The following article will break down the pros and cons of selling your house in its current condition and provide other helpful insights for an as-is home sale or purchase.

The Benefits of Selling a House As Is

First, let’s go over some reasons why you might opt to sell your house as is.

Sell fast

If you want to get more equity from your home without putting in a ton of effort, it’s possible to just sell it as is. Home-buying companies may be eager to take a home off your hands. Other cash buyers, like investors, may also be ready to buy your house quickly. Especially in a seller’s market, you will likely be able to sell successfully.

Save money on home improvements

When you sell your house more traditionally, you want to get the most money from your sale by fixing up your home. You may also be required to make repairs to meet certain state standards in order to sell your home. Buyers will have an inspection done and the cost of some repairs or updates, especially those regarding safety, often falls to the seller. Selling as is means you can usually avoid those possibly expensive repairs.

Attract home rehabbers and house flippers

A lot of buyers want to make renovations and changes based on their own preferences and may actually prefer paying a bit less for an as-is home.

Less hassle and negotiating

A home inspection that uncovers a lot of issues can cost a decent amount of money upfront. While the seller isn’t necessarily required to make all renovations or repairs, the buyer and seller must negotiate who will pay for what in a typical sale. If you don’t want to spend the time and money tackling those projects, it may be harder to sell your house at your previous purchase price. By selling the home as is, you won’t have to do as much negotiating with a buyer or agent, at least in terms of home upgrades and repairs.

The Cons of Selling an As-Is Home

Selling a home as is can be a great option for some people, but selling your home like this also has its challenges.

Make less money off the sale

Usually, you will make less money selling your home as is than listing it traditionally.

Since as-is homes often need repairs the owner wants to avoid paying for, these home listings are more likely to attract buyers looking for a deal. Unfortunately, even if your home is in excellent condition, people will expect you to sell an as-is home at a lower price.

Fewer buyers available

Marketing an as-is home can be more challenging, plus many lenders require the home to meet certain living conditions.

If a home needs a lot of work and the seller isn’t going to contribute to the cost of fixing it up, fewer buyers will be able to afford a mortgage for such a house. Not to mention, a less-than-ideal home may look worn, which can make buyers uninterested.

Buyers don’t want the hassle of hiring contractors

Buyers may not want to hire contractors to assess the home and estimate a fair purchase price.

Buyers may already be hesitant about taking on a project and feel the cost of hiring contractors isn’t worth it. That being said, sellers are still legally and ethically obligated to disclose major issues to buyers, which can lower the home’s value.

Alternatives to Selling a House As Is

If selling your house as is isn’t right for you, there are a few viable alternatives to consider:

  • Update and repair. Invest some money and time to fix and update your home. With a few repairs and renovations, you may be able to command a higher price than selling as is.
  • Rent your home out. If you don’t need to sell your home for a down payment on your next home, you may be able to rent it out. This may be an especially practical option if you live in a tourist area, college town, business district or other strong rental market location.

Tips for Selling a House As Is

If you’re ready to sell your house as is, here are some tips to help with the process.

Know the Type of Buyer You Want To Attract

There will be a big difference between your average buyer seeking a home to live in and an investor looking to flip your house. Investors specifically go after as-is homes and have the upfront cash needed to buy your home, so your house doesn’t need to meet too many conditions to be competitive.

Conversely, someone in the market for a home to live in will have much different expectations. While they won’t expect you to fix your home, they will expect to pay less for your home than it would typically go for. Keep in mind that even if a buyer is seeking an as-is home, they will still likely hesitate to make an offer on homes that have too many major issues.

Consider the Condition of Your Home

Like with a more traditional sale, your home will still have an appraisal and an inspection, affecting the purchase price.

If your home is in moderately good condition and still livable, your house could be an optimal option for more typical homebuyers. If your house will be a big reno project, you should target investors to get the most money off the sale.

Sell in the Right Market

A seller’s market — when there’s more home demand than supply — is the best time to sell your home as is. You can sell your home for a more competitive rate because, despite the extra cost, buyers may be more willing to fix up a home than not move into a new home at all. The market conditions will always affect how much you lose by selling a house as is.

Emphasize Other Property Selling Points

For most buyers, money is a significant factor in selecting a home — and a home with lots of repairs and renovations means lots of extra expenses. However, some as-is homes may have other desirable traits that make the purchase worthwhile. For example, location is of primary importance for a lot of people. If you have a home in a highly sought-after neighborhood, there’s a better chance that you’ll be able to sell your house as is.

The Bottom Line: How Much Money Can You Lose Selling a House As Is?

You usually won’t make the same kind of money selling your home as is as you would selling it the traditional way. While there’s no one answer to this question, most sellers can expect to get between 75% and 95% of their home value.

Tips If You Are Looking To Buy a House As Is

If you are considering buying an as-is home, here are some tips to keep in mind.

Plan for a Home Inspection

You should always get a home inspection if you’re seriously considering buying. This is especially essential for as-is homes.

Sellers shouldn’t hide issues with their homes, but they may not always be forthcoming or even be aware of certain problems. A home inspection lets you know what you’re working with so you don’t invest all of your time and resources into a never-ending money pit.

Know the Required Home Inspection Standards for Lenders

If you’re like most people, you don’t have hundreds of thousands of dollars in cash to splurge on a house, which means you’ll need a mortgage loan to purchase a home, even a fixer-upper. Make sure you can afford the necessary repairs to your prospective home; otherwise, the home may not qualify for a mortgage loan.

Rely on Experts

A good real estate agent will help you navigate and negotiate buying a home as is. Sellers have every right to sell their home exactly as it is, but they are also legally required to disclose details about their home, including the challenges. As a local expert, your agent should know the market conditions and can help you determine whether or not you should commit to an as-is home.

Also note that if a lender won’t loan you a certain amount of money for a home, that indicates the property isn’t suitable for living in and may not be worth your efforts and time unless fixed.

What Does Market Condition Mean?

Market conditions are the factors that influence the value of your home depending on the area. This includes the cost of living, mortgage rates, supply and demand, demographics and the overall economic status of the housing market.

For example, let’s say employment levels are high and a larger percentage of the population has steady employment and income. If this is the case, it’s also likelier that people are in the market to buy a home because they can afford it. This means the price of housing will usually go up. The opposite is generally true, too — if unemployment is high and people aren’t buying homes, the cost of homes will go down.

Depending on the market condition of your area, you may or may not be able to easily sell your home. If housing is competitive and favors the seller, then the market conditions will favor an as-is home sale. If the cost of homes is low, then buyers would benefit from purchasing a turn-key home if they can afford it rather than taking on an as-is home with projects.

What To Know About the “As-Is Condition” Clause

Sellers of as-is homes are responsible for revealing known problems with the property. An “As-Is Condition” clause is part of the real estate contract that protects the seller from liability should the buyer discover unknown or other defects with the home after purchasing it.

The as-is clause explains that the buyer is willing to accept the home in its current condition and agrees to forego requesting the seller to make repairs or a price reduction based on property problems. However, the as-is clause does not relieve a seller from liability should it be found that the seller intentionally misrepresented a defect or did not disclose a known problem.

Curious How Much Your Home Is Worth?

Visit the Pennymac home value estimator and see an instant estimate of your home’s current value and view recent home sales in your area.

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Source: pennymac.com

Apache is functioning normally

Going to college is a lot of work. Between studying for exams, cranking out term papers, and keeping up on homework, there is a lot to stay on top of. For student athletes, there is even more to juggle. Their chosen sport is basically a full-time job ― and a physically-demanding one at that.

The good news is that, according to recent research, college athletes tend to have higher graduation rates than their peers. However, to make it to your college graduation, you’ve got to keep your grades up and find the time to study, which can be especially challenging during your freshman year.

Read on to learn some simple and effective strategies that can help you balance your responsibilities in the classroom and on the court, field, or wherever you play.

Planning Your Class Schedule Accordingly

Often, coaches will outline clear timeframes for practice and training that student athletes need to plan their class schedules around. Additionally, games and competitions are usually scheduled far enough in advance for student athletes to know which days of the week they’ll be traveling most often.

Still, there may be some discretion in choosing class times. Keeping in mind when you prefer to eat, sleep, and study is key to creating a schedule that will help you perform as a student and athlete.

Although many student athletes maintain an active training schedule throughout the year, the official NCAA season (or the majority of it) for many sports occurs during either the fall or spring semester. You may want to take advantage of a more flexible off-season schedule by taking more academically demanding classes and those that would otherwise conflict with their practice schedule.
💡 Quick Tip: Pay down your student loans faster with SoFi reward points you earn along the way.

Keeping Your Eye on the Prize

Student athletes invest countless hours in their chosen sport. Yet, the vast majority will graduate and pursue a career outside athletics. On average, just 2% of college student athletes move up to professional leagues after NCAA competition.

Academics are an integral part of being a successful student athlete. Choosing a degree program you’re passionate about and that supports your career goals can help keep you motivated and on track to graduate.

Each team and college may maintain its own standards for GPA requirements to compete, but the NCAA sets minimum requirements too. Division I and Division II athletes are required to meet initial eligibility criteria set by the NCAA while Division III student-athletes are held to the standards set by the schools they attend.

Just skating by in terms of GPA may allow you to compete, but it could hurt your candidacy for internships and jobs after graduation.

Recommended: 12 Ways a College Athlete Can Make Money

Building Relationships With Your Professors and Classmates

This advice could apply to any college student, but student athletes in particular stand to benefit from getting to know their professors and classmates early on in the semester.

To varying degrees, college sports teams travel off-campus for games and competitions, which means student athletes might miss some in-person class time. Meeting with professors at the beginning of the semester can show a commitment to your studies and help hash out any scheduling conflicts for classes and exams.

Also, making friends with classmates can be beneficial for exchanging class notes to cover each other’s absences, as well as forming study groups.

Finding an Accountability Buddy

Student athletes know the importance of teamwork. In addition to pushing each other to greatness at practice and the gym, teammates can be a support system to help achieve your academic goals too. Forging a partnership or study group to hold each other accountable to these goals, on and off the court or field, is one such strategy.

For starters, who can better relate to your experience and challenges balancing athletics and academics than a teammate? Together, you and your accountability buddy can capitalize on downtime on the road to away games to tackle assignments or plan a study night before a big game to resist the urge to party.

It’s okay if your goals are different. The important thing is that you find an accountability buddy you feel comfortable with and who will help keep you on track.

Recommended: 5 Ways to Start Preparing For College

Prioritizing Health and Wellness

Both academics and sports can be demanding, and taking them on simultaneously requires serious stamina. Prioritizing physical and mental health by eating well, getting enough sleep, and finding ways to destress can help prevent burnout and stay sane. It’s okay to slip up every now and then, but creating a plan that you can stick to could make a difference in succeeding as a student athlete.

Recommended: What Is College Like?

It’s Okay to Ask for Help

Many college students deal with stress between exams and assignments. For college student athletes, the pressure to succeed athletically and academically can be a lot to handle.

There is no shame in asking for help, and the sooner the better. College tutors can assist with everything from proofreading essays to prepping for a chemistry test. Approaching professors early with any concerns could also help with extra credit opportunities or a chance to redo an assignment.

Recommended: The Ultimate Guide to Studying in College

What About Redshirting?

For Division I athletes, the NCAA regulation grants college student athletes a span of five years to compete in four years of athletic competition. For Division II and Division III students there is a 10-semester, or 15-quarter clock. This means that student athletes may take a year off from competing ― a practice known as redshirting ― as long as they continue taking coursework and meet other eligibility requirements.

Traditionally, redshirting is applied to allow students athletes more time to develop or recover from a significant injury. However, student athletes may be able to use redshirting to their advantage in terms of coursework.

Redshirting may allow students to take a more manageable course load by stretching their degree over ten semesters instead of eight. Alternatively, it can provide extra time to complete both a bachelor’s and graduate degree in one go.

Keep in mind that redshirting guidelines vary by division. For instance, Division I and II athletes are permitted to practice with their team during their redshirt season, whereas Division III athletes may not.
💡 Quick Tip: Even if you don’t think you qualify for financial aid, you should fill out the FAFSA form. Many schools require it for merit-based scholarships, too. You can submit it as early as Oct. 1.

Paying for College

College is a big investment, but fortunately there are options for funding education. Financial aid, grants, work-study programs, and scholarships may be enough to pay for all or a portion of tuition and room and board.

Athletic Scholarships

There are some full-ride and partial athletic scholarships available to Division I and II student athletes. Athletics classified as headcount sports offer full ride scholarships to a certain number of athletes per team, whereas equivalency sports traditionally extend partial scholarships. Head count sports include the following:

For Men:
•  Division I basketball
•  Division I-A football

For Women:
•  Division I basketball
•  Division I tennis
•  Division I volleyball
•  Division I gymnastics

For equivalency sports, it’s up to the college and coaching staff to decide how to divide scholarship funds between student athletes.

Recommended: Finding Free Money for College

Student Loans

In the event that scholarships, grants, and financial aid are not enough to cover tuition and living expenses, student athletes can take out student loans to help them cover the difference.

Federal student loans may be subsidized, which means interest won’t start to accrue until six months after you graduate, or they may be unsubsidized, which means interest begins accruing right away. Either way, you don’t have to start making payments until six months after graduation. Federal loans come with a fixed interest rate set by the government and don’t require a credit check.

If those do not cover your costs, you may also consider private student loans.

Private student loans are available through private lenders, including banks, credit unions, and online lenders. Rates and terms vary, depending on the lender. These loans do require a credit check and, generally, borrowers (or cosigners) who have strong credit qualify for the lowest rates.

Keep in mind, though, that private loans may not offer the borrower protections — like income-based repayment plans and deferment — that automatically come with federal student loans.

If you’ve exhausted all federal student aid options, no-fee private student loans from SoFi can help you pay for school. The online application process is easy, and you can see rates and terms in just minutes. Repayment plans are flexible, so you can find an option that works for your financial plan and budget.

Cover up to 100% of school-certified costs including tuition, books, supplies, room and board, and transportation with a private student loan from SoFi.


SoFi Loan Products
SoFi loans are originated by SoFi Bank, N.A., NMLS #696891 (Member FDIC). For additional product-specific legal and licensing information, see SoFi.com/legal. Equal Housing Lender.

SoFi Private Student Loans
Please borrow responsibly. SoFi Private Student Loans are not a substitute for federal loans, grants, and work-study programs. You should exhaust all your federal student aid options before you consider any private loans, including ours. Read our FAQs.
SoFi Private Student Loans are subject to program terms and restrictions, and applicants must meet SoFi’s eligibility and underwriting requirements. See SoFi.com/eligibility-criteria for more information. To view payment examples, click here. SoFi reserves the right to modify eligibility criteria at any time. This information is subject to change.

External Websites: The information and analysis provided through hyperlinks to third-party websites, while believed to be accurate, cannot be guaranteed by SoFi. Links are provided for informational purposes and should not be viewed as an endorsement.

Financial Tips & Strategies: The tips provided on this website are of a general nature and do not take into account your specific objectives, financial situation, and needs. You should always consider their appropriateness given your own circumstances.

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Source: sofi.com