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A home equity loan can allow you to access large sums of money without selling your home. Using your home as collateral, you can get a loan to finance anything you want — the choice is up to you.

There is a bit you should know before jumping all in. Any time a loan requires collateral, it’s always best to read the fine print. Keep reading to learn more about the details and see if a home equity loan is right for you.

Key Takeaways

  • A home equity loan allows homeowners to borrow against the equity in their home, using it as collateral.
  • Borrowers typically can access up to 80% of the home’s value, minus the existing mortgage balance.
  • Home equity loans have fixed interest rates and terms, while home equity lines of credit (HELOCs) offer flexible borrowing with variable rates.

What is a home equity loan?

Let’s start by explaining what home equity is. Home equity is the amount of your home’s value that you own beyond your mortgage.

In other words, it’s what you could sell your house for right now minus what you still owe on your mortgage. For example, if your current mortgage is $150,000, but the house appraises for $280,000, then you would have $130,000 in home equity.

How does a home equity loan work?

A home equity loan is a loan where you, the homeowner, use the equity in your home as collateral to borrow money.

But here’s the catch.

Just because you have $130,000 in home equity doesn’t mean that’s what is available to you from the bank. Lenders typically only approve home equity loans for up to 80% of the home’s value. So in this example, the lendable value of the home is $224,000. When you subtract your $150,000 mortgage balance, that leaves you with $74,000 available to you via a home equity loan.

Of course, there are other variables the lender considers as well.

Check Out Our Top Picks for 2024:

Best Home Equity Lenders

Requirements to Get a Home Equity Loan

Home equity loans used to be a sure thing. You could just walk into a bank and take out a home equity loan if you had equity in your home.

Then the 2008 housing crisis happened, and everything changed.

Now lenders are pickier and comb through every detail of each application. They have also started limiting the loan amount to only 80% of your home’s value, whereas 90% to 100% used to be commonplace.

Before approval, you’ll also obviously need to demonstrate and prove that you can repay the loan. If you argue that you have immediate plans to sell after renovation, prepare to be disappointed. Plans alone won’t suffice. A secure and constant revenue stream is definitely needed.

Most lenders require a debt-to-income ratio of 43% or less. So, the monthly payment for your home equity loan, along with your other monthly debt payments, can’t exceed 43% of your monthly pre-tax pay. Depending on your finances, this could limit just how much equity you’re able to tap into.

Home Equity Loans vs. Home Improvement Loans

Is a home equity loan the same thing as a home improvement loan?

No, they are very different. For example, you could use a home equity loan to finance needed repairs or home improvements. However, you could not use the funds from a home improvement loan as you would a personal loan.

A home improvement loan also doesn’t consider the equity you have in your home, nor does it require any collateral. Instead, you use it for anything that revolves around the “improvement” of your home — be it to install a swimming pool, remodel a kitchen, or repair a roof.

Lenders usually require you to provide a detailed plan of what you would use the money for. Additionally, the repayment periods are a lot shorter than home equity loans.

Home Equity Loans vs. Second Mortgages

Is a home equity loan the same as taking out a second mortgage?

Generally speaking, yes. People tend to confuse home equity loans with home equity lines of credit. A home equity line of credit (HELOC) is an adjustable-rate loan and can be a second mortgage, but it doesn’t have to be.

You can get a HELOC after you’ve paid off your mortgage, in which case the HELOC would be your first mortgage. However, rather than receiving a single payment as you would with a home equity loan, a HELOC lets you draw from an account as you need funds.

Home Equity Loan Benefits

There are quite a few pros and cons associated with home equity loans for borrowers and lenders.

From the buyer’s side:

For starters, home equity loans tend to be easier to get than other types of loans if you have bad credit. So if you’re getting turned down by multiple lenders, it’s a great alternative to traditional personal loans.

Secondly, most home equity loans have lower interest rates than unsecured loans, which will help you pay less over time. And you can use the funds to pay off credit card debt with higher interest.

Your credit score will directly affect the interest rate you get. The higher your credit score, the lower your interest rate will be.

Plus, there are some tax advantages. Not everybody qualifies, but all the interest you pay is tax-deductible if you do. That means you’ll pay less in taxes come April. Lastly, if you have a fair amount of equity in your home, you can borrow money against the equity.

For lenders:

Home equity loans are safe loans to make for a bank because they’re secured by the homeowner’s house. If the homeowner fails to make mortgage payments, the lender can seize the home to recoup the funds they’ve lost (which is how some of those blue foreclosure dots end up on Zillow).

Borrowers are always more likely to make a monthly payment on a loan if it’s secured by something valuable. Most of the time, they’ll choose to miss a credit card payment over a loan payment if they have to make a choice.

Home Equity Loan Drawbacks

The main con is the most obvious one: you could lose your home if you’re unable to make loan payments. Many times we’re put between a rock and a hard place.

It may not be the best loan for you if you have a real chance of not being able to pay both your mortgage and equity loan in the future. Unsecured installment loans may be a better option. However, the interest rate will be higher.

Another thing you should know is that the home equity loan market is rife with scammers. Some lenders will take advantage of any opportunity to rid you of your home at the first chance they get. So, if the company that’s caught your eye seems too good to be true, it most likely is.

How does a home equity loan work?

First, let’s talk about how you receive your money. There are a couple of different ways. You can either receive money as a lump sum or as a line of credit.

Lump Sum

Get all your cash at once and begin paying back the loan with monthly payments. Home equity loans usually come with a fixed interest rate. Each monthly mortgage payment you make will go towards interest and the principal.

Line of Credit

Once you are approved for a line of credit, you can choose only to borrow what you need when you need it. It has a credit limit, much like a credit card.

Referred to as a HELOC (home equity line of credit), if you go this route, you can borrow multiple times and only have to make smaller payments as you do. You can do this for several years until you’re expected to start making larger payments to pay off the loan.

Home equity lines of credit are considered by many to be the best option because of their flexibility. You’re only expected to pay interest on the loan amount you’ve used in the beginning. However, with a variable interest rate, some monthly payments may be higher or lower than others.

Another downside to a HELOC is that if banks need to, they can cancel the HELOC before you’ve even gotten a chance to use it. If it happens to you, pay off whatever you need to pay off and go somewhere else. There are lenders everywhere.

It’s always wise to shop around before settling with a lender. Interest rates can often vary significantly, and some lenders are more reputable than others. Moreover, many lenders require you to pay closing costs when taking out a home equity loan, but many won’t.

Do your homework and calculate which one will save you the most money over time. For example, a company may charge you closing costs, but if their mortgage rates are a lot lower than everyone else’s, they may be the best choice.

How long do you have to repay a home equity loan?

Home equity loans typically have terms ranging from five to 20 years, but some can last up to 30 years. With a fixed interest rate home equity loan, you’ll have fixed monthly payments until the loan is paid off.

If you take out a home equity line of credit, you’ll only have to pay the interest each month on what you’ve drawn. The draw period can last only a few years or up to ten years (depending on the lender). Once the draw period is over, your payments become regular payments, so each month’s payments will go towards both the interest and principal.

It is possible to pay off either type of loan early, but, once again, depending on the lender, there may be fees involved.

Can you sell your home if you get a home equity loan?

Yes, you can. It’s considered a lien on your house, so it’s settled at closing. Your loan is added to whatever you still owe on your mortgage. The sum of both is subtracted from whatever you sold your house for, with the remaining profits going to you (and, of course, Realtor fees).

Problems arise if the housing market collapses after you’ve taken out a home equity loan and the value of your home tanks. If you sell your house in this situation, what you make on your house will unlikely pay for what you still owe.

Banks don’t like giving out loans to buyers for houses with liens because they represent a greater risk for them. So if you intend to sell your home soon, make sure you can pay off the loan either through the sales proceeds or other means like cash savings.

How does a home equity loan affect my credit?

As with any loan, it can help or hurt your credit scores in various ways. You shouldn’t expect much improvement in your credit scores unless you take out a large loan and make on-time payments for years and years.

Pros

  • Make your monthly payments on time, and your Payment History category will get a boost.
  • If you get a HELOC, you’ll get a bump in the Debts Owed category because you’ll have more credit available to you.
  • No matter whether you choose a lump sum or line of credit, you should see a bump in Types of Credit.
  • Depending on how long it takes you to pay back the loan, if it’s for more than a few years, you’ll see a bump in Length of Credit History.

Cons

  • Your credit score will be lowered if you don’t make your payments on time.
  • If you take out a large amount, your Balances Owed category could cause your credit score to go down a few points.
  • Because it’s simply a new credit line, your credit score will also lower due to the New Credit category.

Bottom Line

A home equity loan can be a valuable financial tool if you need access to significant funds and have substantial equity in your home. It offers advantages like lower interest rates compared to unsecured loans and potential tax benefits.

Be aware of the risks, such as the possibility of losing your home if you’re unable to make payments. Ensure you meet the lender’s requirements, shop around for the best rates, and understand the terms before proceeding. By doing so, you can make an informed decision and potentially benefit from the financial flexibility a home equity loan provides.

Source: crediful.com

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Living frugally doesn’t mean giving up the things you love. It’s about making smart choices and finding ways to save money without sacrificing comfort.

In this post, you’ll find the top frugal living tips for around the house. These practical ideas will help you cut costs on everyday expenses, reduce waste, and make your home more efficient. Whether you’re looking to save on your utility bills, groceries, or household items, these tips will help you stretch your budget and make the most of what you have.

Adjust the temperature

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Turn down the heat or air conditioning at night to save on energy bills. It’s good for your wallet and your health.

Cut back cell phone plan

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Save money by reducing your cell phone plan’s data plan. Make sure it still meets your needs. This is especially true for preteen or teen cell phone plans.

Make clothes last longer

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Wash clothes less often and use gentle detergents to keep them looking new. This helps you spend less on clothes.

Shop for clothing on clearance

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Buy clothes on clearance to save money. I have found that shopping off-season can get you great deals. Plus only buy what you truly need.

Learn More: How to Shop for Clothes on a Budget

Eliminate cable or satellite TV

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Save money by streaming shows online instead of paying for cable or satellite TV. You may opt for monthly billing to binge watch shows.

Switch cell phones

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Consider switching to a cheaper cell phone provider. There are so many new providers to the market. Just check if they offer good service in your area.

Look into your energy usage

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Adjust your thermostat a few degrees to save money on energy. Invest in a comfy sweatshirt to stay warm.

Limit trips to the salon

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Save money by cutting your own hair or letting your natural color grow out. This was one of the ways we paid off debt faster!

Turn off unused lights

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Turn off lights when you leave a room to save on your electricity bill. This is a simple adage, but it still holds true.

Buy in bulk

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Save money by buying items like toilet paper and toothpaste in bulk. Be wise with what you buy that will you actually use the extra items.

Save money on laundry

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Wash clothes at night and hang them up to dry. This saves money and keeps clothes in good shape. For U.K. folks, this is a normal practice.

Check out the Must Haves for a Frugal Home

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Incorporating these frugal living tips into your home can significantly reduce your overall costs. By embracing a minimalist approach, being mindful of your spending, and making smart choices, you can create a comfortable and budget-friendly living space that aligns with your financial goals. Remember, small changes can lead to big savings over time, so start implementing these frugal home essentials today for a brighter and more financially secure future.

To learn more: 25 Frugal Home Must Haves To Save Money for Clean and Organized Home

Know someone else that needs this, too? Then, please share!!

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More importantly, did I answer the questions you have about this topic? Let me know in the comments if I can help in some other way!

Your comments are not just welcomed; they’re an integral part of our community. Let’s continue the conversation and explore how these ideas align with your journey towards Money Bliss.

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When something goes wrong with your car out on the road, most people have two options: Call an emergency towing service, or contact your roadside assistance program. Those two choices may sound like the same thing, but there are important differences.

Read on for a breakdown of what you can expect from each of these services, including pros and cons, and average costs.

Recommended: Does Auto Insurance Roadside Assistance Cover Keys Locked in a Car

What Is Roadside Assistance?

Roadside assistance comes to your aid when your car breaks down or some other mishap keeps you from using your car. If you find yourself stranded, roadside assistance will send help (think a mechanic, locksmith, tow truck) to get your car back on the road, to a repair shop, or back home.

Roadside assistance packages vary from one provider to the next, but most include the following:

•   Flat tire change

•   Battery jump-starts

•   Fuel delivery

•   Lockout assistance

•   Winching/extrication

•   Quick-fix services

Any benefits you receive on top of these basics are determined by the roadside assistance plan you have. For example, some plans include trip interruption coverage or a guaranteed arrest bond if you’re charged with a traffic violation. Plans may also offer savings on car maintenance costs, car rentals, hotels, and other perks. Extra benefits may come at an extra cost, however, so it’s important to compare plans carefully.

There are a few different ways you can get a roadside assistance plan:

•   Many insurance companies offer some type of roadside assistance coverage, usually as an add-on to your auto insurance policy. If you’re concerned about cost, there are other ways to lower car insurance premiums.

•   Another option is to pay for an auto club membership that’s separate from your auto insurance.

•   Your car manufacturer may include a roadside assistance package as part of your warranty or as a limited free trial for a service you can later purchase.

•   Some credit card companies offer access to roadside assistance as a perk to cardholders.

Recommended: Why Personal Insurance Planning Is Important

What Can You Expect When Calling Roadside Assistance?

One of the benefits of participating in a roadside assistance program is that you’ll know exactly who to contact if you need help with your car. You can program the customer assistance number into your phone or download the program’s app, or you can tuck your membership card into your wallet or glove compartment.

Here’s what to expect when you call roadside assistance:

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Calling for Help

First things first: If your child is locked in the car or you’re in a situation where you feel unsafe, you may want to make your first call to 911. The 911 dispatcher will determine whether to send an officer to help.

If you feel safe, you can go straight to calling roadside assistance. You may be asked to verify that you have an account or that the car is yours. It can help to be ready with your license and registration, proof of insurance, and your roadside assistance plan’s membership card.

Your roadside assistance dispatcher will send the appropriate help from a network of service providers to your location. A technician may try to fix your car on site. But if that isn’t possible, you can have your vehicle towed to a repair shop or your home, if that’s your choice and it’s within your plan’s mileage limit.

Getting Home

If your car needs to be towed to a repair shop, you probably will be able to ride with the tow truck driver. Once you’re finished there, it’s up to the tow truck driver (or company policy) if you can get a ride home. During busy times, you may be responsible for getting home on your own.

If you’re out of town when your car breaks down, roadside assistance coverage will sometimes pay for an overnight stay in a hotel. (If you travel a lot, you may want to see if this benefit is available when you’re comparing plans.)

Wait Times

Many roadside assistance programs work with a network of providers, so when you call, there may be someone nearby who can get to you quickly and offer the services you need. Generally, you can expect help to arrive in less than an hour.

Several factors can impact your wait time, however. If there’s heavy rain, wind, or a snowstorm, for example, you may have a longer wait. It can also take a while to get help if you’re in a rural location that’s far from a locksmith, mechanic, or towing service — or if you’re in a busy city at rush hour.

Some plans provide updates through texts or an app so callers can track their current wait time.

Payment

How the service provider who comes to your aid is paid depends on the plan you’re enrolled in. With some programs, if you use the toll-free number or an app, and the dispatcher sends a technician to help, you may not have to pay anything upfront for covered services. But if you contact a tow service, mechanic, or locksmith directly, you will likely pay out of pocket, then submit receipts to your plan for reimbursement.

Some plans don’t have a central dispatcher. In that case, you’d call a provider directly, pay for the services, and then file a reimbursement claim. No matter how your plan handles payments, it’s a good idea to keep a credit card on you when driving.

There is no deductible for roadside assistance. Most programs have very specific limits on what they will cover. For example, if a service technician delivers fuel to your car because you’ve run out of gas, the delivery may be free, but you may have to pay for the gas.

Recommended: How to Get Car Insurance

What Is the Average Cost of Roadside Assistance?

The price of a roadside assistance plan varies based on several factors, including:

•   how many vehicles or drivers you want to cover

•   where you live

•   whether coverage is through your auto insurance or another source

•   the level of coverage you choose

Some plans charge less for annual coverage and more for services received or vice-versa. It can be useful to compare online insurance benefits and quotes to get a sense of what’s available and at what cost.

Generally, you’ll pay less for a plan that’s an add-on to your auto policy versus a stand-alone membership. Allstate, for example, offers a roadside assistance insurance add-on for as little as $25 per year for one vehicle. Without an Allstate policy, the cost of a roadside assistance membership starts at $73 for the first year.

If your insurer doesn’t offer 24-hour roadside assistance, or you don’t like your insurer’s plan, you may want to check out what other insurance companies are offering.

Recommended: How Much Does Insurance Go Up After an Accident?

Pros and Cons of Roadside Assistance

One of the biggest pros of roadside assistance coverage is that you know you’ll have someone to contact any time you’re in need. You can call for advice or hands-on assistance, and someone will be there to help.

As noted above, some plans will post a bond if you’re charged with a traffic violation or reimburse you (within limits) if you need to stay in a hotel overnight. Plans may also include benefits that go beyond roadside breakdowns, such as discounts on travel and entertainment.

If you have to call roadside assistance even once, you may save enough on the services rendered to cover your cost for the year.

Still, no one likes the idea of paying for something they may never use. If you have a newish car that’s well-maintained or you seldom drive far from home, you may decide roadside assistance isn’t for you.

Coverage limits can also be disappointing. Enrolling in a roadside assistance plan doesn’t mean you’ve got a blank check that will cover any cost you incur. You may have to pay something for a tow if you go beyond the mileage limit, for example, or you may have to pay for a new battery or tire if yours needs replacing. There also may be an annual limit on the number of calls for service you can make.

Also, not all costs are covered upfront. Your plan may require you to submit receipts for reimbursement in some or all instances. If you’re averse to paperwork, that may be something to consider.

What Is an Emergency Towing Service?

The main purpose of emergency towing services is to move a vehicle when the driver can’t get back on the road without help. There are several circumstances that might require calling for an emergency tow, including:

•   When you’re in an accident, and either your car can’t be driven or you’re in no shape to drive

•   If your car isn’t running, and it’s blocking traffic or putting you and other drivers in danger

•   If you’re pulled over by law enforcement, and the officer determines you can’t drive

There are a couple of circumstances in which your car insurance may pay for a tow, even if you don’t have roadside assistance coverage:

•   After an accident and you have collision coverage

•   If your car is damaged in a flood, fire, etc. and you have comprehensive coverage

But in most cases, if you don’t have roadside assistance or “towing and labor” coverage through your auto insurance policy, an auto club membership, or a car warranty, you may be on your own when it comes to paying for your vehicle to be towed away.

What Can You Expect When Calling an Emergency Towing Service?

If your car breaks down close to home, you may be able to directly call a reliable repair shop or towing service you’ve worked with in the past. Having that connection can be a benefit if you want to choose the company that will come to your aid quickly.

But if you’re far from home and unfamiliar with the service providers available, you may have to cross your fingers and hope for the best when you call for a tow.

Here’s what you can expect when you call for emergency towing without a roadside assistance plan:

Calling for Help

If your regular mechanic or garage has the right equipment for your needs (a tow truck, a flatbed truck, a winch, etc.), you may be good to go. They can come pick up your car and get you the help you need.

But if you can’t call your favorite repair shop — because you’re out of town or it’s after hours — you may have to make a few calls before you find the appropriate help.

Some companies don’t require a subscription to use their towing and roadside assistance network, so you can try contacting them for help. But if their network doesn’t include services where you are, you may have to try your luck dialing local tow truck companies.

When a tow truck comes to your location, the driver may be able to offer on-site assistance with a flat tire, dead battery, or other problem. But you can’t necessarily count on getting the same help you’d get with a roadside assistance plan. The driver may be equipped only to tow your car back to your house or to a repair shop. And you can expect to pay in full for every service you receive if you don’t have roadside assistance coverage.

No matter who you call, it’s important to be clear about what you need. And of course, if you’re in an accident or feel as though you’re in danger, you should call 911 first.

Getting Home

You may be able to get a ride home from the tow truck driver after they take your car to the garage. But just as with a roadside assistance plan, it will likely be up to the individual driver’s discretion or company rules. If you aren’t sure if there will be a cost for the ride, you may want to ask before you get in the truck. And if you’re far from home, you also may want to ask for hotel recommendations.

Wait Times

Response times for tow trucks generally are determined by availability. If you call a tow company directly and there’s a truck close to your location, you may be able to get faster service than you would calling a roadside assistance plan because you’re eliminating the middleman.

But the same things that can hold up a truck coming through a roadside assistance dispatcher can slow down a company you call directly, including inclement weather, rush hour traffic, and distance.

Payment

If you call a tow truck directly, you can expect to pay the bill out of pocket. Depending on why you’re calling and the type of insurance coverage you have, you might be reimbursed for some costs. But if you’re calling about an overheated engine, dead battery, or flat tire, and you don’t have roadside assistance coverage, your insurance company typically won’t reimburse you for your costs.

What Is the Average Cost of Emergency Towing Services?

According to J.D. Power, towing rates in the U.S. can range between $2.50 and $7 per mile, and the average cost of a tow is about $109. But besides distance, several factors can affect the overall cost of a tow.

It may cost less to have your car towed after a breakdown than if you’ve been in an accident. And if the tow company needs to use special equipment — because your car is stuck in mud, snow, or a deep ditch, for example — that can also increase the price.

Many tow companies also include a base charge or “hook-up” fee that can range from $35 to $100. Some tow companies have a list of basic charges on their website, but if you can’t find pricing, you may want to ask so there aren’t any surprises.

Pros and Cons of Emergency Towing Services

One of the biggest upsides to using emergency towing service may be that you’re eliminating the middleman. You don’t have to wait for the dispatcher to find a network-approved provider to come and get you; you can call any company you like.

Of course, this can also be a drawback if you’re far from your favorite mechanic or repair shop. You may have to make multiple calls to find a tow truck that can come to your rescue.

Another plus to consider is that you won’t have to worry about paying for roadside assistance coverage every year whether you use it or not. You’ll only pay for services you actually use.

But if you do end up calling a tow truck even once and you don’t have coverage, it can mean a whack to the wallet. You can end up paying more for that one tow than you would for a year of roadside assistance coverage — and you won’t be getting the perks.

How To Decide Between Roadside Assistance and Emergency Towing Services

Because there are pros and cons to both roadside assistance coverage and emergency towing services, here are some things you may want to look at when you’re trying to decide between the two:

Your Comfort Level

Are you someone who likes having a plan when things go wrong, or are you OK with winging it? If you like the security of knowing you’ll have just one call to make if you need help on the road, you may prefer roadside assistance coverage.

Your Car

If your car is new or it’s well-maintained and the chances of a breakdown are slim, you may decide you don’t need to pay for roadside assistance coverage.

The cost of some roadside fixes may be covered if your car is still under warranty. And if you have collision or comprehensive coverage through your auto insurance policy, towing costs may be paid in some circumstances.

Your Family’s Needs

Maybe your car is an older model that isn’t exactly reliable. Or maybe you have some first-time drivers in the family, and you want to feel confident they’ll know who to call (besides you) if they run into trouble on the road. You might want to look into what it would take to get new drivers roadside assistance coverage for the whole family.

Value

You may want to list side-by-side the costs of having a roadside assistance plan versus what you might end up paying for a tow or other services out of pocket. Can you afford a plan that fits your needs and budget? Can you afford to not have coverage? (Keep in mind that if you use your plan just once, it may pay for itself for the year.)

Recommended: Auto Insurance Terms, Explained

The Takeaway

When the unexpected happens on the road, you can wing it and call for a tow truck. Or you can contact roadside assistance and feel confident that someone will come help you out ASAP. What’s more, some or all of the cost of getting your car back on the road could be covered under your plan.

Many drivers consider roadside assistance a good deal for the money: The cost of just one tow is often more than the annual cost of roadside assistance. If you travel a lot, or have young children or new drivers in the family, roadside assistance may be what you need.

When you’re ready to shop for auto insurance, SoFi can help. Our online auto insurance comparison tool lets you see quotes from a network of top insurance providers within minutes, saving you time and hassle.

SoFi brings you real rates, with no bait and switch.

FAQ

What is emergency roadside assistance good for?

Roadside assistance coverage can help you deal with and pay for a range of unexpected costs you might run into while on the road — from fixing a flat tire on site to towing you to a repair shop for major repairs.

Is emergency roadside assistance worth it?

No one likes paying for something they may never use. But if your car breaks down just once, the convenience and savings you get through your roadside assistance plan may make it worth paying the annual cost.

What is the difference between emergency towing and roadside assistance?

Roadside assistance coverage is meant to help you get the service you need when you have car trouble — on the road or at a repair shop. Depending on the problem, roadside assistance may cover all or a portion of the costs. On the other hand, emergency towing is meant to get your car off the road and to a repair shop where it can be fixed. Generally, you can expect to pay for all the costs related to this service.

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Third-Party Brand Mentions: No brands, products, or companies mentioned are affiliated with SoFi, nor do they endorse or sponsor this article. Third-party trademarks referenced herein are property of their respective owners.

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

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Source: sofi.com

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Maine, known for its stunning natural beauty and picturesque coastal towns, provide endless opportunities for outdoor adventure and New England charm. The state is dotted with iconic lighthouses, delicious seafood, especially lobster, and a rich maritime history. Whether you’re browsing homes for sale in Portland, considering renting in Bangor, or exploring houses for rent in Bar Harbor, here’s what you need to know before moving to Maine.

Maine at a glance

Living in Maine provides a mix of coastal charm, stunning natural landscapes, and a laid-back lifestyle. Portland, the state’s largest city, is known for its arts scene, historic architecture, and renowned food culture, particularly its seafood. Other notable cities include Augusta, the state capital, which has a rich history and small-town feel. Maine’s picturesque small towns, like Bar Harbor and Camden, add to the state’s appeal with their scenic beauty and welcoming communities. The state’s affordable cost of living, especially in rural areas, makes it an attractive option for those seeking a quieter, more relaxed lifestyle.

Maine’s job market is diverse, with significant industries including healthcare, education, tourism, and marine-related activities. Major employers in the state include MaineHealth, L.L.Bean, and the University of Maine System. The state’s cultural scene is rich, featuring numerous festivals, art galleries, and theaters that celebrate Maine’s heritage and creativity. With its strong sense of community, thriving job market, and abundant recreational opportunities, Maine offers a unique and inviting environment for those looking to move to the Pine Tree State.

1. Maine is a seafood lover’s paradise

Maine’s reputation as a seafood paradise is built on its abundance of fresh, high-quality seafood, particularly from its cold, nutrient-rich waters. The state is renowned for its lobster, with catchings daily, ensuring restaurants and markets have the freshest product available. In addition to lobster, Maine is famous for its clams, mussels, and oysters, which are featured in a variety of local dishes. 

Insider scoop: For a true Maine seafood experience, visit coastal towns like Portland, where you can enjoy seafood from iconic spots such as Eventide Oyster Co. and The Lobster Shack in Cape Elizabeth.

2. The cost of living varies throughout the state

Maine’s cost of living varies significantly by region, with coastal areas like Portland and Bar Harbor commanding higher housing prices due to their desirable locations. In Portland, the median home sale price is 650,000, with a rental rate of $2,622 for a one-bedroom apartment. Conversely, inland cities such as Lewiston offer more affordable housing, with a median home sale price of $312,000, and average rental rates of $1,325. Despite moderate costs for groceries, healthcare, and utilities, those moving to Maine should carefully consider their desired location, as housing costs can greatly influence their overall budget.

If you’re considering a move to Maine, it’s essential to weigh the pros and cons of life in the Pine Tree State to fully understand what to expect.

3. Tourism is a significant part of Maine’s economy

Tourism plays a crucial role in Maine’s economy, with millions of visitors flocking to the state each year to experience its natural beauty. Popular destinations like Acadia National Park, with its breathtaking views and hiking trails, attract many looking for an escape. The charming coastal towns of Kennebunkport and Ogunquit draw tourists seeking quaint shops, scenic views, and beach access. Additionally, the state’s festivals, such as the Maine Lobster Festival and the Old Port Festival in Portland, contribute significantly to local economies by boosting seasonal tourism and supporting small businesses.

Travel tip: For a more immersive experience, purchase tickets to the Maine Lobster Festival in advance and check for local lodging options early, as accommodations in popular areas like Bar Harbor fill up quickly during peak tourist season.

4. The winters are very cold

Maine winters are known for their severity, with temperatures often plunging well below freezing and heavy snowfall common from November through March. The state averages over 60 inches of snow annually, with some areas, especially inland and northern regions, receiving even more. This can lead to challenges such as snow removal, icy roads, and extended heating needs. Residents must be prepared for winter driving conditions and the possibility of power outages. For instance, in places like Rangeley, snowshoeing and ice fishing are popular winter activities, but they require a preparedness for intense cold and snow accumulation.

5. Maine is known for its iconic coastline

Maine’s coastline stretches over 3,000 miles and features some of the most iconic and picturesque coastal landscapes in the United States. From the rugged cliffs and rocky shores of Acadia National Park to the charming lighthouses like Portland Head Light, the coastline offers stunning views and rich maritime history. The coastal region is dotted with quaint fishing villages and scenic harbors that reflect the state’s maritime heritage. Towns like Camden provide beautiful waterfronts where visitors can enjoy boat tours, kayaking, and seaside dining with unparalleled views.

6. Lobster rolls are the state’s staple

Lobster rolls are a quintessential Maine delicacy and a point of pride for locals. These sandwiches feature freshly picked lobster meat, often mixed with a light dressing of mayonnaise, and served in a buttered, toasted bun. The preparation varies from place to place; some establishments use a simple recipe to highlight the lobster’s natural sweetness, while others add ingredients like celery or scallions for extra flavor.

Insider scoop: For an authentic taste, head to Red’s Eats in Wiscasset, renowned for its generous portions and perfect balance of lobster meat to dressing.

7. You’ll never get tired of outdoor adventure here

With its diverse landscapes ranging from mountains and forests to lakes and coastal areas, there’s plenty of beautiful nature to explore. Acadia National Park provides some of the best hiking, biking, and scenic drives in the state, with trails like the Precipice Trail offering challenging climbs and stunning vistas. The state is also home to pristine lakes such as Rangeley and Moosehead, ideal for fishing, kayaking, and camping. In winter, areas like Sugarloaf and Sunday River offer excellent skiing and snowboarding opportunities, while the numerous snowmobile trails cater to winter sports enthusiasts.

Travel tip: To avoid peak-season crowds and secure accommodations, plan your visit to popular spots like Acadia National Park or Sugarloaf during the shoulder seasons—late spring or early fall for hiking and summer activities.

8. Antiquing is a big deal here

Antiquing is a popular pastime in Maine, with the state offering a wealth of antique shops, markets, and fairs that cater to collectors and history buffs. Maine’s historic towns are filled with charming antique stores where you can find everything from period furniture to vintage jewelry. Notable spots include the Maine Antique Digest in Newcastle and the shops in the historic district of Portland, where you can browse for unique items. The annual Maine Antique Dealers Association Show showcases some of the best antiques and collectibles, drawing enthusiasts from across the region to explore the state’s rich history through its treasures.

Insider scoop: For a true antiquing adventure, follow the Maine Antique Trail, a curated route featuring top antique shops and hidden gems throughout the state. 

Methodology

Population data sourced from the United States Census Bureau, while median home sale prices, average monthly rent, and data on affordable and largest cities are sourced from Redfin.

Source: rent.com

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Chase has partnered with DoorDash to offer DashPass and monthly credits to Sapphire Reserve, Sapphire Preferred, Sapphire, Freedom, Freedom Flex, Freedom Unlimited, and Slate cardholders.

Chase Press Release | DoorDash Press Release

There are four potential benefits now available, variously on these cards (as we’ll describe more below):

  1. Free DashPass membership through December 31, 2027. (Those who activate the benefit in 2027 will still get a full 12 months of the benefit.)
  2. Two promo discounts of $10 each calendar month will reflect at checkout. This promo will not work on restaurant orders; it only works on grocery, convenience, or other non-restaurant orders on DoorDash. (To activate the promo discount benefit, you need to first activate the free DashPass benefit.)
  3. A $5 monthly DoorDash credit which works for all DoorDash purchases. This ends on January 31, 2025.
  4. Beginning February 1, 2025, a new monthly benefit for a $5 discount on restaurant orders on DoorDash.


Now here’s the breakdown of the benefits by card:

  • Sapphire Reserve cardholders get all four of the above-mentioned benefits. You’ll get DashPass through 2027. And through January 2025, you’ll get one $5 monthly credit which works everywhere and two $10 promo discounts each calendar month which work on non-restaurant orders. Starting February 2025, you’ll get one monthly $5 discount on restaurant orders and two $10 monthly discounts on non-restaurant orders.
  • Sapphire & Sapphire Preferred cardholders get DashPass and the non-restaurant credit. You’ll get DashPass through 2027. And you’ll get one $10 promo discount each calendar month which works on non-restaurant orders.
  • Freedom & Slate cardholders get a DashPass benefit and a quarterly discount benefit. Starting Febaruary 1, 2025, you’ll be able to enroll for six free months of DashPass. (Those who have not yet used the current/previous version of the DashPass benefit on Freedom and Slate cards have until January 31, 2025, to enroll in the current benefit – three months of free membership followed by nine months of discounted DashPass.) And you’ll get one $10 promo discount each quarter which works on non-restaurant orders. (To activate the promo discount benefit, you need to first activate the free DashPass benefit.)

Our Verdict

For some time now, DoorDash and Chase partnered to offer DashPass and $5 monthly credits on the Sapphire cards. They’ve now expanded this to add the $10 (2x) credits each month and to offer benefits on Freedom and Slate cards as well. This is obviously Chase’s move to counter-balance the loss of the Instcart benefits offered on Sapphire, Freedom, and Slate cards which expired yesterday (7/31/24).

This is all a bit confusing since some of these benefits have already existed and some are new. I tried making everything as clear as possible, hopefully we got all the details correctly.

Some stores will have a Pickup option on the order and then you’ll be able to get $10 completely free without the added delivery fees. For someone who values this benefit, the $95 annual fee on Sapphire Preferred can now be offset with the $10 monthly credits.


Source: doctorofcredit.com

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Buying things takes less time these days — you can have your week’s groceries, a new outfit and a used car headed to your front door in a matter of hours, thanks to technology. But this convenience comes with a price.

New data from the Bureau of Labor Statistics reveals fewer people are shopping on any given day than they were 20 years ago, and those who do are spending less time on the task. However, we’re spending more money, likely because we no longer have to even open our wallets, let alone leave the house, to buy all of the things we need or desire.

While our efforts have eased, online shopping has helped drive a dramatic increase in retail spending over the past few decades. Whether it’s your groceries or wardrobe, you’ve likely succumbed to more impulse buys because it’s just so darned easy.

We’re spending less time shopping

From 2003 to 2023, the share of people shopping on any given day fell from about 46% to just under 40%, according to the American Time Use Survey, an annual release from the Bureau of Labor Statistics that examines how we spend our hours.

Further, when we do shop, we’re being a little quicker about it. The amount of time spent by those shopping on a given day fell by about six minutes during the 20-year period.

One way of looking at this, in terms of efficiency, is that we’re getting better at shopping — we can do what we need to in less time, on a fewer number of days. However, efficiency implies we’re getting greater returns on our efforts. In this case, it may only be a little time back, because we’re actually buying more.

Our efficiency is costing us; online shopping likely to blame

Retail sales data, a measure that gets close to the definition of shopping (though it doesn’t include shopping for services, which the time use survey does) indicates a 37% increase — from $437 billion per month in the first quarter of 2003 to $597 billion 20 years later, after adjusting for inflation. And one category within this data has seen far more dramatic growth.

Over the past two decades, we’ve seen online shopping go from novelty to commonplace. Spending on “electronic shopping and mail order houses” — the quaint-sounding U.S. Census Bureau category that applies to your late-night, couch-side shopping sprees — has grown from about $17 billion to $99 billion since 2003, after adjusting for inflation. That’s an increase of about 470%. And the inflation adjustment means we’re not just spending more, we’re buying more “stuff.” Turns out, when you don’t have to leave the house or even get dressed to go find a new hat, or three, you’re more likely to buy them.

Slowing down the shopping process

Personally, as I prepare to take a vacation, I know for a fact I’m purchasing more items for my trip simply because it’s convenient. I’m ordering two scarves to compare and keep the one I want; blister balm and a few kinds of bandages for the inevitable foot pain I’ll encounter walking around; travel-size everything to ensure I don’t have to check a bag; and a few new outfits to break in while abroad. Twenty years ago, this would have likely required multiple trips to multiple stores, and I wouldn’t have made all of these purchases. But I do now because I can. And it’s this frictionless shopping experience that makes it easy to overspend.

It’s one thing to shop within your means for the things you need, and another to be hit with pangs of guilt when the packages pile up outside your door. If you find you’re buying more stuff than you’d like, introducing speed bumps to the otherwise seamless process could help:

Shop with intent. Browsing with no purpose in mind can lead to purchases of things you don’t really need. Before you navigate to your favorite retailer just to “see what’s new,” ask yourself what you’re really looking for. If there’s no pressing need for new pants or yet another basic white tee, maybe you wait until there is a definitive need or reason to shop before placing yourself in the center of your favorite virtual stores.

Set shopping times, and avoid impulse buys. Limit the days or times of day when you allow yourself to shop. While it’s not the same as having to leave the house, find parking and contend with crowds, limiting yourself to certain shopping periods can help focus your objectives. Not to mention, it builds in a waiting period when impulses hit.

Instate a holding period, when possible. Filled your cart? Great, now walk away. Take a timeout between the selection and buying processes. This pause can help you gain perspective on potential purchases, and you may delete a few things before checking out. Some retailers are onto this tactic, however, and give you a limited amount of time before they empty your cart for you. Don’t let their timer rush a buying decision you aren’t absolutely certain about.

Review your purchases on a regular basis. Once a week or once a month, sit down and look at your shopping from the prior period. What did you buy? What did you end up returning? What should you have returned but didn’t? Reflecting on your most recent purchases can help you spot patterns or spending categories that you may be able to work on.

Source: nerdwallet.com

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Indiana, known for its friendly communities and iconic Hoosier hospitality, is a state where you’ll find a mix of bustling urban centers like Indianapolis and serene rural landscapes. The state is rich in sports culture, home to the Indianapolis 500 and passionate basketball fans, and offers a diverse range of recreational activities. Whether you’re browsing homes for sale in Carmel, considering renting in Bloomington, or exploring houses for rent in Fort Wayne, here’s what you need to know before moving to Indiana.

Indiana at a glance

Living in Indiana blends vibrant city life and peaceful rural landscapes, making it an appealing destination for diverse lifestyles. Indianapolis, the state capital, is a bustling metropolis known for its sports culture, including the legendary Indianapolis 500 and the Indiana Pacers. Other major cities like Fort Wayne and Evansville provide a mix of economic opportunities, cultural experiences, and educational institutions. The state’s affordable cost of living, particularly in smaller cities and towns, makes it an attractive option for those looking to settle down without breaking the bank.

Indiana’s job market is robust, with key industries including manufacturing, healthcare, education, and agriculture. Major employers headquartered in the state include Eli Lilly and Company, Cummins Inc., Anthem Inc., and Cook Group. The cultural scene is equally diverse, with numerous festivals, museums, and theaters enriching the community life. Residents can enjoy the state’s numerous parks, lakes, and trails, such as Turkey Run State Park and the Indiana Dunes National Park. With its friendly residents, strong job market, and a wide array of recreational activities, Indiana offers a welcoming environment for newcomers.

1. The Hoosier hospitality will make you feel right at home

Hoosier hospitality is a hallmark of life in Indiana, characterized by the warm and friendly demeanor of its residents. Whether you’re moving into a new neighborhood or just visiting, you can expect a welcoming atmosphere with people eager to help and make you feel at home. Local communities often come together for neighborhood events, fairs, and potlucks, reflecting the state’s strong sense of community. For instance, small-town events like the Lafayette Jefferson High School Football games or local farmers’ markets often have a friendly, inclusive feel, making newcomers feel like part of the community from day one.

2. The sports culture is a big deal

Indiana’s sports culture is deeply ingrained in its identity, with basketball and auto racing holding particular significance. The state is home to the Indianapolis Colts, a prominent NFL team, and the Indiana Pacers, a staple of NBA basketball. The Indianapolis 500, held annually at the Indianapolis Motor Speedway, is one of the most famous car racing events in the world, attracting fans from all over. High school basketball is also a big deal, with local tournaments and games drawing substantial community support and media coverage, reflecting the state’s passion for sports at all levels.

Insider scoop: Consider visiting during the annual Indy 500 Race Week to enjoy not only the main event but also the numerous pre-race festivities, parades, and fan activities that take over Indianapolis.

3. Indiana has a low cost of living

Indiana has a notably low cost of living compared to many other states, making it an attractive option for those seeking affordability. The median home sale price in Indiana is $271,800, which is significantly lower than the national median of $442,479 and offers great value compared to major metropolitan areas. For renters, average monthly rental prices in Indianapolis are $1,243 for a one-bedroom apartment, further displaying the affordability in larger cities. In fact, the cost of living in Indianapolis is 9% lower than the national average. This combination of low housing costs, reasonable rental prices, and moderate day-to-day expenses contributes to Indiana’s reputation as a budget-friendly place to live.

A lower cost of living is a major advantage of moving to Indiana. Explore additional pros and cons of living in Indiana to get a comprehensive understanding of what life in the state has to offer.

4. You’ll find great higher education options

Indiana is home to several esteemed higher education institutions, offering a range of academic programs and research opportunities. Indiana University in Bloomington is renowned for its strong business, law, and medical programs, while Purdue University in West Lafayette is highly regarded for its engineering and technology disciplines. The University of Notre Dame, located in South Bend, is known for its prestigious programs and vibrant campus life. Additionally, smaller colleges such as Butler University and DePauw University provide excellent liberal arts education and personalized learning experiences.

5. Indiana is a manufacturing hub

Indiana has long been a major player in the manufacturing sector, with a diverse range of industries contributing to its robust economy. The state is a leading producer of automobiles, with major companies like Cummins Inc. and General Motors having significant manufacturing facilities there. The state’s strong manufacturing base supports a wide array of jobs, from assembly line work to engineering and design, reflecting Indiana’s deep ties to industrial innovation and production.

6. The northern part of the state is flat with rolling hills in the south

The geography of Indiana varies significantly from north to south, influencing both the landscape and the lifestyle. Northern Indiana is characterized by flat terrain and extensive farmland, with regions like the Valparaiso Moraine and Lake Michigan shoreline offering expansive views and agricultural opportunities. In contrast, southern Indiana features rolling hills, forested areas, and more varied topography, exemplified by places like Brown County State Park. This geographic diversity impacts everything from local agriculture to outdoor recreational activities, with each region offering scenic and environmental characteristics.

7. Be prepared for the harsh winter weather

Indiana winters can be quite harsh, with temperatures frequently dipping below freezing and significant snowfall occurring from late November to March. The state averages around 25 to 30 inches of snow annually, but this can vary, with northern areas receiving more snowfall than the southern parts. Ice storms and cold snaps are also common, requiring residents to be prepared for winter driving conditions and potential power outages.

Insider scoop: To make winter more manageable, invest in a set of high-quality snow tires and keep an emergency kit in your car with essentials like blankets, food, and a flashlight.

8. Indiana is part of Tornado Alley

Indiana is located in the eastern part of Tornado Alley, making it susceptible to tornadoes, particularly in the spring and early summer months. The state experiences an average of 20 to 30 tornadoes annually, with varying levels of severity. Tornadoes in Indiana can range from relatively minor twisters to more destructive events, necessitating preparedness and awareness. 

Travel tip: Residents should be familiar with tornado safety protocols, have an emergency plan in place, and stay informed through local weather alerts to protect themselves and their property during severe weather events.

9. Public transportation is sparse here

Public transportation options in Indiana are limited, especially outside of major urban areas. While cities like Indianapolis have some public transit services, including buses operated by IndyGo, many rural and suburban areas rely heavily on personal vehicles. This can be a challenge for those who do not drive or prefer public transit options. For instance, outside of Indianapolis, transportation options may be restricted to regional bus services or ride-sharing apps, making car ownership almost essential for daily commuting and errands.

10. Indianapolis is close to major cities

Indianapolis’s central location provides convenient access to several major cities in the Midwest, enhancing its appeal as a transportation and business hub. Located approximately 100 miles from Chicago, 200 miles from St. Louis, and 175 miles from Cincinnati, Indianapolis offers a strategic position for both business and leisure travel. This proximity allows residents to easily visit these cities for work, entertainment, or cultural events while enjoying the benefits of living in a less densely populated area. 

11. The sugar cream pie is the state’s staple

Sugar cream pie is a beloved and iconic dessert in Indiana, known for its simplicity and rich, sweet flavor. Often referred to as “Hoosier Pie,” it features a creamy filling made from sugar, cream, and vanilla, with a flaky pie crust. The pie is traditionally made with ingredients readily available to early settlers, reflecting the state’s agricultural heritage. Popular in local bakeries and diners, sugar cream pie is often enjoyed as a comforting and nostalgic treat, especially during family gatherings and state fairs. 

Insider scoop: For a true taste of Indiana, visiting local spots like the Vanilla Bean Bakery in Indianapolis can provide an authentic slice of this classic pie.

Methodology

Population data sourced from the United States Census Bureau, while median home sale prices, average monthly rent, and data on affordable and largest cities are sourced from Redfin.

Source: rent.com

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Nothing is more exciting than going on a vacation, especially if your adventures take you overseas. There’s just one problem: You live far from the airport and a rideshare is going to cost you big bucks. Instead, you decide to drive, but parking at airports can be confusing.

One place where this is true is at Los Angeles International Airport (LAX). If you’re trying to find LAX airport parking, keep reading — we’ll outline the options available, as well as how to reserve a place to park and save money while doing it.

How much is parking at LAX airport?

LAX airport parking rates vary depending on where you leave your car. There’s a range of LAX-run options available, with pricing as low as $13 per day or as much as $75 daily.

Official parking at LAX airport

LAX offers a variety of parking options for travelers, no matter how long you’ll be gone. Electric vehicle parking is available in all garages (except at garage seven).

Here are the costs for parking at an official LAX lot:

  • Terminal parking: First hour $9, max daily rate $60, prebook from $56 a day.

  • Economy parking: First hour $8, max daily rate $35, prebook rate from $15 a day.

  • Valet terminal: $75 daily rate, prebook from $32 a day.

  • Budget parking: $5 hourly rate, max daily rate $20, prebook rate from $13 a day.

  • EV terminal: Service fee $2, 45 cents per kilowatt-hour.

To park your car at an official LAX lot, your best bet is to reserve a spot in advance. Not only does this guarantee a spot when you arrive, you’ll save money, too. This can be done via the LAX website.

Short- and long-term parking at LAX airport

Long-term parking at LAX is available at all of its lots, though if you’re planning on being gone for a while, you may want to consider one of the less expensive options. The budget parking lot can be prebooked for $13 per day and includes a free shuttle.

The economy lot is another option. Closer than the budget lot, the economy lot can be prebooked for $15 per day and includes a complimentary shuttle service.

You may not want to pay for a full day’s parking at the airport, especially if you’re just picking up someone who’s arriving. If that’s the case, consider timing your arrival with theirs so that you can wait in the cellphone lot or simply drive up to the curb.

🤓Nerdy Tip

The terminal garages, which are directly across the street from each terminal, allow free parking for 15 minutes. If you are picking someone up at LAX, this can be a good option so you don’t have to wait in traffic and loop around the airport again.

If you would rather park, terminal garages are located at every terminal and cost $9 per hour, with an additional $7 for every extra 30 minutes.

Off-site lots

Although LAX offers plenty of its own parking, you don’t need to limit yourself to airport-run lots. The area around the airport is filled with hotels and third-party parking lots that offer parking.

Consider nearby hotels with shuttle service

One option is to park at an airport hotel. For example, you can park at the Hilton Los Angeles Airport in its indoor parking garage from $12.95 per day. The property offers a complimentary shuttle to and from LAX, making it simple to get around.

🤓Nerdy Tip

Make sure the hotel offers complimentary shuttle service at the times when you are departing and arriving. Some hotels don’t offer shuttle service during off-peak hours.

Parking at a hotel can serve double duty, too. If you have an early flight or return late, you’ll be able to take the property’s shuttle directly to the hotel and stay overnight. It’s better than paying for parking at a separate lot, then, picking up your car and moving it to the hotel, which would result in paying twice to park your vehicle.

Leave your car at a FlyAway bus stop

To avoid the traffic in and around the airport, you might consider parking off-site and taking the FlyAway bus service to and from the airport.

One of the least expensive options for parking is the Van Nuys FlyAway stop, which is 24 miles from LAX. The max daily rate to park there is $6. The FlyAway bus also picks up from Union Station in downtown Los Angeles, and the parking there is $8 per day. Keep in mind, if you use the FlyAway bus, you will need to pay an additional $9.75 each way for the shuttle to and from the airport.

How specialized search engines can help

With so many parking lots in the vicinity of LAX, it can be overwhelming trying to find one that suits your needs. Parking lot aggregators such as SpotHero can be helpful in these circumstances.

Not only will you have access to pricing from multiple parking lots with one search, but you’ll also be able to see what kind of parking situation you’ll have, as well as ratings from customers. SpotHero also shows the operating hours of the parking lot, whether you’ll have entry and exit privileges and if the lot offers shuttles to the airport.

Tips for saving money on parking at LAX

No one likes paying for parking, but there are ways to save money when parking at LAX.

Use a travel credit card

If you’re looking to maximize the rewards you’ll earn when paying for parking, this is a good card to use. Even better, however, is that the Chase Sapphire Reserve® offers a $300 annual travel credit valid toward parking lot charges. This credit is applied automatically; you simply need to use your card to pay for the cost.

Chase Sapphire Reserve®

NerdWallet Rating

Annual fee

$550

Consider rideshares

Depending on how long you’ll be gone, it may make more sense to use a rideshare than to park your car. Remember, parking on-site at LAX costs a minimum of $20 per day (if you don’t prebook a spot). Look at rideshare options, including shared shuttles, to see whether leaving your car at home is a better solution.

Look at public transit

Los Angeles isn’t known for its public transit options, but they’re still there. If you’re looking to save some cash, consider using the bus or the Metro line to head to LAX. With costs as low as $1.75 one way to use the Metro, it’s significantly cheaper than parking your car at the airport.

LAX airport parking recapped

Navigating the parking situation at an airport can be stressful, especially if you’re not prepared. If you’re driving to LAX and want to park your car, you have plenty of options.

Before you go, do your research to find a lot that suits your needs — and prebook your spot to save on the costs.

How to maximize your rewards

Source: nerdwallet.com

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Categories

Real Estate

August 2, 2024
by Mark Ferguson

When it comes to real estate investing, the 1031 exchange is a powerful tool for deferring capital gains taxes. But did you know there’s a variation of this strategy called the Reverse 1031 Exchange?

Imagine you find a great deal on an investment property that you don’t want to miss, but you haven’t sold your current property yet. Don’t miss the deal! A Reverse 1031 Exchange allows you to secure the new property while deferring capital gains taxes on the eventual sale of your existing one.

If you’re not familiar with it, this article will provide you with a detailed understanding of how reverse exchanges work, their benefits, and some key considerations to keep in mind.

Disclaimer: A 1031 exchange has many rules and regulations and you have to make sure you complete the exchange correctly to avoid a large tax bill from the IRS. I am not an accountant or an attorney, please consult your attorney or accountant for any specific tax or legal advice.

Table of Contents

What is a Reverse 1031 Exchange?

A reverse 1031 exchange allows you to acquire a new property before selling your current investment property.

This is particularly useful in a hot real estate market where you find an ideal replacement property before you can sell your existing property.

In a traditional 1031 exchange, the process is straightforward: sell your property first, then use the proceeds to purchase a new one. But in a reverse exchange, the sequence is reversed, offering investors flexibility but also adding complexity.

How does this compare to a regular 1031? How 1031 Exchanges Work with Rental Properties

How Does a Reverse 1031 Exchange Work?

Here’s a step-by-step breakdown of a reverse 1031 exchange:

  1. Identify the Replacement Property: You find and decide to purchase the replacement property.
  2. Engage a Qualified Intermediary (QI): Before closing on the replacement property, you must engage a QI who will facilitate the exchange process.
  3. Create an Exchange Accommodation Titleholder (EAT): The QI sets up an EAT, which temporarily holds the title to the new property.
  4. Close on the Replacement Property: The EAT purchases the new property using funds provided by the investor.
  5. Identify the Relinquished Property: Within 45 days of acquiring the new property, you must identify the property you intend to sell.
  6. Sell the Relinquished Property: You have 180 days from the acquisition of the replacement property to complete the sale of your current property.
  7. Complete the Exchange: Once the relinquished property is sold, the proceeds are transferred to the EAT, who then transfers the title of the replacement property to you.

Benefits of a Reverse 1031 Exchange

  • Market Flexibility: Allows you to secure a desirable property without the pressure of selling your existing property first.
  • Time Efficiency: Reduces the risk of being unable to find a suitable replacement property within the IRS’s strict deadlines.
  • Tax Deferral: Like a traditional 1031 exchange, it allows you to defer capital gains taxes, freeing up more capital for investment.

1031 Exchange Savings Calculator

Key Considerations

  • Financing Challenges: Financing a reverse exchange can be tricky since you’ll need funds to purchase the replacement property before selling the old one.
  • Higher Costs: Reverse exchanges tend to be more expensive due to the involvement of QIs and the complexity of the transaction.
  • Strict Deadlines: The IRS mandates strict 45-day and 180-day deadlines, similar to traditional 1031 exchanges, which must be adhered to avoid tax penalties.

Conclusion

Reverse 1031 exchanges can be a valuable tool for real estate investors looking to upgrade or diversify their portfolios without the immediate pressure of selling their current properties. However, the process is complex and requires careful planning and coordination with experienced professionals.

As always, feel free to reach out with any questions or to discuss how we can assist you with your real estate investment journey. Happy investing!

Source: investfourmore.com