Do you want to buy a home or do you want to rent for the time being?

I was talking with a friend of a friend the other day. He was just informed that his parents were moving out of town and that he would be on his own. At this point he decided that he wanted to move in with his long-term girlfriend. That’s cool. The only problem is that her family will be putting in about most of the money for the down-payment for the home mortgage. That’s a big problem in my opinion because you’ll always be in debt to your in-laws. I’m not sure that’s something that any young person wants.

Before I go off on a tangent, I really wanted to look at the idea of why everyone wants to buy a home instead of renting for the first few years.

Buying a home feels like the next logical move.

Buying your first home is a big move financially and emotionally. Yet for some reason, buying property is a move that we do without much thought at all. We just assume that we need to buy a place. We finish college, find a job, and then want to buy a place. It just feels right to buy a home in your 20s.

Renting is viewed as a waste of money.

I’m not sure why so many of us consider renting to be a waste of money. You’re paying for a roof over your head. Yet whenever I speak to a friend, they claim that they don’t want to rent because they don’t want to waste money. Little do these people realize that home ownership can at times be the biggest waste of money. Think of property taxes, maintenance fees, sometime breaks around the house, or mowing the lawn. You’ll be spending much more money when you own a home compared to renting a place out.

Buying a home is seen as passive income.

When it comes to passive income, many of us feel that buying a home is a great strategy for generating extra money without much effort. This couldn’t be further from the truth. Do you know how much work goes into buying a home? A ton.

The only time that buying a home can be passive income is when you become a landlord. Even at this point you’re still going to have plenty of work. You could hire a property management firm or you could do everything on your own. Either way, it’s not going to be easy.

At the end of the day, the decision to buy or rent in your 20s is all up to you. I just want you to be more informed with your decision. Good luck!

I just went to check out my online banking account, and I was surprised to see that my credit card balance was much lower than I had expected it to be. Not that this a problem, but I was curious to see what had happened. Then I noticed that I receive my annual cash back rebate from my credit card. I received $160 back from my credit card company. That was pretty sweet because I forgot about it and my balance was decreased to a minor amount. That means I got an extra $160 to spend on whatever I want (or perhaps save the money).

I wanted to share a little secret about credit cards today…

Credit cards can actually be passive income.

You can actually get money back from a credit card. This year I got back $160 from my credit card as a rebate. This number varies depending on how much you spend on your credit card and what the maximum limit for cash back is with the credit card. The beauty is that if you book group trips and put all of your expenses to your credit card, you can build your credit and get some money back in the process. Sounds like a good deal to me.

Is a cash back credit card for everyone?

There are many credit cards with 0 interest out on the market. These are helpful if you carry a balance on a monthly basis because you’ll spending less of your money on interest payments. You’ll also be able to pay off your balance quicker.

A cash back card is ideal for the more advanced credit card user that pays off their balance and has established a decent credit over the years. If you’re in debt right now I wouldn’t suggest a cash back credit card or any new credit card for that matter. The main priority when in debt should always be to pay off all debt.

Are credit cards always passive income?

Credit cards aren’t always passive income because many people get into credit card debt and end up spending a fortune on interest. This is what the credit card company wants to do. They want to entice you with potentially attractive offers and then have you as a customer for life.

At the end of the day, if you use your best judgment and don’t let your credit card company use you then you can make passive income with your piece of plastic.

How seriously do you take conspiracy theories? How do conspiracy theories even tie into passive income?

One of my friends came to my birthday this year and we got into chatting after a few drinks (always a bad idea). This friend is a huge fan of conspiracy theories. He watches all of the videos that come out, reads all of the blogs, and stays updated on the newest conspiracy. He also collects silver coins, doesn’t have a bank account, and is predicting doom for the near future. I try to avoid these conversations. Luckily I avoided the conspiracy topic this year. Unfortunately, I overheard another buddy get into it with him about conspiracies. They went over the usual Obama stuff, taxes, saving money, and real estate collapse. I didn’t even bother chiming in.

What’s my take on conspiracy theories?

They are entertaining. I’ve watched a few of these conspiracy videos in the past because many of my friends recommended them. These theories are fun to learn more about. It’s important that you open your mind to both sides of every story. There’s a lot of information out there that just isn’t available to us. It’s important to embrace all side sides and understand why people feel a certain way. I don’t believe in ignoring or dismissing an opinion just because you don’t believe in it.

This brings me to my next point…

You can’t let conspiracy theories consume your life.

My friend doesn’t believe in a bank account because he doesn’t want the government to know what he does with his money. That’s an interesting way to look at things. My personal belief is that you shouldn’t live in fear. You especially shouldn’t let conspiracy theories consume your life to the point that every decision you make is determined by some video you found on YouTube.

The good news is that…

It does pay to be informed.

I’ve met a few individuals that are convinced that money is going to be worthless in the next few years. That may sound far fetched to you right now, because it is to me. These individuals feel informed. I can’t judge them because I’m a huge fan of the work of Tim Ferriss and other lifestyle design bloggers. To outsiders, lifestyle design itself feels likes a scam. To me, it’s a great way to live life.

However, after putting everything into consideration…

You need to take care of yourself.

You always have to take care of yourself. You can’t blame the government or some authority figure for your current situation. You can’t blame the decision makers in government for why you have no money. You need to do everything within your power to take care of your own income and savings.

Time to tie in passive income and conspiracy theories.

Passive income is a scam and a bit of conspiracy to some. Whenever I tell some stranger about this blog, they think I’m running a conspiracy of sorts. They just don’t believe in the idea of passive income. They think it’s a scam.

For me, passive income is a way of generating money more than once from work that I only do once. Not a scam if you asked me.

At the end of the day, there’s nothing wrong with being entertained with the occasional conspiracy theory. You just can’t let them consume your life.

You’ve come a long way by now. You have the rental property. You found the right tenant. Now you need to maintain this source of passive income. It’s time to maintain the rental property and make sure that everything runs smoothly.

Let’s assume that you choose to do all of the work yourself with managing your first rental property. I’m going to assume that you’re ready to be a landlord.

How does the process work now? How do you maintain the property once you have the rental property and source of passive income setup?

Figure out the payment situation.

How are the payments going to work? Will you collect all of the checks in advance? Will you do direct deposit? Perhaps, you’ll be super modern and use Paypal. I ended up collecting the checks in advance. The only problem with this method is that you have to actually go to the bank every single month. You can do a direct deposit or any other method. All that matters is that you figure out how you plan on collecting the monthly rent check from the tenant. Once you figure out the payment situation (as stated in your rental agreement) you can now know how you’re going to earn your income.

Leave contact information.

Leave your cell phone number and an emergency contact number with the tenant and the management company (if it’s a condo). Your tenant needs to be able to reach you at all times. If you’re going to be out of town then you need to leave a trusted friend’s information. The reason for this contact information is that someone needs to be there at all times for the tenant to deal with any issues that may arise. On that note…

Deal with all issues with the property as they come.

There will be problems that arise with your rental property. As the landlord, the onus is on you to deal with the problems. You should expect phone calls at the most random times of the day. You can have a trouble tenant that complains about the water not being hot enough at six in the morning. Then you can have a more respectful tenant that just breaks something by accident in the middle of the night. Expect your phone to ring at the most random times.

There’s no easy solution here. You just need to deal with the issues as they come. There will be plenty of different issues that can potentially come your way. Some issues will be within your grasp to resolve. Other issues could be a bit too complex. When an issue is too complex for you, you need to outsource it. Don’t know how to fix the toilet? Call a Plumber. It’s pretty simple. You just need to deal with all issues as they come.

Maintain a strong relationship with your tenants.

Renting out your property needs to be a mutually beneficial situation. Your earning money while the tenant has a place to stay. This relationship needs to be taken seriously. You’re giving them a place to sleep. They’re paying you their hard earned money to do so. There’s no need to be rude or disrespectful to each other. You both need each other. This is why I recommend doing whatever it takes to maintain a strong relationship. How you do this is common sense and up to you.

That’s what you need to do to maintain this source of passive income. Nobody said that relying on real estate for passive income would be easy. You’re going to have to invest some serious time and money into real estate income projects. The good news is that your first rental property will be an amazing learning experience. You can easily transfer over the skills and purchase more properties as you get more into real estate.

Check out the rest of the Landlord’s Starters Kit:

Do You Want to be a Landlord? Let’s Look at Every Cost Involved
Is Buying a Rental Property Passive Income?
How Do You Become a Landlord?
Should You Hire a Property Management Company?
How to Find a Tenant For Your Rental Property.

So you’ve started a blog, and now you think you’re ready to earn some money. My first tip of caution is that you should never start a blog with the intention of making money. That’s where the first mistake is made. Blogging should be a passion, a hobby, or at least a past time. People can see right through to you if you’re intentionally trying to profit off of them, and they won’t allow it to happen. However, if you enjoy your blog outside of making money, you can stand to make a nice amount of dough, and it can truly be passive income. So how do you increase your advertising revenue and start earning some decent cash?

1. Blog consistently for at least 6 months: New blogs simply aren’t going to have the credibility or audience for advertisers to notice. You have to be around and heard by a few people first before companies are going to want to be seen on your blog. If you have an active blog for at least 6 months, trust me, advertisers are going to notice. 6 months is still relatively new, but it’s long enough for people to start talking about your site, coming to it, and wanting to be featured on it.
2. Join a blog network: While many veteran bloggers don’t think a blog network is worth it, it’s great for newbies. Blog networks are a way for you to connect to other bloggers, as well as advertisers. Big companies who are looking for web campaigns connect with these networks, ask them to find a few bloggers who write about specific topics, and they will offer you compensation for a post, a link, or a review. I’m part of 2 blog networks: Yakezie and Clever Girls. Both have been awesome in finding me a few advertising opportunities.
3. Become an authority: Advertisers aren’t just paying you because they want to. They want the relationship to be mutually beneficial. In exchange for compensating you, they want to get their branding in front of your audience, in hopes that your readers will become their customers. So you need to be an authority in a niche or category. Is your blog about food or fashion? Do you talk about parenting and marriage? Brands in these markets will look for blogs and websites in the same market so they have a better chance of finding customers. Decide what market your blog is focusing on, and work on being one of the best blogs in that field. A great resource for this is Technorati, as it has multiple verticals and thousands of blogs that are ranked in those verticals. See what the top 10 sites have that yours doesn’t, and work on becoming one of those top blogs.
4. Get your numbers together: Advertising is a numbers game. How many people does your blog reach? If you don’t already have it installed, you should install an analytics program like Google Analytics, to keep track of your readers. How many people visit your site per day, week, month, quarter? Where are they from? What browser do they use? How many pages do they read? How long do they stay? Advertisers are going to want to know this, and your numbers are going to have to be impressive. You won’t find advertising revenue if the only person who reads your blog is your mom. You need new people reading everyday.
5. Have a price in mind: Once advertisers do start reaching out to you, you’ll want to have prices in mind. I have an Advertising Manager who handles my requests for me. Crystal came up with a list of prices for different types of advertising based on my site’s statistics, and she sends it to the people requesting advertising opportunities. I usually don’t budge on my prices, as I know what my site is worth. Obviously, you’ll get some lowball offers, but they’re trying to be thrifty just like you. Don’t overprice yourself, especially if you’re new. Try a few different prices and see the response you get, or hire Crystal and she’ll help you out.

These are the first steps to getting more money from advertising on your blog. Be patient, and the advertisers will come to you.

Are you ready to finally sign over your rental property to your tenant? It’s now time to take care of all of the paperwork for your rental property.

There’s no such thing as a handshake agreement when it comes to real estate. I 100% am against doing business with family or on relying on some sort of a personal deal. This could work in the perfect world. In the real world, it’s just not going to happen. You need to take care of the legal documentation.

I know that I sound like a broken record, but your rental property is your greatest investment. You need to protect it. This is why you need a bulleftproof rental agreement. You need to take care of your paperwork before you hand over the keys of your unit.

What’s a lease agreement all about?

The lease agreement is going to contain the basic information for both parties. Every single bit of discussion that you guys have had needs to be mentioned in this document. This will protect both parties.

The lease agreement is also going to contain the important details about your situation. The complexity of this agreement will depend on the type of property that you plan on using to generate rental income. I personally believe in simple condos. If you want to get into multi-unit homes and commercial property, you’re going to need a much more complex agreement.

This should include all of the following items:

• The monthly cost of rental.
• Location of the unit.
• Primary and emergency contact information for both sides.

Now that you know what the lease agreement is all about, you need to know what to watch out for.

What should you watch out for in the rental agreement?

You need to figure out a few things together. How you decide on the details should be based on the market and any sort of personal deal both parties come to. I personally found that I could charge $1, 400 with utilities being extra. I could get away with this because it’s a downtown property. You obviously couldn’t charge as much in some sort of a rural community.

The specifics you need to watch out for with your rental agreement include:

• Who will pay for damages?
• Can one party back out of the deal?
• How will damages be dealt with.

I must really stress that you need to put everything that you guys discuss into the agreement. Every little piece of details need to be on paper. If it’s not on paper then it doesn’t really count because there’s no proof of it.

Do you need any more documentation?

You can technically create another document between yourself and your new tenant. The point of another document is to outline how both parties plan on dealing with certain possible outcomes should they occur. For example, you can set limitations on what the tenant can and can not do within the unit. If you don’t want a wall painted then you can put this into the agreement. You can really put anything that both parties agree on. Will you allow the tenant to sub-lease the unit if they want to go away for the summer? Will you give the tenant some flexibility if they can’t come up with their rent? These are all questions that need to be addressed at the beginning, not as they arise.

On the other side, this is all information that can be placed into the original rental agreement. You don’t need to create a separate piece of documentation if you don’t feel the need to.

Where can you find this paperwork?

There are many options for finding the proper paperwork. The good news is that you don’t have to come up with an agreement from scratch. That would be far too time consuming.

Here’s a sample lease agreement from my part of the world. All you have to do is Google “sample lease agreement” and try to find one that you think is the best. All of the templates are out there. It’s just a matter of finding the right sample lease agreement.

I really hope that you take the paperwork for your rental property seriously. I don’t want to doubt anyone but you really need to protect yourself. You never know when you’ll get hit with the tenant from hell. You don’t want to be screwed over by some highly unethical person.

Check out the rest of the Landlord’s Starters Kit:

Do You Want to be a Landlord? Let’s Look at Every Cost Involved
Is Buying a Rental Property Passive Income?
How Do You Become a Landlord?
Should You Hire a Property Management Company?
How to Find a Tenant For Your Rental Property.

One of the questions I’m often asked, as well as many other bloggers is how to make a career out of it. It’s hard to think that someone can really make money without leaving their home, or even in their pajamas. But it’s very possible and can be very lucrative. Being a blogger can be your primary source of income or it can be a secondary source. I wouldn’t call it completely passive, but eventually you won’t have to put as much work into it in the long run. So how do you begin making money as a blogger?

• Have a self-hosted blog: People take your blog a lot more seriously when you have your own domain name. A site that is something.wordpress.com or ablog.blogspot.com isn’t going to cut it. Not to mention when you set up a free blog, at least on WordPress.com, you’re not allowed to host advertising, which will be a nice chunk of your revenue for your blog. I have a bias towards WordPress.org, which is free, and buying a domain name is relatively inexpensive. You can get yourpersonalblog.com for $10. You have to invest money in order to earn money.
• Provide compelling content: Your blog isn’t going to earn you money if you have boring content, copied content, or no content at all. You’re going to need a unique spin on topics, interesting information, and something to keep readers coming back. You may have heard that content is king, and it’s true! You’re going to need to invest time in writing for your blog. I suggest writing at least 3 times a week, posts of at least 400 words. Keep this momentum up for at least 6 months. It’s going to be difficult, but blogging isn’t as easy as everyone things.
• Gain some authority: You’re not just writing for your readers, but in the beginning, you’re also writing for search engines and ranking systems. Since advertising can be a huge chunk of a blogger’s revenue, this is important. Advertisers want to know where you rank amongst other sites on the web. Things like your PageRank (calculated by Google), your mozRank (from SEO Moz), and possibly your rankings for certain keywords are going to come into play. If you’re not aware of what the heck SEO is or how to do it, SEO Moz has a great beginner’s guide you can read up on.
• Weigh your options: There’s many different ways you can earn money as a blogger. As we mentioned, advertising is one of them, but there’s multiple types of advertising. You can do display ads like the AdSense units you may have seen before. You can sell text links and banner ads to private companies. You can write posts advocating companies, or have them write the post for you. There’s also affiliate marketing (selling products and services on your site through a special link and getting a commission), selling products (like eBooks, courses, apps, etc.), freelance writing, and speaking at events. Since there’s so many options, you should consider which you would be best at, try them out, and identify which is proving profitable.

Bloggers who make money are more than just a person behind a computer screen. They’re marketable, whether the individual or the blog itself. However, everything should be taken in stride, and should be handled one step at a time. Start with these steps and continue until you reach your goals!

Blogging work is easy. Why do so many bloggers complain about blogging-related work?

How challenging is it to write an article? What’s so hard about responding to emails? Why can’t you publish often?

I hate when bloggers complain about how much work they have. Get a life. It’s not that hard. Sorry to break it to you.

Where did this all come from? I talk to friends that work in different fields. There are much more physically and mentally demanding fields than blogging. All you have to do is write some articles.

If you don’t like to respond to emails then simply outsource this task. Just pay someone else to deal with your emails. Problem solved.

If you don’t like to write, then stop writing. You can do podcasts or video blogs. You don’t have to write. If you hate it so much, then stop stressing about it!

Can you stop complaining about blogging work? It’s really annoying. If you want to earn any income through blogging, you need to stop stressing about how difficult it is.

Last week we talked about how to publish an eBook, a method of passive income. Now that you know what it takes to create an eBook, now you need to figure out how to publish it. If you’re choosing the digital version exclusively and not a paperback or hardcover book, you’d probably do best publishing the book yourself. It’s the most cost efficient way to get your work out to the public, earning you more money for sales as well. Keep these websites in mind for your self publishing needs:

Lulu.com is an all-inclusive resource for aspiring authors. It gives you the ability to not only publish eBooks but also physical books as well. You can produce your book with different binding options, edit your novel, create a stunning cover, publish, and market your story. For your eBook, all you have to do is upload your file, create a cover, describe your book, pick a price, and promote it. It’s that simple! You also have the option of getting an ISBN to track the sales of your books. As for revenues, Lulu lemon boasts that the author keeps 80% of their profits, and they have an awesome deal that you can keep 90% of the profits through January 31, 2012. You can publish your eBook for iBookstore and Barnes & Noble’s Nook platforms.

Smashwords.com gives you a great do it yourself option for publishing your eBook for the masses, making it available for some of the hottest eReaders out, including Kobo, Nook, Sony eReader and Apple products. You can either earn 65% of your revenue from the major eBook storefronts or earn 85% if you sell your book on the Smashwords platform. Doted as the world’s largest eBook distributor, making your eBook is free on Smashwords, and gives you lots of support including a style guide and unlimited updates.

Kindle Direct Publishing is Amazon’s answer to self publishing for their Kindle platform. Most likely the world’s largest eBook storefront, offering an array of titles to be read on the Kindle device or on free Kindle software for your computer or smartphone. With their 70% royalty program and the ability to publish in multiple languages and price in multiple currencies, Amazon has a great and free service for authors. If you already are selling a hard copy of your book, you can link your Kindle version to it. Readers also have the chance of “borrowing” your book through Amazon Kindle’s lending program, where they can rent your book for 14 days.

PubIt! is for those looking to publish for the Barnes & Noble Nook. Publishing with the world’s #1 bookseller is not a bad idea at all, and it’s just as easy as some of the other options. You upload your content, you format it, you price it, you sell it. The Nook is quickly becoming an awesome eReader competitor, offering a color version and a great price.

You can also choose to offer your eBook as a PDF, which is a supported format for many eReaders. This would be a much more do it yourself way, as you would format the book on your own in your word processer, include your cover, you’d have to purchase your own ISBN if you want one, consolidate everything in Adobe Acrobat, and do all of the marketing yourself, having people come to your website or push for affiliates to help you sell your book.

Have you written your book yet? Where would you like to see your eBook offered as far as eBook storefronts?

There are many landlord responsibilities that you need to worry about before you get the tenant in the property and then once you have a tenant living in your rental property. This is the part where you’re still screening applicants to see who’s going to get the keys to your property.

When it comes to landlord services you need to focus on conducting a credit check before you get anyone into the rental property.

What’s the point of a credit check for a landlord? Why does a credit score even matter at this stage of the game?

You want a reliable tenant.

Once again, a rental property is a huge investment. You’ve poured in a serious amount of your savings into this property. You want to give the keys to someone that’s going to take care of the place and pay their rent on time. A credit score shows how reliable the person has been with meeting their financial obligations in the past. You want someone in your unit that has a history of being reliable, especially with their finances. You don’t want to give the keys to your property to someone that has built up a past of not paying back money that they borrowed. You want the most reliably person possible in your rental property.

A credit score is a tangible number.

Regardless of if you like it or not, a credit score is a quick way to gauge where someone stands financially. You can argue the accuracy of a credit score and complain about it. The harsh reality is that the three digit number is very important. When screening applicants you can easily hit a deadlock. Meaning that a few candidates have excellent jobs, savings, and references. You’re going to need some sort of a tie breaker. This is where a credit check comes into play. The credit score will show you roughly the financial situation that the person has created over the past few years.

Now it’s time to contradict myself a bit. I’ll always be the first one to spread the good word of a high credit score. On the flip side, I’m well aware of the fact that some people don’t have the best credit for one reason or another.

Is a credit check the most important thing?

Nope.

The truth is that the credit score should be a deciding factor when it comes to deciding between two applicants with similar credentials. Other then that scenario, I don’t want to use an average credit score against someone that chose not to get a credit card, and thus couldn’t build their credit up. Many ambitious 20-somethings haven’t had the chance to build their credit yet. Some young people don’t want to get a credit card for personal reasons. Other 20-somethings were simply too busy in college and working on moving up the ranks to worry about building credit. You can’t use that against these people.

Before we part ways for this section, let’s answer the question in one word.

What’s the point of a a landlord running a credit check on possible tenants? Reliability.

That’s all that needs to be said about screening tenants for your rental property. We’re going to move forward with the idea of having the ideal tenant chosen.

Check out the rest of the Landlord’s Starters Kit:

Do You Want to be a Landlord? Let’s Look at Every Cost Involved
Is Buying a Rental Property Passive Income?
How Do You Become a Landlord?
Should You Hire a Property Management Company?
How to Find a Tenant For Your Rental Property