Rental Properties In Hard Times

Rental properties in hard times are a fantastic solution to a growing problem. As a market becomes a Buyer's Market, home prices begin to drop and even so, some people just aren't able to sell their houses.

I know a couple who is trying to sell their house in southern California and move to northern California, but their house has been on the market for two solid months and still nothing. Don't get me wrong, people come in and check it out. They must have had at least five open houses by now, but the owner keeps telling me that he will probably have to start renting it out. The same thing was happening to his next door neighbor and his neighbor decided to rent out the property and is now in a new house, while someone pays him good money to live in his own. I think my friend will wait another two months and if nothing happens, he'll put his property up for rent.

The Trouble With Renters

Trust me, renting out your property is not worry free. There are any number of things that can go wrong: plumbing leaks, stove malfunction, garbage disposal malfunction, property damage, etc. Yes, there are a lot more possible problems but this comes with anyone living in your house and using the house normally.

Sometimes it is impossible to find a renter. There will be a month, maybe even two where you won't have anyone to fill a vacancy and you will have to foot the bill yourself. It is important that you have enough money where this isn't a problem. The same goes for replacing appliances and having the plumber show up. You should be able to pay for these things.

Rest assured, you will get that call in the middle of the night that the toilet is backing up and you need a plumber, stat. Now I'm not necessarily saying that will be the topic; you may have very nice pipes and an uncloggable toilet. What I'm saying is that things happen and never on your schedule, so just be prepared.

Rental Management Companies

So because there are the pitfalls of an unfilled vacancy, payments that don't come in on time, having a fair rental payment for the home's value, unscreened residents and all the time it takes to actually manage a property, a place for Rental Management companies was born.

For a percentage of the annual lease amount (typically around 5-10%), you too can have the peace of mind that comes with having a management company.

These companies will do essentially everything there is to do, they will do:

• Advertising
  
• Rent collections
• Tenant Screening
• Eviction
• Preparation of Vacancies
• Maintenance
• Accounting
• 24-hour Paging
• Lots more, depending on the agency.

Basically, after you hire these people, you can relax about the overall situation of renting but you can also kiss 10% of your money goodbye. In my mind, it's a small price to pay for the peace of mind they bring.

Renting For Profit

If you've decided to buy a rental property for profit, kudos to you. You may not be making much profit, but the point is that you're taking some crucial steps to financial independence.

Let's say you find a house for sale for $75,000.00 in a nice little neighborhood and decide to put a $10,000.00 down payment on it. On a 30 year loan at 6%, the monthly payment for the house would be around $400. Let's say property taxes come out to $100/mo. So your monthly payment would be somewhere around $500/mo, so just to be fair, let's hike that up to about $650/mo after all the fees are paid.

Now let's say you find a renter for around $700/mo (not a bad price for a whole house), and you take a nice deposit of $1400.00 (not to be spent, of course, but used as interest). So you're profiting $50/mo and your mortgage is getting paid off. Not bad.

Two years pass and you start getting offers for the house to sell at $85,000.00. Do you sell? Well, feel it out. If you honestly feel that the house is worth more, tough it out. Wait for the property value to go up some more. Even though your initial investment has doubled its value in only two years, it might be smarter to instead take out an equity loan.

What is an equity loan? Basically, you are borrowing money from the bank using your equity. So now that he house appraises at around $85,000.00 and you've paid your house down to roughly $49,400.00 using the renter's money, you would be able to take out a nice ~$30,000.00 loan. Now, you can pocket $15,000.00 of that (your initial down payment plus profit) and use the other $15,000.00 as a down payment on another property. Now you've made your money back and you still own the asset. Plus, you'll be gaining another asset with another renter with around the same monthly profit of around $50/house or $100/mo total profit.

You can repeat this process a number of times and make a killing. Your net worth will grow, plus you'll be re-investing the money you earn in a high yield savings account like INGDirect or HSBC where you get around 5% APY, so you'll be profiting in that way as well.

Before I close up, I'd like to take a second to recommend this eBook to you fine people. It's called How To Get A Home, Rent To Own and despite its webpage, it really is a good guide. So check it out and let me know what you think!

Please leave any questions or comments you have in the comments section, and tune in tomorrow for more on finance! Until then, hopefully you have no more problems with rental properties in hard times!

Using myLot To Generate Income

Using myLot To Generate Income

Now, there aren't many sites out there where you can just fart around and make money but if you're a fan of MySpace then you'll love myLot.

If you were to combine MySpace, Digg and Kazook, you would get myLot. This site combines the social networking of MySpace with the fierce competition of Digg and the payouts of Kazook. In fact, you can make more money on this website than with Kazook.

In the first few hours I used it, I made between 10 and 20 responses and started about 3 discussions. The next day, I had $0.20 .. which I admit is terrible. Today, I upped my responses to about 100 and started about 30 discussions to which some were heavily replied and I'd imagine I will get closer to $1.00 or perhaps $2.00.

That's great and all for someone who likes to comment a lot and get a lot of feedback from people, but this is a serious blog it has a specific purpose- to show you how to make money.

The real secret here is in referrals. If you can refer 50 people like me to the site who generate about $1.00 a day and you get 25% of the earnings (which you do), you're going to get around $25/day for doing nothing. ~$750/month is nothing to sneeze at and would be a great addition to your passive income and your asset column. See, the best thing here is that there is no limit to how much people can generate on this site ... sky's the limit. So potentially, you could refer 100 people and get twice that. It's all about the math.

Aside from all that, give the site a try and see what you think for yourself:

myLot - Money For Social Networking

When you do, let me know what you think and what kind of vibe you get. Success stories are welcome as well!

-Scott

Using myLot To Generate Income

Using Kazook To Generate Income

Using Kazook To Generate Income

I just started using the Kazook service, of course, to give the good word to you great people. I thought I'd review it and make a bit of cash in the process.

The idea behind the service is that searches you'd normally just do on a search engine would probably be lost money to someone. Simply put, Kazook wants to be the someone it doesn't get lost to. By using their search tool, you get paid $0.01 per search you do and there's a limit of 200 searches you can do per day (or $2.00 per day) max to get paid for.

The secret to this site is referrals. If you can find a way to generate referrals, you get 50% of their commission. So if you refer 50 people and they all max out their paid searches per day, the site says you'll get $3,000.00 but I think you'd get more like $1,500.00 (50 * 2 * 30 / 2), plus your own commission.

What's cool is that if you can train yourself to search using only Kazook, and you max it out daily, you can pay for your cell phone or something like that. Not a bad trade-off for just searching on their website, I think.

You can test it out by clicking here:

Kazook.com - Search and make money!

Anyway, I've been using it for about 15 minutes and going search crazy. I've already made $1.00 but we'll see. Keep me posted with your earnings.

Using Kazook To Generate Income

(Review) Rich Jerk: I'm Better Than You

Rich Jerk: I'm Better Than You (eBook)

Five years ago, there were a few choice eBooks out there describing how you could become a millionaire just by buying their book and following their instructions. The trouble was that there were no clearcut instructions on getting rich, they offered no real assistance and instead told you (with a lot of words) basically what you already knew. Today, there are probably millions of eBooks out there that are exactly like those and you should be very careful when paying good money for informational products.

I heard a lot of good things about the Rich Jerk's eBook. Despite his crude approach, I found him to be very informational myself so I decided to give his book a try just to review it for all of you good people. The book itself is $39.99, which seemed steep at the time, but later I found out it was actually a steal for the information he doles out.

Once I had the eBook, I opened it up with Adobe Reader and was greeted with a short intro that promised me a short read and a nice table of contents, properly linked to all the information. It goes over creating affiliate websites, pay per click strategies, search engine optimization strategies, selling informational products, buying on ebay and even goes into detail for beginners.

Now, normally when you buy an eBook you expect the worst and that's what you get. It took me about 45 minutes, but I read through the whole thing and found the instructions to be accurate and with just enough detail. I like to actually follow along and test these things for reviews just like this.

A main theme I noticed throughout the guide is that you have to actually get up and DO something, which is a problem for many people starting out but I agree fully. If you're not prepared to do *anything*, this will NOT work for you but if you're prepared to do a few things on a semi-daily basis, this is perfect.

Of course, I can't go into much detail as that would be copyright infringement but I will say this: This is one of the few good informational products you will come across and even if you're not good at making web pages, you can still make a lot of money using the Rich Jerk's techniques.

So to summarize- great book, solid information and I recommend it. Go grab yourself a copy.

Rich Jerk: I'm Better Than You (eBook)

Kids, Start Getting Rich

Kids, Start Getting Rich

For anyone who lives with their parent(s), it’s time to take advantage of the situation for both your good and the good of your parents once you’re taking care of them. All too often, I talk to people still living at home (some in their 20’s) and I envy them. I think to myself: had I known earlier what I should be doing, I would be even richer than I am today. Think about it, if you start saving $25/mo at age 13 in your savings account, by 18 you’re going to have about $1500 (pre-interest). And that’s if you don’t get a job first!

Now, for the kid who gets a job at 16 and saves even a quarter of his paycheck, he is already preparing himself to be a wealthy man. Let’s say Jimmy makes $6.75/hour (California minimum wage) and works 20 hours per week. Now let’s say he keeps about 80% of that after the government takes its slice. Jimmy keeps about $432.00 and wisely decides to save half in his bank account. Each month for a year, Jimmy saves $216.00 in his bank account and soon he’s saved $2600 with interest. Not to mention, since Jimmy is such an excellent worker and hasn’t missed a day in a year, he gets a 50 cent raise and now earns $7.25/hour. For another year, Jimmy works 20 hours per week and saves half his paycheck. At the end of that year, Jimmy now has about $6100.00 in savings and could still afford to buy himself food, gas and clothing.

Wow, $6000.00 and only 18 years old. Even if this were only $5000.00, you’d probably still be impressed with Jimmy’s savings. Imagine if he had saved 75% or even 100% of that. My point here is to take advantage of living rent-free while you can, especially if you stay after high school.

The Richest Man In Babylon

Before continuing, I’d like to urge you to read this free eBook: The Richest Man In Babylon (eBook) by George Clason. In the book, Clason gives several very important lessons in the forms of parables. One of the most important of the lessons is to have your gold (money) work for you like a slave, and that’s what we’ll talk about next.

Make Your Money Work For You
Money is the best kind of worker; it doesn’t require food, sleep or bathroom breaks. It will work non-stop, 24 hours a day, 7 days a week, 52 weeks a year. The trick is getting it to earn more as it does work. This can be done in a number of ways:

• Interest on savings
• Earnings on stocks
• Profits from a business
• Many more…

Let’s talk about interest on savings, the most basic way to get your money to work for you. It’s very easy to understand: you put $10,000.00 in the bank and the bank gives you a 2% interest rate on your money, you earn ~$200.00 in interest. While you were sleeping, your money was making you a nice $16.67/month just for placing it in the bank. You can imagine having $100,000.00 in the bank and getting $2000.00 in interest or even $1,000,000.00 and getting $20,0000.00 in interest. Not to mention, that’s only at a 2% interest rate. Banks like INGDirect and HSBC offer accounts with 4-5% interest.

That is power. All you do is put your money in and let it grow. If you need $40,000.00/year to live comfortably and you have $1,000,000.00 in your HSBC account earning 5%, you can take out $40,000.00 that year to live on and leave $10,000.00 in there to grow. It really is a beautiful thing.

The same goes for stocks, only stocks are a fair bit riskier as they have the power to quickly lose value. On the other side of the same token, they also have the power to gain value extremely fast. Just think about all those people who invested in companies like McDonalds or Microsoft. They were either extremely lucky or paying close attention. In either situation, they were prepared to take that risk and it paid off for them, immensely.

I am friends with a couple who invested in McDonalds before its boom some time ago. They are now multi-multi-millionaires and do not need to worry about money. Talk about having your money work for you!

Now if you own a successful business (doesn’t fail within 5 years) and it grows at all, you are now earning money and it is working for you. Don’t confuse owning a business with running a business; I am speaking strictly of owning a business someone else runs. It’s a beautiful thing. This can be anything from a furniture store to renting out apartments and receiving money. I’ll leave that part up to you.

Surround Yourself With Rock Stars

Laugh all you want but I’m dead serious. I don’t mean rock stars as in just people who play fantastic music for a living. When I use the term ‘Rock Star,’ I’m talking about people you aspire to be like. If you aspire to be a football player, go make friends with the best football players. If you aspire to be a mechanic, go find the top notch mechanics and make friends. Or if you aspire to be rich, surround yourself with people who make more money. Why would I want to surround myself with these people, you might ask. Simple. Knowledge is contagious. If you hang around these people with open eyes, you will learn what they do through osmosis.

Football people talk about football, mechanics talk about cars, rich people talk about being rich. It’s all part of the game. People talk about what excites them.

But don’t stop there– if you want to know about anything, find the expert and interrogate them. You’re thirsting for knowledge and they have the elixir. Experts not only have experience but they’ve also had the experience of watching others fail and make big mistakes. If you want to be truly successful, you must learn from other people’s mistakes.

OPM - Other People’s Money

You can make a lot of money by working hard for a long time and saving. In fact, that’s the traditional thing to do and I wouldn’t be surprised if your mother or father told you to do so.

Imagine if you didn’t have to work so hard to get the same amount of money though. “Where would this money come from?” you might ask. Well, the same way your father probably got the loan to buy his house and got into 30 years of debt that took money out of his pocket, you can put money into yours. Banks, credit unions and various other loan agencies are willing to loan their money out for profit (as I’m sure you’ve heard).

Let’s say at 26, you have a decent credit score and are able to get a $300,000.00 loan to buy a condo duplex. You find a duplex for about $250,000.00 at about 6.5% interest. Your payment comes out to about $1850/mo after tax. Now let’s say you get two renters at $1300/mo each. Now you’re making an extra $750/mo for managing the apartment complex and you’re doing two things:

1. Profiting $750/mo for doing virtually nothing, therefore increasing your net worth passively.
2. Buying a piece of property but having other people pay for it.

So at the end of 30 years, you will not only have $270,000.00 in profit but you will also own a duplex which could be worth much, much more.

Now let’s say it’s two years later. You’re 28 and have built up extra cash from the property. Nothing has gone wrong yet, so you’re free and clear. Now you qualify for bigger loan since you’ve established that you can pay on time. You qualify for a bigger loan of about $325,000.00 so you find a house for sale at about $300,000.00 and snatch it up at 6%. After taxes, the payments come out to a nice $2000.00/mo and you’re able to find a renter at $2500.00/mo.

Now you’re earning $1250/mo passively and buying two properties. Imagine if you had 10 properties, or 20. You can see where this could go. Once the bank trusts you with their money, you can make money intelligently. You’re also working smarter instead of harder.

This is no secret, but more so a popular way to become wealthy in both money and assets.

Kids, Start Getting Rich.

Building Wealth

Hello and welcome to my blog about getting rich and staying there!

If you aren't already, you should be thinking about getting rich and doing so with as little effort as possible because if you're like me, you're lazy and don't like people in general. For me, getting rich was simply a matter of being honest with myself about this and working around it.

From this point forward, I will tell you how I started getting rich and how I keep doing it.