7 Ways to Earn Passive Income

Kues / Shutterstock.com

It may sound like a fantasy to be able to earn money with little or no effort, but there are various ways to create passive income streams that can significantly boost your net worth over time.

Passive income is steady revenue that requires little or no effort to maintain. To get started, you may need to make a financial investment or put in some time. However, once the revenue stream is established, the profits can mount with little additional activity on your part. In some cases, you may be able to just sit back and watch the money come in.

What follows are several ways to earn passive income.

1. Become a landlord

renters
Monkey Business Images / Shutterstock.com

Many people earn passive income by renting out apartments, condos and houses. Of course you’ll need to acquire rental properties first. Be sure to set your rents high enough to provide a profit while covering your maintenance costs. As a landlord, you may need to clean your dwellings and make minor repairs between tenants. For many people, profits far outweigh the demands, however. Strive to find reliable tenants who pay their rent on time and do no damage.

If you want to make money part-time from your existing home, check out Airbnb, VRBO (Vacation Rental By Owner) and Homestay and read: “15 Steps to Profit By Renting Your Home to Visitors.”

2. Sell things you don’t need online

szefei / Shutterstock.com

Shopping can be fun, but many people find that they accumulate too many things over time. A good way to get rid of the clutter is to start selling unneeded books, artwork, sports equipment, toys and clothing online. Whatever it is you no longer need, there likely is someone who wants it. There’s a buyer for almost anything, if the price is right. The Internet provides an easy want to connect with shoppers.

Marketing websites like eBay, Gazelle and Craigslist make the process fairly simple. If you’re not sure what to sell, just look through the items stored in your garage, basement or attic. Instead of donating things to thrift stores, you could be making money by selling items over the Internet. To price your goods competitively, just look at what’s already for sale online.

3. Refinance your mortgage

Couple Getting Mortgage
bernatets photo / Shutterstock.com

If several years have gone by since you last obtained a home loan, consult a mortgage professional to find out if you can reduce your monthly loan payments by refinancing. For example, if your credit rating has improved since your last loan, you may qualify for a lower interest rate. If so, you may be able to lower your monthly payments or reduce the term of your loan. A shorter loan term could enable you to stop making mortgage payments sooner. That would free up your income for other uses or allow you to build up your savings. The home loan market is highly competitive, so be sure to shop around for the best lending terms.

Be sure to check out our mortgage search tool.

4. Take in a roommate

Nikodash / Shutterstock.com

If you have a spare room in your house or apartment, why not put it to use and rent out the space to a roommate? If you carefully screen applicants to find someone who is respectful of your home, this can be an easy way to bring in passive income. Be sure to set some ground rules for things like acceptable hours for watching TV, keeping the kitchen clean, and having guests over. And make sure you factor in added costs for utilities when you price your rent. Collecting the first and last month’s rent in advance will give you some added protection, in case your roommate is slow to pay. If you have valuable items in your home, request a damage deposit, just in case something goes wrong.

5. Switch to an online-only bank

online banking
Rawpixel.com / Shutterstock.com

If you can get used to idea of banking with an institution that’s only accessible online, you can earn greater returns on your savings with an online-only bank account. Unlike traditional brick-and-mortar banks, online-only banks have very low overheads. They don’t have to lease office space, and they can pass the savings on to their customers. Annual percentage yields on savings accounts and certificates of deposit typically are higher for online-only banks. That’s why they’re gaining popularity among people who want to get the most return on their savings. To get the best rates, check out several institutions before making a choice.

Check out: “How to Earn More on Your Savings for the Rest of 2018.”

6. Sell your unwanted stuff at flea markets

Joe Tabacca / Shutterstock.com

You can make extra money if you sell the things you no longer use at flea markets. Aside from displaying your items for potential buyers, this takes very little effort. Appliances in good working order, electronics, and antiques often sell well. All you’ll need, besides merchandise, is a display table and a portable chair to sit on. Before you make your debut as a seller, visit a flea market to learn the ropes. By carefully observing the sellers, you can learn how to price items so they are competitive. Some people actually make a living with this activity. Others find it to be an easy way to make extra cash.

If you are burdened with a lot of stuff, check out: “How to Get Rid of 6 Hard-to-Get-Rid-of Things.”

7. Invest in stocks that pay high dividends

online research
NicoElNino / Shutterstock.com

Savvy investors often buy stocks that pay high dividend yields. A dividend is a payment to shareholders. In theory, dividends reflect profitability. Dividend-paying stocks enable shareholders to make a profit when the company makes money. However, some troubled companies pay high dividends as a means of attracting new investors.

Companies that have unusually high dividends may be in financial trouble, so do your homework. There’s a possibility of experiencing losses if the dividend drops and the stock declines. Consider investing in companies that are part of stable, established industries.

What have you done to generate passive income? Share with us in comments below or on our Facebook page.

Disclosure: The information you read here is always objective. However, we sometimes receive compensation when you click links within our stories.

Read Next
Big-Ticket Things You Should Never Buy
Big-Ticket Things You Should Never Buy

In this week’s podcast: Are you wasting big money on these common purchases?

The 10 Worst Types of Tickets for Your Car Insurance Rate
The 10 Worst Types of Tickets for Your Car Insurance Rate

Some types of traffic violations can drive your car insurance rate more than 25% higher.

New Ways to Save Money on Insurance of Every Kind
New Ways to Save Money on Insurance of Every Kind

Tech startups are making it easy to find the best rates for all kinds of insurance policies.

7 Social Security Blunders That Can Ruin Your Retirement
7 Social Security Blunders That Can Ruin Your Retirement

Making even one of these mistakes can easily cost you tens of thousands of dollars.

12 Ways Retirees Can Earn Passive Income
12 Ways Retirees Can Earn Passive Income

These simple ways of earning income without a lot of active, ongoing effort can stretch your retirement dollars.

View this page without ads

Help us produce more money-saving articles and videos by subscribing to a membership.

Get Started

Most Popular
7 Kirkland Signature Items to Avoid at Costco
7 Kirkland Signature Items to Avoid at Costco

Even if it seems you save a bundle buying Costco’s Kirkland Signature brand products, they may not be the bargain they appear to be.

How to Buy Gas At Costco Without a Membership
How to Buy Gas At Costco Without a Membership

The warehouse club often has some of the cheapest gas in town. Here’s how you can get it as a nonmember.

10 Things to Stop Buying If You Want a Clutter-Free Home
10 Things to Stop Buying If You Want a Clutter-Free Home

If you like to keep things simple, avoid these purchases.

If You Find This Thrift Shopping, Buy It
If You Find This Thrift Shopping, Buy It

Vacuums from this brand can last a half-century, if not longer — and they’re hot on the resale market.

A Simple Way to Silence Robocalls Today
A Simple Way to Silence Robocalls Today

A few steps can keep your phone from ringing when a spammer calls.

This Company Makes the Best Tires in America
This Company Makes the Best Tires in America

Driver satisfaction with tires is at an all-time high, but one brand stands out.

Can I Switch to Spousal Social Security Benefits When My Ex Dies?
Can I Switch to Spousal Social Security Benefits When My Ex Dies?

Knowing when to claim can help you maximize benefits.

36 Things That Will Be Obsolete Soon
36 Things That Will Be Obsolete Soon

The writing is on the wall for dozens of things we have grown up with.

17 Surprising Things You Can Sell for Extra Money
17 Surprising Things You Can Sell for Extra Money

You probably don’t realize these items are worth decent cash.

8 Things You Should Always Buy on Amazon
8 Things You Should Always Buy on Amazon

The giant retailer shines when it comes to these things, from basics to hard-to-find specialty goods.

This Health Issue Can Hint at Dementia Years in Advance
This Health Issue Can Hint at Dementia Years in Advance

One type of pain is especially associated with cognitive decline.

8 Federal Income Tax Breaks for Homeowners
8 Federal Income Tax Breaks for Homeowners

Some of these deductions and credits are available to a wide swath of homeowners.

3 Ways to Get Microsoft Office for Free
3 Ways to Get Microsoft Office for Free

With a little ingenuity, you can cut Office costs to zero.

5 Ways to Get Amazon Prime for Free
5 Ways to Get Amazon Prime for Free

Hesitant to drop $119 a year on an Amazon Prime membership? Here’s how to get it for free.

5 Ways to Fill Your Pantry With Free Food
5 Ways to Fill Your Pantry With Free Food

Anyone can take advantage of these resources.

9 Things You’ll Never See at Costco Again
9 Things You’ll Never See at Costco Again

The warehouse store offers an enormous selection, but these products aren’t coming back.

10 Types of Retirement Income That Are Not Taxable
10 Types of Retirement Income That Are Not Taxable

There are lots of things Uncle Sam can’t touch — so long as you play by the rules.

6 Reasons You Should Stop Hiding Cash at Home
6 Reasons You Should Stop Hiding Cash at Home

Stashing money around the house is anything but harmless.

These 5 States Are the Most Expensive Places to Retire
These 5 States Are the Most Expensive Places to Retire

If you expect to have modest retirement income, you may want to avoid spending your golden years here.

View More Articles

View this page without ads

Help us produce more money-saving articles and videos by subscribing to a membership.

Get Started

Add a Comment

Our Policy: We welcome relevant and respectful comments in order to foster healthy and informative discussions. All other comments may be removed. Comments with links are automatically held for moderation.