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
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
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
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
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
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
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
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.