Personally, I love rental properties and wish I had ten of them right now. Our rental is fully paid for, its value has already gone up considerably since 2015, we get our rent on time every month, and we do absolutely nothing! In my opinion, rentals are one of the best forms of passive income ever!
But, many of you don’t share my enthusiasm when it comes to rental properties. You can’t stand dealing with people, you hate making multiple repairs a year, you’re no good at running background checks and finding good tenants, and you’ve probably had 101+ other bad experiences when you tried to make a buck in rental properties back in the day.
You simply don’t. want. to mess. with rental properties. any. more.
So let’s look at some other fantastic ways to earn a passive income without rental properties.
The options below contain affiliate links.
1) Invest for Dividend Returns
If you’re looking for passive income where you literally have to do nothing for your money, then look no further than dividends. As defined by CNN Money, a dividend is:
“…a payout that some companies make to shareholders that reflects the companies’ earnings. Dividends are often paid quarterly and are paid out regardless of the movement in stock price.”
How much does a good company pay out in dividends? Well, as with many questions like this, the answers vary, but I’ve found that some of the larger more established companies pay out dividends of 4% or more.
My favorite investment firm, Motif Investing, has a motif created by professionals of all the large dividend paying companies. Check it out below. Many of the companies are performing well AND they’re paying out a 3-4% dividend! That’s a pretty sweet deal.
Want to check out motifs for yourself? Here’s the step-by-step sign-up instructions that I created myself. If you don’t need the instructions, just click the banner below.
2) Invest in REITs
Since I invest in tangible real estate properties, I actually don’t know a ton about REITs, but I can tell you the basics.
REIT stands for Real Estate Investment Trusts, and these are companies that either own or finance income-producing real estate. So essentially, by investing in a REIT you’re investing in the success of the real estate companies. As the real estate market rises and falls, so typically do the REITs.
If you want to earn a passive income without rental properties of your own, but you still think that real estate is a great investment, then this is probably where you want to hang one of your investment hats.
Not sure which REITs to pick? According to The Motley Fool, here are the top 5 picks in 2017. Want to learn more? check out their page by clicking on the table.
3) Start Your Own Business
Want to know how to create a passive income without rental properties? Start a business and don’t even think about making it passive for a couple of years.
What you want to do first is build up your business…with a vengeance. Work your butt off and don’t take breaks unless you’re either starving for food or falling over from sleep deprivation. You need to develop a large customer base and a steady traffic of cash. And THEN you can start to think about making it passive.
Passive income isn’t found only in the stock market or real estate. You can make any business passive. All it takes is a proven system.
Here’s an example.
Let’s say you start a lawn mowing business. In the first year, you’re able to secure 25 clients and earn $2,000 a month. Not too shabby, but still not a booming business with a large, loyal customer base that you’d hoped for.
The next year though, you figure it out. You’ve increased your client base to 100 customers, and $8,000 a month.
You landed and kept all these customers by figuring out:
- how to market your business to win the customers
- how to deliver a quality service and keep your clients happy
- the needs of your employees and keeping turn-over low
- (and most importantly) the proven process for every stage of your business
If you know exactly how your business operates and what it takes to win, then you can effectively write out processes for what should be done each day, each week, each month, and each season. With processes you can systematize, and with a system you can start removing yourself from the equation. Meaning, your business can now become passive.
4) Sell Your Photography on the Web
Do you love to take photos? Are you good at it? Then this form of passive income could definitely be for you. And, it’s really not that complicated.
First, learn what types of pictures are in high demand.
Second, take many different shots of those in-demand photos.
Third, load them onto the top photo-selling sites.
Then, sit back and watch the money roll in! 😉
Alright, alright. Easy for me to say. I’ve never done it. BUT, Angie from “The Work At Home Wife” definitely has and knows exactly what she’s talking about. Check out her all-inclusive post here:
5) Buy a Website
Another great way to earn a passive income without rental properties is by purchasing a website.
Many of us don’t have the money to just go out and buy a million dollar business. But quite a few of us DO have the capital to buy a website or two at just a few hundred bucks a piece.
Quite a few people start websites with outlandish dreams at immediate riches. Instead, they discover incomes of just $100 a month and look to sell their “property”. The going rate for blogs is 2x the yearly earnings, so you could snatch up this blog for $2,400 or less and earn a nice passive paycheck of $100 a month. That’s a yearly return of 50% on your investment. Not too shabby!
Interested in this idea? Want to know where to find websites for sale? Check out Flippa.com. They’re the top space for buying and selling websites. Either that, or you can try to make some connections in the blogging world – try to hunt down a blogger in your field of interest and have them reach out to their circle of friends to see if anyone is looking to sell. It may work or it may not, but it leaves you with a much higher probability of finding a deal!
6) Write an Online Course
Many passive income advisors would suggest writing an eBook here. Not me. Been there done that, won the $0 returns. The market is much too saturated and the buyers are few and far between. Don’t go the eBook route.
What I have seen that has been successful however, is online courses. If you are an expert in a subject that people are interested in AND have a need for, then an online course should probably be in your future.
As an example, Michelle Shroeder-Gardner has done an incredible job earning money via affiliate marketing on her blog – earning over $50,000 a month. She had TONS of people asking her how she did it, and (of course) how they could do it to. So, she developed an online course called, “Making Sense of Affiliate Marketing“. She now earns another $30k+ on top of the $50k she was used to. Crazy huh??
To build the online course, you’ll need to have a website. Start one for just $24 by clicking the banner below and following this step-by-step tutorial.
7) Build a Social Media Empire
We’ve all heard of those people making six-figure incomes through YouTube and Twitter, but is it real? Turns out….yes, but highly unlikely. I wouldn’t hang your hat on this option, but if you are already a Twitter or YouTube master and have thousands of fans, then it’s probably time to monetize your pages.
According to Business Insider, a following of 1 million subscribers on your YouTube could earn you between $100k-$300k per year, minus any expenses and taxes. If you’re interested in a per-view payment, 1,000 views on your video will earn you roughly $8.
So, if you’ve already got a booming YouTube channel, just allow ads on your videos and start earning some cash.
Twitter is another viable option for earning a passive income.
Do you have 100,000 or more followers? You could be earning $75-$150 for a tweet that takes only seconds to create. Want it to be 100% passive? Pay someone else to manage your account for a small percentage of the profits. Simple simple.
According to Money Crashers, all you have to do is start your Sponsored Tweets account, set up your payment terms, and then wait for companies to reach out to you through via your account. It’s pretty easy once you have your fan base in place.
8 ) Become an Angel Investor
Do you have a lot of cash, but would still like to earn a passive income without rental properties? Maybe you’d like to become an angel investor!
Angel investors (also known as venture capitalists) are people of great wealth that want to help others succeed in their business ventures. They listen to many different pitches, choose the one that they believe has the best chance for success, and then provide the interest-bearing loan to the entrepreneur to make it happen (either that, or they buy a large portion of the company to share in the profits – think Shark Tank).
If you want to get started as an angel investor, it’s not as tough as you might think. Just Google ‘angel investing’ or ‘venture capitalist’ and your area to find a branch near you.
Earn Your Passive Income
You want passive income? There’s eight solid ideas to choose from above.
If you have money but no time, your best bet for passive income is to:
- Invest in dividend-producing stocks
- Invest in REITs
- Buy websites
- Become an angel investor
If you have time, but very little money, your best bet for passive income is to:
- Start your own business
- Sell your photography online
- Write an online course
- Build a social media empire
Young, old; poor, rich; white, black; male, female; it doesn’t matter. ANYONE can earn a passive income! How will you start earning yours??
My name is Derek, and I have my Bachelors Degree in Finance from Grand Valley State University. After graduation, I was not able to find a job that fully utilized my degree, but I still had a passion for Finance! So, I decided to focus my passion in the stock market. I studied Cash Flows, Balance Sheets, and Income Statements, put some money into the market and saw a good return on my investment. As satisfying as this was, I still felt that something was missing. I have a passion for Finance, but I also have a passion for people. If you have a willingness to learn, I will continue to teach.