Best Passive Income Streams

Best Passive Income Streams

Many of us wish we could earn a little extra cash each month. Whether through a side hustle or gig work, passive income is one of the most sought-after ways of generating extra cash flow. Why? It’s all in the name—it’s passive.

Passive income can provide the cash to cover a few bills each month, to build up your family’s emergency fund, to pay off debt, or to save for a great vacation. The only question is, which passive income stream is the best?

If you’re curious about passive income, keep reading. We’ve got all the details on what passive income is, how it works, and some of the best ways to set yourself up so you can start earning regular passive income.

What is Passive Income?

Many people think passive income is truly passive, as in, you get something for nothing. Unfortunately, that’s not really the case.

Passive income is income you generate without having to work consistently. What that often means is that you commit to some financial or time investment to set up your passive income stream in the beginning, and then it continues to earn you money over time with little to no continued investment on your end.

Almost all passive income streams require you to invest time, money, or skills at the onset. Opportunities that don’t require any of those—that allow you to earn passive income without any work or investment—are extremely rare. Be cautious about any passive income opportunity that feels like a get-rich-quick scheme. If it seems too good to be true, it likely is.

However, there are tons of legitimate ways to earn passive income, utilizing different talents and skills and requiring different time and financial investments. Let’s take a look at some of the best passive income streams you can start right now.

16 of the Best Passive Income Streams to Consider

Keep in mind that this is not an exhaustive list—there are simply more passive income streams available than we can list here. But these are the 16 that we think are the best—because of how little investment they take, their earning potential, and other factors we’ll explore more in-depth below.

16 of the Best Passive Income Streams to Consider

#1: Rent Your Spare Space with Neighbor

Upfront investment: Very low

Earning potential: High

Neighbor is a peer-to-peer platform that connects people who need storage for their belongings or vehicles with people in their neighborhood who have extra space available. If you have spare storage space in your home—a basement, attic, garage, closet, spare room, parking space, or even just some open shelves—you can list it on Neighbor in just minutes and connect with someone who needs a place to store their things.

Neighbor is great because it’s truly passive. You don’t need to invest a lot of time or money upfront. You’re just offering up something you already have and don’t need: Space in your home. Plus, Neighbor makes it safe and secure to store your neighbors’ belongings, with a $1,000,000 free coverage plan, automatic deposits for your earnings, and responsive support teams should you need help. You get to choose when and how renters can access your space, and you have the final say over what they can store there.

Once you list your space and connect with a renter, all you have to do is schedule a move-in day and start collecting your monthly earnings. It’s really that easy to earn passive income with Neighbor.

Rent Your Spare Space with Neighbor

Create an Online Course

Create an Online Course

Upfront investment: High

Earning potential: High

If you have a skill that you can teach to others, consider creating an online course. There are a number of online platforms that you can use to distribute or sell your course; some of the most popular ones are SkillShare, Coursera, and Udemy.

There are a few challenges to earning passive income this way: Creating a course requires you to have expert-level experience in what you’re teaching, and if other people don’t know about your skills and experience, they may not be interested in paying for a course from you. Many people use a “freemium” model, meaning they offer some content for free to establish a following, and then charge for a more in-depth course.

The other downside is that creating a course takes a lot of time and hard work.

Share Your Car on Turo

Share Your Car on Turo

Upfront investment: Low, if you already own a car. High, if you plan to buy a car and cover the costs by renting it out.

Earning potential: Very high

If you own a car but you don’t need to use it all the time, you can list it for others to rent using a platform like Turo. Turo makes it easy for regular people to start car-sharing businesses, and even gives you the opportunity to choose whether you’d like to receive your earnings in cash, or reinvest them back into your business.

Turo also takes care of all the potentially messy parts of this type of business, like providing insurance for drivers when they rent your car.

write an ebook

Write an Ebook

Upfront investment: High

Earning potential: Medium

If you’re an expert on a topic—even a niche one—writing an ebook can be a great way to generate a passive income stream that keeps bringing in extra cash long into the future. Ebooks don’t have to be as long as a traditional book—depending on the topic, 30 pages can sometimes be plenty. And platforms like Amazon have made it easy to self-publish a book and get it in front of millions of potential buyers.

There are some risks involved in writing an ebook, though. Unless you already have a following, you’ll have to market the book and establish your authority as an expert in the topic, which can be difficult to do online. Writing the book will also take significant time, and most ebooks only sell for a few dollars at most, meaning this may not be the most lucrative of passive income streams.

List Your Bike for Rent on Spinlister

List Your Bike for Rent on Spinlister

Upfront investment: Low

Earning potential: Medium

Spinlister helps connect cyclists with trusted bike owners, wherever they are in the world. If you have a bicycle that you don’t use every day, you can list it for active people to rent by the day. Spinlister makes it easy to connect, receive payment, and schedule a pickup time through their website or app, and also provides insurance to keep both cyclists and bike owners safe.

A great thing about Spinlister is that in addition to listing your bike, you can offer up a surfboard, snowboard, skis, or standup paddleboard to renters, if you have any of those. Spinlister says some users earn up to $500 a month.

Invest in Rental Properties

Invest in Rental Properties

Upfront investment: Very high

Earning potential: Very high

Property is one of the most tried-and-true ways to build wealth, though many people underestimate how much work it can be to own a rental property. Considering how both property values and rental prices have soared in recent years, this may seem like an investment with a clear path to big returns. But owning rental properties can come with huge unexpected expenses, and rental markets are constantly shifting, meaning your investment may not be as guaranteed to pay off as you think. Is there opportunity for a huge amount of passive income? Yes, but it’s not guaranteed, and you will have to work hard for it.

Another option: Real estate investment trusts, or REITs. REITs are companies that own and manage real estate, and you can buy and sell shares in them on the stock market. You earn regular dividends, and many high-quality REITs have a proven record of increasing their dividends each year. REITs can be a great way to take advantage of the value of property, while reducing your risk and upfront investment.

Rent Out a Parking Space on Curb Flip

Rent Out a Parking Space on Curb Flip

Upfront investment: Very low

Earning potential: Depends on where you live

Do you have a driveway or other dedicated parking spot that you only use some of the time—or not at all? Curb Flip makes it easy to rent out that space to drivers who need parking, especially if you live in a big city or near a popular destination.

Curb Flip has tens of thousands of drivers who check its listings each day, and it’s free to list your parking space on the site (which just charges a 5 percent transaction fee each time your space gets rented).

The only downside to Curbflip (and similar parking space rental apps) is that unless you live in a major city or near a popular tourist destination or event venue, demand for your parking space may not be high all the time.

Sell Your Digital Photos Online

Sell Your Digital Photos Online

Upfront investment: Low

Earning potential: Low

Are you a photographer? If so, you can list photos you’ve already taken for sale on stock photography sites like Shutterstock, Alamy, and Getty Images. These types of platforms allow you to sell use licenses for your photos, which means the same photo can generate income over and over.

The downside to earning passive income this way is that many photos on stock photography sites simply never get used. You might find that out of hundreds of photos you add to the site, the majority of your revenue comes from just a handful of them. It can take a lot of time and effort to look for those “needle in a haystack” photos that will generate consistent sales.

Sell Your Designs as Products

Sell Your Designs as Products

Upfront investment: Low

Earning potential: Low

Similarly, if you work as a graphic designer, illustrator, or another kind of visual artist, you may be able to turn your art into products like posters, clothing, mugs, journal covers, tote bags, and more. Sites like Zazzle, Redbubble, and CafePress allow artists to list their work, which customers can then buy on a number of products. This is convenient for artists, because the site makes all the upfront investment in merchandise and printing, which can be expensive.

The downside is that the artist’s cut from these types of products tends to be fairly low. However, if you can find a type of art that resonates with a group of people (like a fanbase for a movie, show, or book that the art is based on), you might be able to generate consistent enough sales to earn a small passive income.

Rent Out Your Boat with Boatsetter

Rent Out Your Boat with Boatsetter

Upfront investment: High

Earning potential: High

Boats are well known for being expensive—both to buy, and to maintain. Boatsetter is here to help with that, connecting customers who want to rent or charter a boat with boat owners and captains available for rent.

Captain Tyler Brady, from Afellowfisherman.com, shared his experience using Boatsetter to expand his charter fishing business.

“During the months of May to September, I will pick up anywhere from three to eight gigs per month through just Boatsetter,” he said. “The extra income I’ve earned through Boatsetter mostly goes toward boat slip fees, boat maintenance and buying new equipment such as rods, reels, trolling motors, and other miscellaneous expenses associated with owning a boat. The extra gigs essentially subsidize the costs of owning a boat.”

In other words, if you want a boat but are worried about the cost, a platform like Boatsetter can help offset your expenses. The only downside to that is, if you’re looking for extra cash to spend on other things, Boatsetter may not be the best platform for you.

Fund a Peer-to-Peer Loan

Fund a Peer-to-Peer Loan

Upfront investment: Up to you. You can choose to fund loans in small amounts or large ones.

Earning potential: It depends on how many loans you fund, their interest rates, and whether they get paid back. This is a riskier (though potentially more personally rewarding) passive income stream.

Peer-to-peer lending means you offer a personal loan to a borrower. Multiple platforms exist online to help facilitate peer-to-peer loans, including Payoff, Prosper, LendingClub, and Funding Circle.

As a lender, you can earn passive income in the form of interest paid on any loans you make. There are some risks involved, though. A borrower can always default on your loan, which would leave you with nothing. That’s why there’s a learning curve to peer-to-peer lending—you have to be able to carefully analyze potential borrowers to minimize your risk of losing your investment, and you should invest in a number of loans to diversify your lending portfolio.

Of course, the added benefit of a platform like this is knowing that your money is making an impact. Peer-to-peer loans can help lift other families out of hardship, fund education, and start small businesses.

List Your RV on Outdoorsy

List Your RV on Outdoorsy

Upfront investment: Low, if you already own your RV. High if you plan to buy an RV and offset the cost by renting it out.

Earning potential: Very high

If you own an RV, camper van, or trailer, odds are it helps you and your family create a ton of fun memories—and sits empty in your driveway or a parking space for months at a time when you aren’t able to use it.

Thanks to Outdoorsy, RV owners can turn those vacation-less months into passive income by renting their RVs out to others. Outdoorsy helps connect you with people looking for an RV, facilitates the payments, and provides liability insurance to keep everyone safe and secure. Some RV owners can earn up to $50,000 a year—enough to pay for an entire RV.

Build an App

Build an App

Upfront investment: Medium

Earning potential: Medium

If you have the skills and experience required to create an app from scratch, this passive income stream is a no-brainer—provided you have an idea for an app with high enough demand that users will pay for it.

But you don’t have to be a software developer to create an app anymore. With no-code platforms like Glide, users can create custom apps using spreadsheets and a drag-and-drop design interface. Then, you can list your apps for sale on the site’s template library, generating passive income from other users.

Rent Out Your Tools on Garage101

Rent Out Your Tools on Garage101

Upfront investment: Very low, provided you already own the tools.

Earning potential: Low to medium, depending on where you live.

Any amateur handyman knows how easy it is to amass a garage full of tools you only use once in a while. That’s where Garage101 comes in, connecting you with people who need to borrow or rent a tool by the hour or by the day, for a specific project or job.

Carla Diaz, co-founder of Broadband Search, told us about how she’s been able to honor her late father’s memory by sharing his tools on Garage101.

“It surprised me to know that services like Garage101 can let people rent their tools out to those who might just need something for a quick fix or for something more long term,” she said. “This has been a huge help for me since I now work from home and can easily be available for people who come by to pick the tools. It’s passive income I earn from the tools my father left for me, which can help others and put them to good use instead of just sitting in the garage.”

Turn Your Car Into Ad Space

Turn Your Car Into Ad Space

Upfront investment: Very low, if you already own a suitable car

Earning potential: Medium

We’re all used to seeing billboards while we’re driving—usually on the side of the road. But what about on your car itself? If you spend a lot of time driving, an ad agency may be willing to pay you for advertising space on your car.

You’ll need to find a legitimate specialty ad agency to work with (and be careful with this; there are a lot of scammers offering this type of deal). They’ll evaluate your driving habits, like how much time you spend on the road each day and what areas you tend to drive in. Then, if you’re a match for one of their clients, they’ll wrap your car in ads at no cost to you.

Agencies will typically favor newer, nicer cars for this, and they’ll want you to have a sparkling clean driving record. And keep in mind that advertisers will prefer drivers in larger cities, not small towns where few people will see their moving advertisement.

Hipcamp

Hipcamp

Upfront investment: Low, if you already have property in an area close to outdoor recreation

Earning potential: Low to medium, depending on your location

Hipcamp connects outdoor enthusiasts with tent camping sites, RV parks, cabins, treehouses, glamping experiences—pretty much any sort of outdoor stay they might want to have.

What makes it a good passive income stream is that, if you own land or a cabin, you can list it on Hipcamp for people to camp on. Whether you can offer tent space, a treehouse, a glamping set up, or your vacation home, if it’s in a scenic locale with good outdoor recreation, you can list it on Hipcamp.

The downside to this passive income stream is that how in-demand your home or land will be depends heavily on your location, and not many people have land in the sought-after outdoor recreation areas that get the most bookings.

Ready to Start Earning Passive Income This Month?

Of all these potential passive income streams, there’s only one that you can set up in minutes and start earning extra cash this month: Neighbor. Ready to start earning truly passive income? List your extra space on Neighbor today.