Passive income: What is it?
The best way to describe passive income is “residual income”. Something that provides income to you daily, weekly, monthly, or annually. Most people have the misconception that passive income means “No Work” that is just not true. Everything requires work somethings more than other. The nice thing about passive income though is you can work when you want and how want.
Passive income usually requires at least 1 or all of the following Time, Money, and Risk.
At the top of my list and what I am primarily focusing on to provide my passive income and help me reach financial freedom is Real Estate.
1- Real Estate (Airbnb, Long Term Rentals, Crowdfunding):
There are a lot of different types of strategies when it comes to real estate investing (Check out my real estate guides). I have listed three though below that can provide some great passive income.
Crowdfunding: This is probably the most passive and most affordable option. There is a great company called Fundrise that allows you to invest in real estate projects and investments for as little as $1,000. You also see on average 8-12% in annual returns.
Long Term Rentals: Buying a Single family home, duplex, etc. to rent out is a great way to build passive income. It does take some time if you are self managing them (handle repairs, collect rent, etc.) There are a lot of different ways you are making passive income from a long term rental.
- Monthly rent you are collecting
- Paying down the principle of the loan
- Tax benefits and deductions
- Possible appreciation
Vacation Rental: Vacation Rentals are a lot like long term rental as far as benefits come. Some of the differences are high monthly income from rents, you can rent out the whole house or just a room in your home. Once of the cons is this is probably the most time consuming if you are self managing the property. Since you will more turnover each month from people checking in and out. This will require time arrange bookings, taking calls, and scheduling cleanings and repairs.
2-Blogging:
Blogging can be a great way to start getting passive income. It does take sometime and work up front to get that passive income, but once you do it is great.
I have written two posts to help you get started with blogging:
How to make money blogging
3-Start a online course:
Do you have a skill or talent? Do you know how to play the guitar, are you a good cook or baker, are you an expert in a software or program (excel, Lightroom, video editing, etc). You should consider creating a online course teaching people your skill.
Example: Maybe you are really good at decorating cakes. You create a course on cake decorating.
There are some great resources out that allow you to sell your course.
Bonus Turo:
With Turo, you can now rent out your car to others on an hourly or daily basis. Insurance is included, drivers are screened, and to get up and running it is free.
My buddy has seen so much success that he has 2-3 cars on Turo and is make $400-800 a month per car (depending on the car and the month). Again there is some work involved he has to drop off and pick up the car, as well as get it cleaned after each booking.
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