Photo Credit: Stuart Miles
Passive income.
Desired by everyone, achieved by few.
When I first started blogging I had this preconceived notion that what I was doing was going to eventually be a form of passive income. Boy was I wrong!
Since then I have performed tons of research on ways to actually generate passive income. What I discovered is that to earn significant passive income you need to put a lot of money or time upfront. Most of what bloggers talk about are online passive income ideas. But what about ways to make money that aren’t on the web. Here are five offline passive income ideas
Invest in the Stock Market
When you invest in the stock market your goal is to have your money work for you. To earn a significant amount of passive income you have to first have a significant amount of money to put in the stock market. You also have to choose smart investments and ride the waves.
Investing in the stock market long term is a form of truly passive income but it comes with its own sets of risks.
To get started you can invest in individual stocks, dividend stocks, mutual funds, exchange trade funds, and more. Be sure to educate yourself and seek the help of a professional if needed.
Own Vending Machines
One of my favorite offline passive income ideas is owning vending machines. I know someone who owns vending machines and makes good money doing it.
To go forward with this idea you would first have to find vending machines to purchase. The guy I know who is in this business finds his vending machines on Craigslist and sometimes drives hundreds of miles to go pick them up.
You’d be responsible for stocking the vending machine, collecting the money, and issuing refunds if your machine took someone’s money. Or, you could outsource this part and make your vending machines a truly passive source of income.
Rent Tools
You could pretty much rent anything to create passive income. But, at least around here, renting tools seems to be a pretty popular business model.
Think about it – what do do-it-yourselfers often need but are unwilling to spend big money on? Tools.
If you have a collection of popular tools you could rent them out. The only work you’d have to do is handing out the tools and collecting the money.
The downside, though, is that your tools do take the chance of being damaged since they are in someone else’s hands.
Own Rental Properties
Offline passive income ideas usually involve real estate. I have presented this as a form of passive income before and others didn’t quite agree that owning rental properties is passive – but I think it can be.
If you can buy rental properties at a good price you can then hire a management company to find and deal with tenants, repairs, and rent collection. This way you’re hands off in the process.
To do this you need to find properties that bring in a good amount of cash flow and find a management company that doesn’t eat up all of that cash flow.
Rent a Room
If you have a spare room in your house you could rent it as a form of passive income. It would be even better, in my opinion, to have a basement apartment.
If you know any friends or family looking for a temporary place to stay and you don’t mind their company, then renting a room in your home could be a great option.
Creating Passive Income
Creating passive income is going to take some time or money upfront to get started with. Luckily, there are several ways in which you can earn passive income. Explore the ideas and pick the one that best suits you.
Finally, if you are interested in building up your passive income streams one thing to do is find a supportive community of people who are willing to help you. I recently came across the saving advice forums, which has a pretty good group of people who are into passive income. Sign up is free. Check it out here.
I’d have to agree with the argument of others in, that owning rental property is anything but passive. Having owned three rental properties for the last 10 years, adding along the way, managing property is anything but passive. True, you could hire a a management company, but then you pretty much eat up your passive income to have a dribble of income. I’d rather work for my money. They are lucky periods when you don’t have to do anything for months, but there are also times when everything seems to break at once!
We also have a vacation property on the Oregon coast that is managed by a rental company, but in order to drive occupancy up, you can’t sit and do nothing. It takes work to earn money that way.
Lastly, the best passive income I’ve seen is actually by owning a post office. My family owns a post office (I own a quarter of it) and it makes $5200 a month (I therefore get $1300 a month), and it is truly passive. Aside from filing income tax, the only other responsibility is if something happens to the roof or siding, all other repairs have to be taken care of by the USPS. Not a bad deal and definitely passive, but you need a chunk of money to make that passive income!
It sounds like you have experience when it comes to rental properties so I’ll take your word on that. Where I live though, you could buy a foreclosure that is decent enough to rent out with minimal repairs for about $30k. With property taxes and insurance you’re probably looking at a payment around $300 total (assuming a 30 year mortgage is taken out on the property.) You could then rent the home for around $600/month. If a property management company took a 10 percent cut you’d still net around $240 a month passively. This is all in theory though as I’m sure many things can (and would) go wrong.
As for the post office that is an amazing idea. That is one idea I’ve never come across. How does that work? Do you lease a building to the postal service?