31 Smart Passive Income Ideas That Actually Work _ Ways to get money, Smart passive income, How to g

7. PEER-TO-PEER LENDING

INITIAL INVESTMENT: 8/10
RISK: 9/10
TIME: 3/10
MONEY GAIN: 7/10

Peer-to-peer lending (P2P) means loaning money to other people. Specifically, you lend money to people who don’t qualify for traditional financing.

Companies like Lending Club and Prosper offer 6-10% returns, much higher than typical savings accounts.

With P2P, you can select an investment based on your risk assessment strategy. But before you get too excited by the rates on offer, you need to consider that the higher the returns, the bigger is usually the danger of losing your money.

Although companies like Lending Club cherry-pick borrowers according to credit checks, you still need to consider risks before putting your money in.

So always make sure to do your own research!

8. CROWDFUNDED REAL ESTATE

INITIAL INVESTMENT 7/10
RISK: 7/10
TIME: 3/10
MONEY GAIN: 7/10

I love real estate investing, but it requires a lot of upfront capital, plus you need to learn to love your tenants (see point 10 below)!

Crowdfunded real estate investing allows you to still invest in the real estate market without necessarily putting in a lot of money upfront. It’s a much more passive investment than owning rental properties!

When you invest in crowdfunded real estate, you usually fund loans, which are then used to buy and improve real assets, and you get paid for that.

With Crowdfunded real estate investment, you can get returns in the range of 7-10%, similar to peer-to-peer lending, but you have the actual house to back up the investment.

PeerStreet has a minimum investment of $1,000. If you are interested in finding out more, I suggest you sign up for free.

Once you have an account, you can check the potential real estate deals or look through PeerStreet’s portfolio suggestions.

Please remember that this is a new market, and there are still risks, like with any investment strategy.

9. INVEST IN REITS (REAL ESTATE INVESTMENT TRUSTS)

INITIAL INVESTMENT: 7/10
RISK: 7/10
TIME: 3/10
MONEY GAIN: 7/10

Another way to invest in real estate is to invest through a REIT.

A REIT is a company that owns, operates, or finances real estate and allows anyone to invest in portfolios of real estate assets, the same way as stocks: you can purchase individual stock or exchange-traded fund (ETF). You can then earn a share of the income produced through the real estate investment without owning, managing, or financing a property.

A REIT offers capital growth and generally high dividend yields.

Rent Things Out

Taking advantage of things you already have is one of the best ways to make passive income a quick reality.

10. INVEST IN RENTAL PROPERTIES

INITIAL INVESTMENT: 10/10
RISK: 6/10
TIME: 8/10
MONEY GAIN: 7/10

This is one of my favorite ways to generate passive income!

It’s the first one we explored, as we love real estate and the idea of having tangible assets. You will generally need some capital to invest, and you will need to do quite a lot of work upfront to find the right rental property.

Although many people don’t consider rental properties a passive business, it’s more passive than going to the office every day!

We have two rental properties at the moment. Last year we generated over $22,000 net income (after mortgage payments, expenses, and taxes), and all I had to do was inspect the properties three times to make sure the tenants weren’t destroying them! They are actually keeping them in perfect condition, and they are lovely people! Call me lucky.

Every time we buy a rental, we renovate it to high standards to ensure it’s in perfect shape and won’t need much work done for quite a few years. If you want to make it even more passive, you can outsource the property management and maintenance tasks.