10 Passive Income Ideas for 2021

Check out our top recommendations for generating passive income in 2021

passive income ideas 2021

Passive income is something that can help you achieve your goals of saving up money for something special or building an empire. It’s worth noting the average millionaire has seven income streams. That doesn't mean they have 7 jobs--most millionaires have figured out other ways to make passive income and went down a different path than "mainstream." Here are some great ideas that don't require you to work full time!

1) Rent a Room on Airbnb

Do you have a rental property or spare room in your house? Why not rent it out for passive rental income. Airbnb is a great way to make money while you're on vacation, or simply have more bedrooms in your house than people. By this point most of us know Airbnb, rent a room to a traveler. What many don’t realize is just how big a business it can be. While renting a room can easily fetch $100 per night in most markets, did you know professional investors rent whole homes and gross well into the six figures per year on properties. Imagine buying a home for half a million dollars and making $100,000 per year in income from it. It happens, and more often than you might imagine.

The key to getting rentals is great photos and strong reviews. Once you have a track record we think hosting on Airbnb is a great way to make an extra $1,000 per month without much more work than installing a keypad on your house and setting aside a bathroom for guests. Get a cleaning service and be sure to charge guests enough to cover the cleaning and you’ve got the makings of a great passive income stream.

2) Rent your Garage or Driveway for Parking, Storage, or Workspace

Airbnb may have started it but self-storage, parking, and workspace platforms like us here at Stache are taking it to the next level. Most of us have a garage and who wouldn’t be willing to park on the street if that garage were worth $10,000 per year. That’s exactly what we’re helping Stache hosts do with their spare garages. You can host on Stache, give the renter a garage opener, and simply collect payment each month directly to your bank account.

Renters tend to be car hobbyists who can’t work from their apartment complex or have a hobby that’s taken over their own home garage. Others need somewhere to park a camper or trailer and finally, some are small business owners needing a workspace.

Pure storage for a typical 2-car garage can net $2,000-$3,000 per year while renting it to a small business owner tends to average $9,000-$12,000 per year for our hosts. This really is passive income and a creative new way to put garage or driveway space to work for you.

3) Rent your Land for Camping

The sharing economy knows no limits. If you were everyone wondering, can I rent my land? The answer is yes. Hipcamp has come along, following Airbnb’s model and applying it to land sharing for camping. This is a great passive income idea as it entails little more than taking some photos, creating a listing, and letting the income flow in. You may need to add a dumpster on-site, or simply stipulate renters must pack out everything they’ve come in with.

We personally have friends renting empty land making over $1,000 per month renting on Hipcamp. So if you’ve ever asked yourself how can I make money off my empty land, this is a great option for those seeking passive income.

4) Rent your car on Turo or Getaround

Have a car and don’t use it every day? If you want to make money off an asset that likely sits in your driveway or garage 90% of the time then you should consider renting it on car-sharing apps like Turo or Getaround. These platforms work just like Airbnb where car owners can rent their vehicle by the day. For those of us focused on passive income, this is a fantastic way to leverage an asset we already own.

Covid 19 didn’t just wreak havoc with your job. Many companies had to adjust on the fly and one such industry is the car rental industry. These companies sold off their fleets of vehicles when the shutdowns occurred and as such, there’s currently a massive shortage of rental cars now in 2021. With the shortage of rental cars available due to Covid rates are through the roof. What used to be a $25 per day car rental is now $100 or more per day.

Some entrepreneurs are renting their vehicles on these platforms and are able to easily command $50 per day per car rental. Rent your car 20 days per month and it’s easy to see how you can make $1,000 per month. What would you do with an extra $12,000 per year? Some entrepreneurs are even building fleets of vehicles and have turned car sharing into a major income stream. We think it’s amongst the best passive income ideas we’ve seen.

5) Drive on Uber or do food delivery with Doordash

Another daily activity you can turn into passive income is driving. If you’re already driving around to run errands, why not pick up a passenger or two? Driving your car with Lyft or Uber will help you make money by taking people where they need to go. With the changes in Covid, both of these companies are eager to find more drivers. Some are offering first-month bonuses as high as $3000 to new drivers to get them to provide rides. Rates for drivers are also up 50% in many parts of the country as the companies charge riders more.

Another similar option for those that enjoy driving is to do food delivery for companies like Doordash. Uber also is in on food delivery with Uber Eats so both options along with many other companies like GoPuff allow you to do food delivery at all hours of the day while you’re already driving around town.

Now the real way to turbocharge this opportunity into a truly passive income stream is to lease cars, and have a fleet of drivers doing the delivery for you. You take a cut, they’re happy because you provided the vehicle. Win-win for everyone involved.

6) Investing in High Dividend Stocks

When it comes time to start working on personal wealth-building strategies, most people usually look at one kind: investing in the stock market. The way this works is straightforward enough - buy financial assets such as stocks with any extra cash lying around so their value gradually increases over time while still earning interest from them (a process called “compounding”).

Several ETFs exist that are designed specifically for this purpose. ETF’s spread the risk by investing in a basket of stocks, with a focus on those with a high dividend yield. Many produce returns of over 5% with some breaking 8% per year in dividend yield. Nerdwallet provides a great list of the top dividend yield ETFs of 2021. Investing in the stock market can be done without a lot of time and effort and can help you maximize your personal financial goals. Start building wealth that allows you to maintain a solid retirement plan and can help you generate passive income for the rest of your life.

7) Invest in Crowdfunded Real Estate

If you are looking for a way to start investing in real estate, Fundrise's Starter Portfolio may be just what you need. With this program, your initial investment of $500 will grow into 12% returns within the first year - and with no management fees or commissions! This is because REITs provide investors like yourself more flexibility than stocks while still offering high potential returns. Performance reports have shown that investments in these types of companies can give an investor as much as 18-20% return on their money after 10 years; imagine how quickly those funds could add up over time!

Another option within crowdfunded real estate platforms is RealtyShares. It has a lot in common with Fundraise, but it requires an investment that runs $5,000 or more. With this platform, you have much greater control over what properties are selected for investing in by choosing individual projects to invest in instead of relying on the performance of their entire portfolio. If either option sounds good to you keep in mind that since they operate as private funds rather than public stocks. The bright side is that amongst passive income ideas this is as easy as it gets.

8) Affiliate Marketing

Affiliate marketing is a way to make money by promoting products online. By becoming an affiliate, you earn commission from the company that sells the product. There are many different ways to get started with this form of marketing. Whether it be through specific companies or commissions platforms like ShareASale or signing up directly as an Amazon Affiliate, signing up on sites allows you to market goods and make a cut of each item sold.

The work is a bit more complicated as you need to create sites that get traffic so you can then have the user share the links. Review sites are a great option as are niche blogs. There’s a bit of up-front work here, but for the motivated, we know of many affiliate marketers making a six-figure income via affiliate commissions in their second year.

9) Create an Online Course

Do you have a skill you want to share with the world, but don't know how? Creating an online course is one way of earning some passive income. As long as people are willing to take your courses, you will continue getting paid for them in perpetuity. People will pay for courses ranging anywhere from DIY home renovation classes to academic teaching to courses on how to make passive income in 2021:) The key here is leveraging an interesting subject, making a video of it, and selling it on platforms like Udemy. Your average realtor may not get TikTok but a typical HS student they don’t know anything else. Teaching basic skills like how to make a great TikTok video might not seem obvious at first, but there may be a market for it. You just need to think creatively.

10) Find the best High Yield Savings account

Saving money is a priority for many people. With so much uncertainty in the economy, it can be hard to know where your savings will do best. Fortunately, online banks like Chime are offering competitive rates on their high-yield savings accounts that make saving easier than ever before!

At a .55% return with no monthly fees from Chime Bank and a 0 minimum opening balance, you're guaranteed free cash flow without any risk of losing money. You have a bank account already, why not put it to work for you with many of the best banks now being fully online - passive income for something you’re already using.

 Tax Considerations for Passive Income

Ever noticed how it's so easy to get started with passive income but struggle to maintain the commitment to building it up. We’re here to say it’s worth it to do everything you can to build up multiple passive income streams. As noted above millionaires average 7 income streams. That’s why we created this list of passive income ideas for 2021.

Passive income is traditionally earned through rental property, limited partnership, or other ways in which an individual does not actively participate. It differs from "active" income because of its lack of involvement. It is typically taxable, although is usually treated differently from active income by the Internal Revenue Service (IRS).  Portfolio interest and dividends are also considered as passive sources of personal wealth and it’s worth knowing your local tax laws around dividend taxation.

You can get creative with the help of a CPA and find that your passive income streams allow you the freedom you’ve always wanted.