How to start a passive income business
Passive income has become a huge buzzword in personal finance, with influencers and internet marketers eager to sell their idea of how you can make easy money. But what is it really?
The idea behind passive income is an irresistible one – build your earnings without putting in ongoing labour. Traditionally, that’s meant things like the interest from investments or rent from property you let out.
Increasingly, personal finance bloggers and YouTubers are also using the term to refer to earnings from online content such as affiliate marketing, ads on your YouTube channel or podcast, or selling products like courses or books.
It may not be strictly passive – you’ve still got to put in the work to generate content – but unlike a salaried job, there’s no limit on your earnings if sales take off, and your content can keep bringing in income long after you’ve finished work on it.
And while, traditionally, earning passive income requires a lot of capital to invest in stocks or property, there are now a growing number of ways to begin building an income stream with very little cash. Thanks to some expert suggestions, we’re taking a look at four ways to get started.
Rent out your car
About three-quarters of British households own at least one car, but it’s an asset worth thousands of pounds that spends 23 hours a day parked, on average. That’s the idea behind companies like Hiyacar, which allow you to rent out your vehicle when you’re not using it.
“Hiyacar is about taking an under-utilised asset and sharing it, so someone gets true use out of it,” Sarah Kilmartin, the company’s chief marketing officer, told the Evening Standard. “We have some members earning over £1,000 a month by renting out their car.”
Sell a skill
The skills you’ve built up in your day job or in a passion project on the side could be worth good money to others who want to learn. Music producer Graham Cochrane told CNBC that he started a blog and YouTube channel to attract clients to his production business, but it ended up being a money-spinner in itself through adverts running alongside his content.
That inspired him to create an online course to share his knowledge of audio mixing and recording. He said it provided a passive income stream “that allowed me to make far more money in a day – while putting in less time – than I did working as a freelancer”.
Share your parking space
If you live in a big city, near an airport or a train station, the little strip of real estate in front of your house might be more valuable that you think. MoneySavingExpert reckons that some people can make £200 a month from sites such as Just Park, ParkLet, Your Parking Space or Park On My Drive.
Beware though: some councils have been arguing that renting out your parking space is a change of use that requires planning permission. The government says that’s wrong and has published guidance to that effect, but don’t be too surprised if you have to argue the point with your local planning office.
Put your spare room to use
You might not be able to put a deposit down for the first flat in your buy-to-let empire right now, but you can start earning from property if you have a spare room. You could rent out to a long-term lodger using sites such as Spare Room, or dip your toes in the water with short lets on AirBnB.
The average AirBnB host makes £3,100 a year, Good Housekeeping says, but you’ll need to tell your mortgage provider and insurer. The good news is, you can earn £7,500 a year renting a furnished room in your main property without paying extra tax.