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14 Passive Income Ideas in the UK in 2020

May 11, 2020 | Passive Income

We have all heard the term passive income. I’m guessing you have, otherwise you wouldn’t have found this post, but for those not 100% sure I will but a brief explanation at the very foot of this post.

Most of the time any barrier to enter the passive market genre won’t be ‘if I should’ it’s ‘when should I’ and more importantly ‘by doing what’. The purpose of this post is you give you some of the best passive income ideas in the UK for 2020.

The idea of making a passive income sounds almost too good to be true. Being able to make money whilst sunbathing, shopping, playing golf, spending time with family, sitting on a beach in the Bahamas – and even whilst you sleep.

Being able to earn a passive income always feels a little like a dream, far out of reach. It’s actually quite easy to bring in a small amount of passive income each month, and many of us do – or at least have in the past – without even realising it.

If you have ever been paid interest by your bank, this is form of passive income. Your money is working for you. That being said with the ridiculously low interest rates being offered by high street banks at the moment you’ll be quite forgiven for not noticing. 1% interest rate per annum isn’t the lottery win we all hope for.

If you held £1,000 in a bank account, you’ll be paid £10 per year by the banks in interest, which is around 83p per month. No wonder you hadn’t noticed!

The purpose of this post though is not to rant at the bank interest rates but provide you with a number of ways you could earn a passive income in the UK this year. Individually each option may not yield life changing sums, but collectively applying a handful of the options below you may find a nice monthly return.

Here are some passive income ideas for the UK, without touching on examples only possible overseas, and some inspiration for you to consider:

 

 

1. Rent out a room or property through Airbnb

 

Monthly realistic earning potential: £800+ per month;
Initial Outlay: Low;
Time invested: Low;

 

If you have a second bedroom all made up and ready to go, or perhaps a second property you are planning on renting out longer term, you could find renting your accommodation space on Airbnb could be a great way of earning some extra passive income.

Renting through Airbnb is pretty straight forward. Modest private rooms can expect around £30-£40 rental income or up to £80-£100 in prime areas such as London. If though you have a second flat or apartment you could easily be charging £150-£200 per night.

 

Where to Start:

 

 

 

2. Invest in Stocks and Shares

 

Monthly realistic earning potential: £20-£50 per month;
Initial Outlay: Medium;
Time Invested: Low;

 

Dabbling in stocks and shares isn’t for the faint-hearted among us. That being said there are many solid companies, in solid industries, that may not make us rich overnight, but could yield much better returns than being offered by the banks at the moment.

The benefit of a stocks and shares holding is the potential to earn dividend payments. Consider these your ‘company bonus’ for holding stocks and shares. Dividends are usually paid based on your holding of shares in the company.

Hold your stocks and shares in a Stocks and Shares ISA and this becomes a tax free way to save and earn up to the value of £20,000

Where to Start:

 

 

 

3. Write a Blog or eBook

 

Monthly realistic earning potential: £200-£500 per month;
Initial Outlay: Low;
Time Invested: High;

 

Writing a blog or an ebook is often considered to be not only the cheapest way to build an asset to earn a passive income, but also quite a fun way!

Your blog can be about anything you like, but of course the purpose is to earn money so it needs to be a subject you can monetise. You can start very low cost by buying a domain name and building a WordPress website. This can be done for an outlay as cheap as just £50 per year.

If though your passion is book writing, there’s no end of possibilities of being able to sell your book in electronic format (also know as an ebook). You could sell your book through an online ebook shop such as the Amazon Kindle Store or go solo and set up your own website selling your own ebook.

 

Where to Start:

 

 

 

4. Become an Audible Narrator

 

Monthly realistic earning potential: £200;
Initial Outlay: Low;
Time Invested: High;

 

It’s possible to create a passive income, and create an asset, just by using the power of your own voice. Narrators are in heavy demand at the moment due to the number of ebooks, courses and online adverts and video presentations.

Often these jobs would be classed as freelance but there is one main exception. You could become a narrator for Amazon Kindle books and enter into a royalty share agreement rather than a fixed one-time payment from the author or publisher. You could record the audio version of a book over the next week or two and be earning from that recording five or more years from now.

The books you narrate under this type of agreement, the higher the possibility for a good monthly return.

 

 Where to Start:

 

 

 

5. Buy to Let Investment

 

Monthly realistic earning potential: £500+ per month;
Initial Outlay: High;
Time invested: Medium;

 

This suggestion requires quite a high outlay, but the rewards can be just as exceptional. The property market is growing and growing year on year and has done so since 2007.

As a result, the demand for houses for first time buyers has never been higher, but often this market is already outpriced from the first rung on to the property ladder. Without being able to purchase their first home the alternative is to rent whilst they save.

If you have money saved away and want to not only create a passive income but also take advantage of the continued increase in house property, increasing the value of your investment, this could be a very lucrative journey.

Where to start:

 

 

 

6. Sell your photographs

 

Monthly realistic earning potential: £20+ per month;
Initial Outlay: Low;
Time invested: Medium;

 

If having a sophisticated camera in your back pocket or bag, by way of mobile phone, has turned you in to an amateur photographer you may try your hand at selling your photographs. It’s not just pretty landscape and mountain scenery photos that sell, but sometimes right time right place helps as well as being topical.

A recent amateur photographer posted that her photograph of an over-spilling bin in an alley sold more than amazing sunset photo across the Rocky Mountains.

Initially it sounds a bit crazy, but with many local and national newspapers across the world writing about the affects of rubbish disposal, and health of residents through waste management, a photo of an over-spilling bin is a good visual representation of the point of the content.

If you have photos you wish to sell you simply need a place to sell them. There are various marketplaces – unsurprisingly – that allow you to do just that.

You won’t get rich as earnings can be notoriously low but it’s completely passive and any income is still an income

 

Where to start:

 

 

 

7. Become a Social Media Influencer

 

Monthly realistic earning potential: £100+ per month;
Initial Outlay: Low;
Time invested: High;

 

There’s a distinct cross-over now between celebrities and those know called ‘social media celebrity’. In fact, some of the social media celebrities have become more famous and well known than their TV counterparts.

Considering the time many of us spend online on websites such as YouTube, Facebook etc… it’s no wonder patterns are shifting.

Some social media stars have millions of followers, and a simple video can generate 2-5 million views or more. This is huge. Having such a large audience of course has its benefits. Companies are paying high amounts for their products to be worn, and their services promoted by, big social media stars.

Some are earning millions of pounds every year from sponsors on YouTube. This excludes the money YouTube will pay for adverts to be shown on your videos – which on average is around £1,000-£2,000 per million views, but this can be considerably higher.

YouTube like all platforms to make money isn’t easy, but if you feel you have an infectious personality and or could create videos people would want to watch, it may be just for you.

It’s also a very low-cost way of creating a passive income as videos made and posted today could still be earning a revenue seven years or more from now.

 

Where to start:

 

 

 

8. Rent your driveway

 

Monthly realistic earning potential: £50+ per month;
Initial Outlay: Low;
Time invested: Low;

 

With the number of cars on the road increasing it’s resulting in a problem for car drivers.

The cost of parking in dense towns and cities is now very expensive with councils taking full advantage of the demand – and with garages in London selling for in excess of £100,000 (!) – it highlights the value of having a parking space.

If you have a home with parking facilities, and your town is quite populated and has a number of over-priced car parks, you may find you can rent out your parking space online.

It’s really simple to do through online marketplaces such as Just Park and Your Parking Space. Just take some photos of your space, create a listing, set a price and voila.

You’ll pay your chosen marketplace a commission, but you don’t often have to do anything. The person who books the space is told – after making a booking – of your location and how to find your parking space. They turn up, park their car and go about their business. They pick up their car and drive away. You don’t need to even communicate with your booker. You just get paid into your bank account for every booking.

The amount you could earn is of course dependent on the demand in your location, but it’s worth a little research to see whether your unused parking space could earn you a nice passive income

 

Where to start:

  • Carry out some research of parking space listings and prices in your area on both Just Park and Your Parking Space marketplace websites

 

 

 

9. Create software

 

Monthly realistic earning potential: £1,000+ per month;
Initial Outlay: Medium;
Time invested: High;

 

If you’re a coder or have an interest in computer programming languages, you could find a niche for and a need for some software to make a task more efficient, a reduction in time to complete or even to minimise risk.

If you build the software and find an audience each time your software sells you of course make a profit.

Perhaps you can see a gap in the market or have a great idea for some software, and know exactly where to find potential customers, but no nothing of coding. You could outsource the software creation to a provider. This to you is at a one-time fixed price, but you can resell many times over.

You need to stipulate resale rights in to any contract with a provider who will build the software for, and make sure 100% of the ownership of the software is yours – but once the software is yours you can sell via your own website through marketing and advertising, or perhaps through a marketplace.

 

Where to start:

  • Look for software coders and builders on marketplaces such as Upwork and Fiverr

 

 

 

10. Create an online course

 

Monthly realistic earning potential: £250+ per month;
Initial Outlay: Low;
Time invested: High;

 

The internet has seen a recent boom in instructors and teachers which met the demand of an increased number of people seeking to learn from the web.

As soon the web could be seen in high definition, and download speeds and bandwidth from providers increased, it meant being able to put full video courses online became a possibility.

Online learning is nothing new, but it’s become more interactive and engaging through the availability of tools to put a course together. Free and low-cost videos, photos, graphics etc… plus with even mobile phones being able to record video and audio in high definition, it means more people have better access to create online courses than ever before!

If you feel you have a subject to teach, and the personality to teach it, you could try your hand in creating a course and looking for students.

Creating a course and adding it to the web can be done for free, but it can take time to plan, write, record, edit and produce your online course. Once your course is online it can be sold many times over to new students. Every sale is revenue and once you have created your asset (your online course) ongoing work is minimal.

There are lots of places to sell courses but the main two are Udemy and Teachable.

Udemy is a popular marketplace in which Udemy actively seek out students for your course. They already have an audience of tens of thousands they can promote your course too. There are also no upfront costs either. The downside though is your course will rarely sell for much more than around $10 (£8) and from this you will only earn between $4-$8 (£2.50-£7) per sale. It isn’t much, and you need a lot of students to make a reasonable amount, but it is passive.

Teachable on the other hand is another great course provider, with great online tools to help you post and display your course but Teachable have no audience. They won’t promote your course. You have to find your own students. They will also charge you a monthly fee from $39.00 (£30.00) per month regardless of how many students you have.

 

Where to start:

  • Take a look at the course hosts Udemy and Teachable to understand how you could sell your course

 

 

 

11. Buy and Sell Domain Names and Websites

 

Monthly realistic earning potential: £200+ per month;
Initial Outlay: High;
Time invested: Medium;

 

During the early 2000’s domain names were being bought and sold in huge volumes for huge values. It was like the wild west days of the domain name industry. It resulted in a domain name gold rush where domainers were heading to the equivalent of the Klondike with pickaxes in hand.

News stories of domains being bought one week for £10 and sold the next for £20,000+ were not uncommon. It took some creative thinking, and future perspective but many domainers made many thousands from their craft (some millions of pounds).

The wild west days are over but it’s still possible to make money this way. You need to grasp the idea and concept of what makes a good domain name. But a good positive marketable domain name in an industry can be worth many times more than you pay for it. To buy a UK domain name will cost approx. £8.00 per year for how long you are a registered owner of the name, and can be resold for however much you can sell it for.

Be careful as you can’t of course buy a domain name that breaches copyright and trademark infringements (because if you do these can be rightly taken away from you by the copyright holder).

If domain names are not your thing, you could try your hand at building a website or flipping a website for profit. Flipping a website simply means buying an unloved website, make nice, and sell for a profit – just like a property developer might.

It’s not for the novice. You need to know the value of a website and what makes it valuable (traffic, age, backlink profile, positive domain, domain name authority etc…) but if you can buy cheap, enhance and find a buying you can easily double your money or more on each ‘flip’

 

Where to start:

  • Check out Acorn Domains, a long-established domain name and website buying and selling forum;
  • Research websites on website resale marketplace Flippa, and try and understand patterns as to why;
  • Sedo is the most authoritative domain name selling marketplace on the web. Be careful looking at prices without bids as most domain name owners well over-value their domain names. Some often have price tags of many thousands but unlikely to sell for little more than a few pounds. Look for those domains that are being bid on, or are in auction, to understand which domain names are selling;

 

 

 

12. Holiday Home Investment and Rental

 

Monthly realistic earning potential: £1,000+ per month;
Initial Outlay: High;
Time invested: Medium;

 

It’s no secret people are holidaying and travelling now more than they have ever done before. Travel is relatively cheap and destinations aplenty. As a result, the demand for holiday accommodation is extremely high, it’s this demand which has caused hotel prices to rapidly increase, as someone will pay their price.

If you have money to invest, you may find having a holiday home to make use of yourself and also rent out at times you are not holidaying, could be a really good way to not only have a passive income asset, but an enjoyable one too!

You will also need to find a property management company to clean and provide repairs to your property after each use, but this can be a very rewarding passive income generating venture in more ways than one.

 

Where to start:

 

 

 

13. Create a marketplace

 

Monthly realistic earning potential: £1,000+ per month;
Initial Outlay: Medium;
Time invested: High;

 

Throughout a lot of our posts and features you will hear us mention a lot about marketplaces. This is the general term for a website or service that matches people looking for a product or service, and one that provides it.

Some very well-known marketplaces include eBay, Airbnb, Fiverr, Uber, Udemy etc… none of these companies sell products or provide direct services, but what they have done is create a hub where both buyers and sellers meet up.

ebay do not sell any products, but they give you the tools to sell your product through an auction. They also provide an audience as millions search ebay for second-hand items.

In order to become a successful marketplace, you need to be able to attract to your website or app both buyers and sellers. If though you feel there is a gap in the market you could create your own marketplace.

If you’re not comfortable building the website yourself, you’ll need to turn to a website designer or app creator (or both) in order to make your vision come true.

You’ll also need to find or know of a way to attract both buyers and sellers, plus you’ll need a starting place. It’s difficult to attract sellers if you have no buyers, and without a seller no one can buy anything. If you get the balance right and can encourage one side of the market to sign up on mass, the other side of the market will soon follow.

The likes of Uber, ebay, Airbnb etc… are now worth billions of pounds. Your vision may be next!

 

Where to start:

  • Look for web and app designers, coders and builders on marketplaces such as Upwork and Fiverr

 

 

14. Create an Outsourcing or Outservicing Business

 

Monthly realistic earning potential: £1,000+ per month;
Initial Outlay: High;
Time invested: High;

 

If you can think of a business idea of selling a product or providing a service, you may be able to put the whole business on an outsourcing autopilot.

What this means is you could manage the business but outsource each element.

For example, let’s say you want to sell a particular product for £200. To buy the product may cost you £120, which gives you £80 profit per sale but also means you have to take the order, box the order and then send out the order.

You could outsource this to a fulfilment company. A company who holds all your products and will take an order from your website, pack and despatch your order straight to your customer under your business name. All without you needing to lift a finger.

This will of course eat into your profit margin of £80, but it completely frees you up to market and promote the business. This of course you could also outsource to a marketing PR company and a social media manager. Which leaves you to manage customer feedback and deal with customer queries – or of course you could manage this too.

You could create a completely outsourced business fulfilment and customer service solution and only manage the companies providing the services.

You need to have the product margin and sales to do this, but this is how all small business grow to become large businesses. They have to grow, outsource (or employ) and be able to expand. You can’t do this as an individual one-man band.

 

Where to start:

  • There are many fulfillment and manufacturing agents that can be found online, depending on your product niche, or you can search on outsourcing marketplaces such as Upwork;

 

 

 

What is passive income

Hopefully all of these examples have given you a good insight as to the nature of passive income, and I won’t bore you with the basics or try and teach you how to suck eggs (where on Earth did that saying come from!) but to avoid any confusion I think passive income can be best put and described as:

 

Passive income is the method of earning money with no, or very minimal, additional work or time resource put in

 

Basically, and to elaborate a little further, this is the way of earning money without trading hours for pounds. You’re not being paid for an hour of your own time you’re being paid for use of or because you own some kind of asset.

We all have 24 hours in a day. Considering we need at least 6 hours sleep, and time for recuperation and of course food and drink, every person has around 10 hours per day in which to earn. Depending on whether you’re being paid minimum wage or £100 an hour, you are still limited by the number of hours you can physically work.

Passive income breaks free the constraints of trading your time for the money you earn. Buy or build your own own asset, and use to create extra money.

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