How to Find & Sell Private Label Products: Beginner's Guide
June 6, 2023
From grocery stores to Amazon, you see private label products all day long. But do you know how to find private label products?
We’ve talked to a lot of people who make money selling private label products. Amazon FBA is one of their favorite tools to sell online, and they had some great tips about other sales outlets as well.
We’ll provide you with a guide to the product development process with input from interviews we’ve done with some of the most successful independent private label sellers.
You’ll learn all there is to know on topics like these:
Click any of the links above to jump to the section that most interests you.
What are Private Label Products?
Private label products are products created by a manufacturer with the intent for an exclusive third party to sell them using a different brand name. Private labeling removes the need to invest in high-priced equipment by paying an existing manufacturer for the production of goods.
Private label businesses are growing increasingly popular in the ecommerce field thanks to the reduced startup costs of a private label brand.
White Label vs Private Label
Understanding the difference between private label vs white label is important before getting started in this field. Private labeling provides exclusivity for the retailer or wholesaler. White labeling allows multiple retailers to add their branding to the product and sell it as their own.
Here’s what this confusion can cause harm to your business: If you create a private label product and sign a manufacturing agreement as a white label product, you have effectively allowed the third-party manufacturer to use and sell your intellectual property for their gains. Moral of the story? Make sure to read your contract!
How Much Do Private Label Products Make?
According to Statista, private label products accounted for $6.6 trillion of 2021 GDP and are projected to hit $7.9 trillion in 2026. This includes big brands that offer their own branded products. To draw inspiration from which products sell most, look at the major retail private labels:
- Walmart: Great Value
- Amazon: Amazon Basics
- Costco: Kirkland
- Target: Archer Farms
Benefits of Selling Private Label Products
You might want to consider becoming a private label seller for these advantages:
- You Control Production: Specifying quality, materials, ingredients, and production rate (as long as it is over the minimum order quantity (MOQ) provides more control than white label brands.
- You Can Act Quicker: Major competitors have to go through a chain of command, but a private label brand can adjust to market conditions faster.
- You Set Pricing: You get to set the pricing to get the margins you need. Using another business model might make pricing competitively difficult. (If your prices are too high, you won’t sell products, though).
- You Control Marketing: When you sell another company’s products, you have to obey their brand communication guide. When you create your own product ideas, you can package them how you want and market them to your target audience without worrying if someone will reject your marketing ideas.
Cons of Selling Private Label Products
Selling private label products doesn’t come without challenges. Here are some to keep in mind:
- Manufacturer Quality: Every manufacturer has their own quality control standards. If your product quality expectations are higher than those of your suppliers, you might be disappointed.
- Consumer Perception: Private brands pop up every day with the prevalence of print-on-demand. Some are amazing, while others are cheap and poorly made. Consumers need time to trust a brand. Do everything you can to build their trust.
- Loyalty Building: Your target audience doesn’t know you yet. Until they get to know you and love your brand, finding customers for your private label products may be difficult.
How to Private Label Products
You’ll need to perform the following tasks when you create your own brand name products:
- Decide what type of private brand you’ll be.
- Find private label manufacturers.
- Test their products.
- Negotiate a deal.
What are the Best Niche Markets?
First, you’ll want to perform market research. You’ll want to establish:
- The products you want to sell
- The target market for the products
- Where you will sell the products
- How you will market the products
This will impact what private label manufacturers you want to approach. It will also impact the profit margins you earn on your private label products. Most private labels work best with products that are replenished regularly, but there are a few that don’t fall into this category.
Common Private Label Product Ideas
We pulled a list of commonly searched private label, white label, and branded products from ahrefs.com to find out what industries use the most private label-ready products. If you’re looking for a niche market, consider these private labeling ideas:
- Private label clothing
- Private label hair care products
- Branded promotional products
- White label food products
- Private label skin care products
- White label marketing products
- Private label detailing products
- Private label cleaning products
- White label furniture
- Private label pet products
- Private label CBD products
This is just an overview to get the wheels turning in your brain. We’ll cover some of these categories more in-depth later in the article.
Where To Find the Best Private Label Suppliers
Next, you’ll need to choose a private label supplier. There are plenty of private label suppliers, depending on your industry. Check a supplier directory like:
- ThomasNET: The most sophisticated database of third party manufacturers.
- Private Label Help: 27 categories of private label manufacturers.
- HAPPI: Find a private label manufacturer by industry or country.
- Impressions: Find apparel private label manufacturers.
(Keep reading—there’s more info on these manufacturers later on.)
Once you’ve found that a private label manufacturer creates products similar to the ones you want to sell, it’s time to ask them to send a sample.
Test Each Private Label Manufacturer
Before you get into a minimum order quantity contract and provide the third party manufacturer with your intellectual property, you want to verify they are a reliable manufacturer. That means you’ll want to ask the private label manufacturer for some samples.
Pay attention to aspects like:
- How long does it take to receive your shipment?
- How much did the products cost before shipping?
- Is the quality of the products consistent?
- How much did shipping cost?
- How long was shipping vs lead time?
These questions will help you set benchmarks when comparing the private label products. Once you establish which manufacturer to make part of your supply chain, it’s time to move to the next step.
Negotiate A Private Label Brand Contract
Private labeling will require a contract between your business and the third party manufacturer. The contract terms may be dictated by the private label manufacturer, the private label, or negotiated.
If you are using print-on-demand, the manufacturer will almost always dictate the terms, while terms for a custom-made product will be negotiated.
Even when terms are negotiated, there are some specifics that may be unchangeable, like the minimum order quantity (MOQ) or quality controls.
Now that you understand the process of private labeling, let’s circle back to where to find private label products to start your business.
How to Find Private Label Products
There are a ton of ways to find private label products for small business ventures. As part of this article, I looked for the most commonly searched private and white label products on Google. Here are the high-level categories that are most searched.
Private label bath and body products
This category includes the following search terms:
- Private label beard products
- Private label hair products
- Wholesale organic skin care products private label
- Private label hair products manufacturer
- Private label hair products for small business
- Wholesale private label natural hair products
- Private label body products
- Private label soap
Best Trade Show USA to Resource Private Label Skin Products
It comes as no surprise to me that Las Vegas leads the way in trade shows to promote private label products. If you want to know how to find private label products, go check out some of these conventions.
Vegas Conventions
The following conventions will have private label wholesale beauty product suppliers:
- iSpa Conference and Expo: May 9-11, 2023
- International Beauty Show: June 24-26, 2023
- Cosmoprof: July 11-13, 2023
- SupplySide West: Oct 23-27, 2023
Most Beauty Shows Change Cities Each Year
Some other tradeshows to check out include:
- Premiere Orlando: Largest North American private labeling convention for beauty supplies.
- The Makeup Show: Hosts three conferences across the country.
- IndieBeauty Expo: This convention is primarily independent products, while others are more focused on the beauty aspect.
Find more conventions and trade shows that present private label products.
Private Label Hemp Products
To find hemp and CBD private label products to sell on Amazon and other sites, search terms like:
- Private label CBD products low minimum
- Cannabidiol private label
- Best private label CBD companies
- CBD white labeling companies
- CBD private label dropship
- private label CBD manufacturer
Joy Organics appears to be one of the better private label products examples in this industry.
Best Private Label Manufacturers
Thomasnet
Find US and Canadian manufacturers, suppliers, and buyers on this online database. Thomasnet lets you compare manufacturers by size, history, sales, standards they follow, and more. This free database is a great place to start your journey creating private label products. Learn more about Thomasnet.
AOP+
AOP+ sells print-on-demand products and connects to Etsy and Shopify to make selling in the US, UK, and EU easier. They handle order processing and fulfillment in-house, which is a rarity for print-on-demand companies. Get clothing, accessories, and other products manufactured and shipped to your customers with AOP+.
Maker’s Row
Maker’s Row was started in 2012 to connect businesses with American manufacturers. Unfortunately, this platform has a monthly or annual fee that will cost up to $1,800 per year. You can see Maker’s Row online or at many trade shows like the MAGIC fashion show.
MFG
Another popular directory is MFG. You can search suppliers by continent. This directory is over 20 years old and allows you to find manufacturers or create a free profile to request quotes and use other features. While I haven’t dug deep into MFG’s database, they seem to be more focused on metals and plastics.
Kompass
This free B2B connects businesses in more than 60 countries. Kompass is one of the smaller databases, but it has more countries you can work with than other directories. I also really like that Kompass makes it easy to tell what kind of suppliers they have on their website.
SaleHoo
Check out SaleHoo for tools that go beyond a suppliers’ directory. This company offers educational materials, market research tools, and a forum to get the most out of your private label products and dropshipping company. You’ll have options for monthly, annual, or lifetime plans depending on your needs, but you can get access for as low as $67.
How to Sell Private Label Products
After you have sourced your private label products, you’ll need to set up the system to sell your private label goods. You’ll need to perform the following steps when you have private label products to sell.
- Register your private label business
- Create branded packaging
- Build a website (or list your products in an online marketplace)
- Market your product line
- Start selling
- Get reviews
- Pay your taxes
Let’s go through each of the steps about selling private label products.
Step 1. Register Your Private Label Business
A private label business should form their legal business entity before they start accumulating costs. This means you’ll need to:
- Get an LLC or Corporation
- Get a Sales Tax Permit
- Get a Business Bank Account
You can learn to do all these in our learning hub, which gives step-by-step instructions for each of the steps for starting a business.
Step 2. Create Branded Packaging
Now that your private label business is legal, you’ll want to create custom packaging for your private label products. Depending on the product, the business labels might be:
- A sticker on a plastic sleeve
- A custom designed box with brand labels
- Branding labels on the inside of a t-shirt
Check out PackLane’s website for examples of product packages and how quantity impacts pricing. Some of the packaging can be as high as $50 for a single box, but you can save up to 90% when you buy in bulk.
Step 3. Build a Website (or List Your Products in an Online Marketplace)
eCommerce business models make it easy for a business owner to build their own websites and ecommerce stores. This is really important when you have private label products to sell (I’ll tell you more in our cautionary tale). A private label product company will need to:
- Create an ecommerce market somewhere like Woocommerce or Shopify
- Setup a payment processor
- Take photos of their own branded products
- Write compelling product descriptions
Learn more about creating an online store.
A consulting client of mine contracted one of the top web development companies in the area to create his online store.
He wanted the first heading to be below the fold (not visible when you first open the webpage) because he spent $10K+ on photography to have beautiful pictures that conveyed the style of the brand.
The website developers refused and never delivered a final product because they disagreed with his request.
Long story short, the client has spent hundreds of thousands of dollars, has huge amounts of inventory, and has pretty much written off his business because he paid for everything on the front end and never got past this hiccup with the website.
Step 4. Market Your Product Line
Once you have an online store, you’ll want to start marketing your products. There are a lot of ways to market private labeling companies. Some of the best ways are:
- Keyword Research and Optimization
- Content Creation
- Sharing on Social Media
- Product Giveaways
- Influencer Marketing
- Listing Them in Other Marketplaces
Keyword Research and Optimization
Even the best private label products aren’t going to sell themselves. People have to know about them. You need to perform keyword research and optimize your site to meet the terms that people search for when looking for a product.
For instance, the owner of Pooch Selfie, a custom product that holds a tennis ball on top of a cell phone, gets around 50% of his ecommerce store traffic from people who find his private label products by searching for things like “dog selfie sticks” or “Shark Tank dog toys” as opposed to the branded term.
Watch the video below for his tips on creating a custom product.
Content Marketing for Private Label Brands
You’ll want to use the keywords you found to drive your content by using them in product pages, URLs, blogs, pictures, and more. Content marketing lets search engines and consumers know that you are an active online business.
The more useful the content you create, the more likely your online store is to rank for the subject matters you are targeting. Here at UpFlip, we use SurferSEO and Ahrefs to help our brands rank for keywords.
Social Media
After you’ve written content for your private label business, you should share it on social media. Make sure the content fits both your private label business and the social media platform you share it on. Some types of content perform better on certain social media platforms:
- Short Form Video: TikTok, YouTube, Facebook, and Instagram
- Long Form Video: YouTube, Facebook, TikTok, LinkedIn
- Pictures: Instagram, Facebook, Twitter, LinkedIn
- Blogs: Facebook, Instagram, Twitter, LinkedIn
Experiment with posting times to see what time works best for your own brand.
Everyone Loves Product Giveaways
Private label brands can do well with product giveaways. You’ll want to make the giveaway something that is inexpensive for you, but that will get your private labeling where people use it as frequently as possible.
For instance, if you sell private label car care products you might want to do a giveaway for fun branded air fresheners. This gives you an easy way to collect customers’ emails and information to target them for other car cleaning products.
Try Influencer Marketing
Influencer marketing is a great way to help people find private label products. This marketing business model makes use of people who have a large following on social media who can talk about specific niches and bring awareness to their followers.
They can help boost your private label product sales by using your products in a video and sharing the brand identity with their followers. This works particularly well for private label beauty products as followers are eager to learn what an influencer does to achieve specific makeup or hairstyle.
List Your Products in Other Marketplaces
Create an online store on every marketplace you can to get your private labeling in front of as many eyes as you can. According to SimilarWeb, the top places to sell private labeled products are:
- Amazon: Learn more about selling on Amazon.
- Ebay: Learn how to sell private labeling on eBay’s online store.
- Walmart: Find out how to sell your private label apparel or other products on Walmart.com.
- Etsy: Learn about starting an Etsy shop from a brand owner.
- Target: Learn more about private labeling sales through Target.
Hopefully, your product research and private labeling work has paid off. Next, you should start selling your private label products for small business profits.
Step 5. Start Selling Your Private Label Products
Once you’ve created your online store, there are plenty of additional ways to sell your products. You can sell:
- Private label products wholesale
- Private label products in retail stores
- Amazon private label products
- Direct to consumer
Private label companies can also upsell the private label products by suggesting an additional purchase of their own products or retail brands that work well with them.
For instance, if you private label hair products, you can suggest someone buy the conditioner when they buy the shampoo and give the customer a discount for buying both together.
Step 6. Get Reviews for Your Private Label Company
No brand starts with instant name recognition. You’ll need to get reviews for your private label to help overcome poor consumer perception of private and white label products.
Once people see that a company has great product reviews, they are more likely to accept that the brand identity isn’t just trying to make higher profit margins on generic products.
One of the best ways to do this is to automate requests for reviews several days to a week after the consumer has received the product. (Be careful though. Amazon private label products can get in trouble if they request reviews through means other than the standard product review process.)
Step 7. Don’t Forget To Pay Your Taxes
One of the ways many business owners and self-employed people get in trouble is by forgetting to pay their taxes. Many locations require quarterly tax filings for private label business ventures.
These filings may include federal income taxes, state income taxes, sales taxes, and payroll taxes. Make sure to keep track of the due dates and work with a licensed tax preparer.
How to Sell Private Label Products on Amazon
Amazon is a great place to sell a private label. Amazon offers multiple ways for merchants to sell, including Amazon FBA, Amazon Merch, and other strategies. It doesn’t matter which strategy you choose; you’ll want to:
- Perform market research
- Start an Amazon merchant account
- Decide how you’ll sell on Amazon
- Find private label products to sell on Amazon
- Register your products with Amazon
- Send them to Amazon FBA private label
Step 1. Research the Market
You’ll want to research Amazon’s seller options to decide which one you want to use. Most Amazon sellers use the FBA service, in which the manufacturer ships your bulk goods to Amazon and Amazon fulfills the order for a referral fee between 5 and 20%.
Make sure to read the fees really well because they impact pricing and profitability.
One particularly useful trick you can use with Amazon FBA is working with a dropshipper to produce your custom products. Place an original bulk order that is sent to the Amazon warehouse, then every time a product is ordered, have Amazon ship it, send the dropshipper money for more, and you keep the profits.
Just like that, you get the benefits of Prime and dropshipping all in one.
You’ll also want to research the demand for the product category. Make sure you study the number of competitors and the number of searches for similar products. Michael Jackness, the owner of treadmill.com and Amazon FBA private label stores, told us:
Picking the right niche and market is really important. It’s gotten more expensive to get the customer, so you need to be able to sell to them more than once.
Hear more from Michael to learn how he created a $9 million annual ecommerce company.
Learn more about market research.
Step 2. Create an Amazon Seller Account
Next, you’ll need to sign up for an Amazon seller account. Go to Seller Central. We show you how to set up an Amazon account in our blog about an Amazon FBA business.
Step 3. Test the Products
Test the products to make sure there are no quality control issues. Depending on the type of product, you’ll do this in different ways.
For example, I stress-test t-shirts by running them through a wash to test how many times you can wash and dry them before the designs wear off. With candles, you might want to test the burn time and see how long it takes to burn them down to nothing.
There are plenty of ways to test any product; you should definitely know how long your product will last.
Step 4. Find Private Label Products to Sell
We’ve already provided a list of private label products and where to find them, but you should check out our best things to resell blog for more information on the best products to private label.
Step 5. Register Your Products With Amazon
Any branded products should be registered with Amazon brand services to protect them from being stolen. To do this, you’ll need a registered trademark with the appropriate government office. Check out Amazon’s Brand Services page.
Step 6. Send Your Products to Amazon
To make the most of Amazon, you need to have an Amazon FBA account. Sending your products to Amazon’s warehouse means they qualify for Amazon Prime. You can also qualify for Prime with self fulfillment (but there are more stringent requirements). I strongly suggest reading Amazon’s guide before getting started as well.
People Also Ask
What is White Labeling?
The white labeled definition is to provide the exact same product to different companies with their brand logo on it. The manufacturer normally offers this service for the top products to sell online because it helps them run closer to 100% capacity.
The name comes from manufacturers providing the products with a blank white label so other companies can sell the product with their branding.
Vitamins, marketing, and other industries use this strategy to help business owners make more money by filling excess capacity while the marketers can increase their offerings without the additional costs of creating a new manufacturing facility.
What is Private Label Masters?
Private Label Masters is an affiliate course that teaches people about the best thing to sell online through private labeling and white labeling.
What is the Best Product to Sell Online?
The best product to sell online is a product that has the following characteristics:
- High search volume
- Low competition
- High profit margin
- You are knowledgeable and passionate about it
Start Building a Private Label Company Today
At this point, you should be ready to start your market research and start an Amazon private label store. I strongly recommend using the links in this blog to dig deeper into the subject matters you need more information about.
What experience do you have with white label, private label, and custom-made products?
Author
Brandon Boushy
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We talked to Santino Filipelli, who started Modern Realty in 2017. Today, he has a team of real estate agents working at his brokerage, and his top performer earned more than $1 million dollars. Santino told us:
[su_quote]I got into the real estate business kinda on accident. I intentionally got my real estate license while I was in college to become a firefighter, but decided to stay and quit school.[/su_quote]
He laid out a five-step process to becoming a real estate agent.
Real estate agents and brokers are classified under the North American Industry Classification System code 53121. Nearly 1 million businesses split nearly $200 billion in revenue and have around a 21% profit margin. That means nearly $200,000 revenue and $42,000 profit per business.
Let’s look at the revenue and expenses of real estate businesses.
Let’s look at the expenses for a real estate agent.
Becoming a real estate agent requires building a personal and professional network. Some of the best ways to build your network and expand your knowledge include:
Santino told us he expects crypto to start making a bigger play in real estate, but warned:
[su_quote]Lots of companies have tried to disrupt the real estate industry, but none have successfully changed it.[/su_quote]
Before I continue, I should probably warn you that crypto is currently under-regulated in the U.S. Evaluate the risks carefully.
There are a few ways that real estate and blockchain interact:
[su_note note_color="#dbeafc"]
Nonfungible Tokens (NFTs) have entered the real estate market and are being used as a way to sell homes. While most companies have not gone to this approach, I would expect many to in the future because:
The metaverse is a virtual world. It’s basically the world people unplug from in the movie the Matrix. Like the real world, it allows transactions including real estate transactions.
Sandbox is one of the most popular metaverses where users can buy and sell land, but there are more coming out every day. I’m personally investing in Stageverse at the moment.
Good news! You don’t need to have a real estate license to buy and sell metaverse lands. If you want to learn more about how to become a metaverse real estate agent, check out this Academicful blog.
Let’s look at the first step of becoming a real estate agent.
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Getting a new real estate license has other basic requirements including:
Sanitno explained to us that finding brokers that develop their people is one of the most critical factors impacting the success of a new career. He also gave us some input on what to look for when considering brokers.
He told us:
[su_quote]You get what you pay for. Higher costs tend to equal better support. If you develop a good skill set, find a broker with lots of support and learn from them. Find one that will help with leads and ask how they teach their team.[/su_quote]
Some of the questions you should ask brokers include:
Santino told us every agent should consider adding the following people or systems to their business to let them focus on serving the customers more:
[su_note note_color="#dbeafc"]
- Enroll in Real Estate School, take your credit hours, and take a test.
- Get your real estate license.
- Find a broker.
- Secure clients.
- Close deals.
Real Estate Industry Crash Course
Real estate is an excellent career choice, but it can have high fluctuations due to economic conditions. For example, nearly 1 million real estate agents left the National Association of Realtors (NAR) between 2007 and 2012. Since 2012, 500,000 new Realtors have joined the NAR, nearly ⅓ of those joining in 2021. So many people enter the industry that it is one of the ten most commonly started businesses according to the Economic Innovation Group. Statistics come from IBIS World unless otherwise cited.Financials
Real estate agents and brokers are classified under the North American Industry Classification System code 53121. Nearly 1 million businesses split nearly $200 billion in revenue and have around a 21% profit margin. That means nearly $200,000 revenue and $42,000 profit per business.
Let’s look at the revenue and expenses of real estate businesses.
Revenue for Real Estate Agents
Revenue is primarily driven by commissions on the sale of property. The average commission is around 2%, which means for $200K in revenue, a real estate agent needs to sell approximately $10 million worth of homes or businesses. That converts to approximately 10 to 40 homes in most places. The Bureau of Labor Statistics found that brokers make approximately $62K per year, while sales agents average around $48K.
Let’s look at the expenses for a real estate agent.
Real Estate Agent Expenses
A real estate agent will typically experience the following expenses:- Wages: 16-22% which includes a 5-6% commission to cover brokerage administrative expenses.
- Office Supplies: 3-15%, with industry average of 3.6%.
- Marketing: Typically under 2%. This seems like an opportunity for the real estate agent who learns marketing and expands it to the typical 8% of other industries.
- Rent + Utilities: 5-6% of revenue.
- Depreciation: Normally 1.5%-16%. Business owners will normally claim depreciation of vehicles, buildings, and equipment. This is an on-paper cost.
- Other: These include all the miscellaneous expenses like taxes, software, gas, and payments to subcontractors like photographers. Here’s the breakdown of other expenses.
How to Become a Successful Real Estate Agent
Santino discussed the keys to success in real estate. He told us: [su_quote]Take the DISC test. People with high D and high I scores tend to do well, but you can’t be overbearing. You can still do well without it, but those personalities tend to do best.[/su_quote]Check out our interview with him below:
We asked Santino how average and top performing agents perform. He told us: [su_quote]The top agent came on early and spent 3 to 4 hours being mentored. He made close to $1 million last year on:- 84 transactions
- $580K average home
- 2% average commission
Join and Get Involved in Professional Groups
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- Young Professionals Network (YPN): Helps real estate agents learn skills and best practices that help them be more successful.
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- National Association of Real Estate Brokers (NAREB): This organization focuses on helping improve minority professionals’ results and community homeownership rates.
- Federal Housing Finance Agency: Stay updated on laws impacting real estate.
Industry Trends
Three industry trends currently impact real estate: [su_note note_color="#dbeafc"]- High home prices tend to lower demand for housing
- Rising interest rates tend to lower demand for housing
- Tightening credit tends to make it harder to buy a home
Real Estate Crypto & Blockchain
Santino told us he expects crypto to start making a bigger play in real estate, but warned:
[su_quote]Lots of companies have tried to disrupt the real estate industry, but none have successfully changed it.[/su_quote]
Before I continue, I should probably warn you that crypto is currently under-regulated in the U.S. Evaluate the risks carefully.
There are a few ways that real estate and blockchain interact:
[su_note note_color="#dbeafc"]
- NFT Titles
- Selling metaverse real estate
NFT Titles
Nonfungible Tokens (NFTs) have entered the real estate market and are being used as a way to sell homes. While most companies have not gone to this approach, I would expect many to in the future because:
- NFTs allow the creator to receive a recurring commission. If you are the first real estate agent to sell a house, you get a commission every time it passes hands. Sweet!
- It reduces the time to close a sale.
How to Become a Real Estate Agent in the Metaverse
The metaverse is a virtual world. It’s basically the world people unplug from in the movie the Matrix. Like the real world, it allows transactions including real estate transactions.
Sandbox is one of the most popular metaverses where users can buy and sell land, but there are more coming out every day. I’m personally investing in Stageverse at the moment.
Good news! You don’t need to have a real estate license to buy and sell metaverse lands. If you want to learn more about how to become a metaverse real estate agent, check out this Academicful blog.
Let’s look at the first step of becoming a real estate agent.
Step 1. Enroll in Real Estate School
Every state is different, but there are some common requirements to start a real estate career. The first requirement is normally getting the proper education to take the real estate license exam. In some states, you can skip the entire pre-licensing course load if you are a licensed attorney, are moving from a state that has license reciprocity, or you have an apprenticeship with a broker. It should be noted that if you are planning on going into property management, many states have a separate licensing requirement for this. Check your state’s Real Estate Commission before booking the courses. You can find information on the real estate schools, course requirements, and licensing in the table below. If you have a criminal background, make sure to review the requirements really well because most states have background check and/or fingerprinting requirements. [su_table responsive="yes" fixed="yes"]
Approved Schools |
Take Exam |
Apply for License |
Age Requirement |
High School Required? |
Criminal Record |
Past Rejections, Revocation Limitation |
Number of Pre license hours |
Types of Licenses |
Continuing Education Requirements |
State Abbreviation |
|
| How to get a real estate license in Alabama | Go for ones with high success rates | Exam Centers $73 exam fee | Instructions for applying for license | 19+ | Required | No Felonies | None in Last 2 Years | 60 | Temporary License and Permanent Salesperson's License | 30 hours in first year, 15 hours every 2 years after getting permanent salesperson | AL |
| How to get a real estate license in Alaska | List of schools | Exams are on specific days $100 fee in major cities | Find forms for RE Salesperson and Broker | 19 | Not Specified | Eligible 7 years after completion of sentence | Not Specified | 40 | Salesperson, broker, and broker associate options | 30 first year, 20 every 2 years | AK |
| How to get a real estate license in Arizona | Find Licensed RE Schools | Pearson VUE $75 fee | License $60 | 18 | Not Specified | Disclose all, no felonies allowed, fingerprinting | Not denied in 1 year or revoked within 2 years | 90+6 hours contract writing | Not Specified | 24 hours every 2 years | AZ |
| How to get a real estate license in Arkansas | AR Licensed RE schools | Pearson Vue $75 fee | License $86.25 residents, $161.25 non-residents | 18 | Not Specified | Background check, decided on case-by-case basis | Not Specified | 60 | Not Specified | 18 in first 6 months, 7 per year | AR |
| How to get a real estate license in California | CA Approved RE Courses | Apply for Exam or Exam/License | Apply for Exam or Exam/License | 18 | Not Specified | fingerprint+background check, any crime can disqualify you | Not Specified | 135 hours (3 courses at college or RE school | Not Specified | 45 hours every 4 years | CA |
| How to get a real estate license in Colorado | Colorado Broker Education | PSI Exams | Apply for License | 18 | Not Specified | background and fingerprinting | Not Specified | 168 hours | Broker License Only | 24 hours every 3 years | CO |
| How to get a real estate license in Connecticut | CT approved Pre-licensing education | CT PSI Exams | CT Licensing | 18 | Not Specified | Not Specified | Not Specified | 60 hours, 120 and 2 years experience to become broker | salesperson, broker | 12 hours per year before May 31st | CT |
| How to get a real estate license in Delaware | Email DE DPR | DE Pearson VUE Exam | Apply for License | 18 | Not Specified | Allowed after conviction is waived, which takes 5 years | Not Specified | 99 hours | Not Specified | Before April 30th of even number years, you need 21 CE hours, first batch is prorated. | DE |
| How to get a real estate license in Florida | FL Licensed Schools Search | FL Pearson VUE Page | Get your FL Real Estate License | 18 | Yes or GED | Background check and disclose convictions | Not Specified | 63 hours | Not Specified | 45 first 2 years, and 14 every 2 years after | FL |
| How to get a real estate license in Georgia | GA License Real Estate Schools | Administered by AMP $121 Fee | Apply for GA License | 18 | Yes or GED | Pass Background check | Not Specified | 75 hours at RE school, 10 quarter hours, or 6 semester hours at an accredited college | Not Specified | 25 hours first year 36 hours every 4 years | GA |
| How to get a real estate license in Hawaii | Go To Course Search and Download the providers | HI PSI Exams | Forms to Apply | 18 | Yes or GED | Not Specified | 60 hours | Not Specified | 20 hours every 2 years | HI | |
| How to get a real estate license in Idaho | ID Real Estate Courses | ID Pearson VUE Exams | Follow this checklist then apply | 18 | Yes or GED | background and fingerprinting | Not Specified | 90 hours | Not Specified | 19 hours every 2 years | ID |
| How to get a real estate license in Illinois | IL Approved Courses | PSI Exams | Illinois Dept. of Financial & Professional Regulation Online Portal | 18 | Yes or GED | background check | Not Specified | 75 hours | broker | 45 hours after passing test and 24 hours every 2 years | IL |
| How to get a real estate license in Indiana | PA Approved Providers | Indiana PSI EXAM site | IN License Application | 18 | Yes or GED | background check | Not Specified | 90 hours | Not Specified | 30 in first 2 years, 36 every three years after | IN |
| How to get a real estate license in Iowa | Iowa information on RE Licensing | 18 | Yes or GED | background check | Not Specified | 60 hours+36 in class hours | Not Specified | 36 hours every 3 years | IA | ||
| How to get a real estate license in Kansas | KS Requirements for RE Licensing | 18 | Yes or GED | background check | Not Specified | 60 hours | Not Specified | 12 hours every 2 years | KS | ||
| How to get a real estate license in Kentucky | KY Real Estate Commission | 18 | Yes or GED | background check | Not Specified | 96 hours or 6 credit hours from a college | Not Specified | 48 hours in first 2 years, then 6 hours every 2 years afterwards | KY | ||
| How to get a real estate license in Louisiana | LA Real Estate Commision | 18 | Yes or GED | background check | Not Specified | 90 hours | Not Specified | 45 hours in the first 180 days + 4 years by Dec 31, then 12 hours each year by Dec 31 | LA | ||
| How to get a real estate license in Maine | Maine Real Estate Commission | 18 | Yes or GED | 3 notarized letters of recommendation | Not Specified | 55 hours | Non-renewable entry level sales agent, associate broker, broker | Have to complete the pre-license associate broker and complete another exam before license expires. The associate broker will require 21 hours every 2 years | ME | ||
| How to get a real estate license in Maryland | MD Real Estate Commision | 18 | Not Specified | Good character | Not Specified | 60 hours | Not Specified | MD | |||
| How to get a real estate license in Massachusetts | MA Real Estate Licensing Page | 18 | Not Specified | Not Specified | Not Specified | 40 hours | Not Specified | 12 credits every 2 years | MA | ||
| How to get a real estate license in Michigan | MI Real Estate Licensing | 18 | Not Specified | Not Specified | Not Specified | 40 hours | Not Specified | 18 every 3 years | MI | ||
| How to get a real estate license in Minnesota | MN Real Estate Licensing | 18 | Yes or GED | Not Specified | Not Specified | 90 hours or 3 classes, you can take the test after first and complete others in first year | Need sponsor from brokerage | 15 hours per year | MN | ||
| How to get a real estate license in Mississippi | Warning MS RE Commission has a page from 1998 | 18 | Not Specified | Not Specified | Not Specified | 60 hours | Need sponsor from brokerage | 30 hours in first year, 16 every 2 years | MS | ||
| How to get a real estate license in Missouri | MO Real Estate | 18 | Yes or GED | Background check (after passing test) | Not Specified | 48 hours, be a licensed attorney, or be granted a one-time sitting. | Not Specified | 24 hour Missouri Real Estate Practice Course (MREP) after passing test, then 12 hours every 2 years | MO | ||
| How to get a real estate license in Montana | ME Real Estate Licensing | 18 | 10th grade or higher | Not Specified | 70 hours | need sponsor | 12 CE hours per year | MT | |||
| How to get a real estate license in Nebraska | NE Real Estate Commision | 19 | Yes or GED | Background check | Not Specified | 3 courses/66 hours | Not Specified | 18 hours every 2 years | NE | ||
| How to get a real estate license in Nevada | NV Real Estate Commision | 18 | Not Specified | Background check | Not Specified | 120 hours | Not Specified | 24 hours every 2 years | NV | ||
| How to get a real estate license in New Hampshire | NH Real Estate Licensing | 18 | Yes or GED | Background check | Not Specified | 40 hours | Not Specified | 15 hours every 2 years | NH | ||
| How to get a real estate license in New Jersey | NJ RE Licensing Info | 18 | Yes or GED | Background check | Not Specified | 75 hours | need sponsor | 12 hours every 2 years | NJ | ||
| How to get a real estate license in New Mexico | NM Regulation and Licensing Department | 18 | Not Specified | Background check and fingerprints | Not Specified | 90 hours | Associate broker | 36 hours every 3 years | NM | ||
| How to get a real estate license in New York | NY Real Estate Agent Page | 18 | Not Specified | No Felonies | Not Specified | 75 hours | Not Specified | 22.5 hours every to years | NY | ||
| How to get a real estate license in North Carolina | NC Real Estate Commission | 18 | Not Specified | background check | Not Specified | 75 hours | provisional license, full license | 90 additional hours for full license | NC | ||
| How to get a real estate license in North Dakota | ND Real Estate Commission | 18 | Not Specified | fingerprints, background check, and credit check with fee | Not Specified | 90 hours | Not Specified | 9 per year | ND | ||
| How to get a real estate license in Ohio | OH Real Estate & Professional Licensing | 18 | Yes or GED | Felonies may prohibit licensing | Not Specified | 120 hours | Not Specified | 30 hours every 3 years | OH | ||
| How to get a real estate license in Oklahoma | OK Real Estate Commission | 18 | Not Specified | good moral character | Not Specified | 90 hours | Not Specified | 45 in first year the 21 ever 3 years | OK | ||
| How to get a real estate license in Oregon | OR RE Broker Licensing | 18 | Yes or GED | fingerprints and background check | Not Specified | 150 hours | Not Specified | 30 before first renewal and then 30 every 2 years | OR | ||
| How to get a real estate license in Pennsylvania | PA Real Estate Commission | 18 | Not Specified | pass background check | Not Specified | 75 credits or major in real estate from 4 year college | Not Specified | 14 hours by May 31 of next year, then 14 every 2 years | PA | ||
| How to get a real estate license in Rhode Island | RI Real Estate Agent Guide | 18 | Not Specified | pass background check | Not Specified | 45 hours plus a 3 hour certificate for lead poisoning mitigation | Not Specified | 24 hours every 2 years | RI | ||
| How to get a real estate license in South Carolina | SC Real Estate Agent Info | 18 | Yes or GED | Not Specified | Not Specified | 60 hours, test, then 30 more hours before applying for license | Not Specified | 10 CE hours every 2 years by June 30th | SC | ||
| How to get a real estate license in South Dakota | SD Real Estate Commission | 18 | Not Specified | Not Specified | Not Specified | 116 hours | Not Specified | 30 hours for each of the first 2 renewal periods, then 24 hours every 2 years | SD | ||
| How to get a real estate license in Tennessee | TN Affiliate Broker (RE Agent) | 18 | Not Specified | Not Specified | Not Specified | 90 hours | Not Specified | 16 hours every 2 years | TN | ||
| How to get a real estate license in Texas | TX Real Estate Commission | 18 | Not Specified | fingerprints and background check | Not Specified | 180 hours | Not Specified | 90 hours post license and 2 four-hour legal update courses in first 2 years and 18 hours every 2 years after., | TX | ||
| How to get a real estate license in Utah | UT Div. of Real Estate | 18 | Yes or GED | fingerprints and background check | Not Specified | 120 hours | Not Specified | 18 hours including 12 hour new agent course, 18 hours every 2 years after | UT | ||
| How to get a real estate license in Vermont | VT Real Estate Agent Requirements | 18 | Not Specified | Not Specified | 40 hours | Not Specified | 16 hours every 2 years | VT | |||
| How to get a real estate license in Virginia | VA RE Commission | 18 | Yes or GED | fingerprints and background check | Not Specified | 60 hours | Not Specified | 30 in first two years, 16 hour every 2 years after | VA | ||
| How to get a real estate license in Washington | WA Real Estate Brokers license | 18 | Yes or GED | fingerprints and background check | Not Specified | 90 hours | Broker license | 90CE hours in first 2 years, then 30 hours every 2 years | WA | ||
| How to get a real estate license in West Virginia | WV RE Comm | 18 | Yes or GED | fingerprints and background check | Not Specified | 90 hours | Not Specified | 7 hours each year | WV | ||
| How to get a real estate license in Wisconsin | WI RE Comm | 18 | Not Specified | Not Specified | Not Specified | 72 hours or apply for an RE apprentice by working with broker for 20 hours a week | Not Specified | 18 hours every 2 years | WI | ||
| How to get a real estate license in Wyoming | WY Real Estate License | 18 | Not Specified | fingerprints and background check | Not Specified | 54 hours | Not Specified | 45 hours every 3 years | WY | ||
| How to get a real estate license in Washington D.C. | DC Salesperson guide | Not Specified | Yes or GED | Not Specified | Not Specified | 60 hours | Salesperson | 15 every 2 years | DC | ||
How Long Does Real Estate School Take?
If you’re wondering how long a real estate course is, it can be from three credit hours per college course to 168 hours for the pre-licensing course. Luckily, there’s 168 hours in a week, so you can get real estate courses done in a month no matter what state you're in. Most allow online courses. Iowa definitely requires in-person real estate courses for a portion of their real estate pre-licensing courses, but others might have other flexibilities. Make sure to check your state’s full requirements in the table above.Step 2. How to Get a Real Estate License
Getting a new real estate license has other basic requirements including:
- A high school diploma or GED
- Pass the real estate exam
- Submit fingerprints
- Pass background checks
- Find a broker sponsor if required
- Get errors & omissions insurance if required (Our preferred insurance provider is Simply Business.)
- Turn in the application and pay the fee
- Take continuing education classes
Real Estate Exam
After you complete your real estate school, you’ll need to take a proctored real estate licensing exam. The states use one of three providers for the real estate exam: [su_note note_color="#dbeafc"]- Pearson Vue
- PSI
- AMP
- National portion: Licensing exam focused on the general business tools and knowledge you will need for a successful career in any state. You’ll need to understand terms like sales agents, listing brokers, asking price, sales price, and other real estate terms that are consistent in any state.
- State exam: Licensing exam focused on professional regulation in your specific state. These are critical to understand before sales agents perform their first transaction for clients.
How Long Does It Take To Get a Real Estate License?
Becoming a real estate agent will normally take three to six months from the time you complete the real estate pre-licensing course until the time you are able to work as a sales agent in a real estate brokerage. Next, you’ll need to find brokers to learn from so you can feel confident as you start interacting with potential buyers, sellers, and get your first real estate transaction under your belt.Step 3. Find a Broker
- Caps: What is the maximum I have to pay each year to a broker?
- Splits: What percentage of each paycheck goes to the cap?
- Additional Fees: Are there any fees that I need to know?
- Growth: What opportunities are there to grow beyond just selling real estate?
- Training: How do you help new agents adjust to all your systems?
- Earnings: What are the highest and median pay of agents under you?
Find a mentor
Looking for a mentor can be highly beneficial to new agents. Santino told us: [su_quote]Look for a mentor. The pay won’t be great. It takes at least a year or two.[/su_quote] He suggested researching the brokerages in your area that seem to have a good brand. Working for a more experienced agent will help you learn how to become a millionaire real estate agent.Step 4. Secure Clients
Finding clients can be hard until you develop a reputation for yourself. Santino suggests working with a team but warned us to be cautious: [su_quote]Join a team. Be wary though. If they don’t give you credit for the sales, it won’t build your resume.[/su_quote] He also explained that a large portion of securing clients is getting your name out there as a successful real estate agent on Google and seeing where they are listed. Then make sure you are on all those platforms, too. The screenshot below shows all of Santino Filipelli’s web presence.
Step 5. Close Deals
Once you’ve found clients, you want to focus on helping them buy or sell a house. That means you’ll need to do things like:- Show homes
- Submit and review offers
- Help clients secure financing
- Communicate with escrow and inspectors
- Close on the property
Systemize the Real Estate Business
Santino told us every agent should consider adding the following people or systems to their business to let them focus on serving the customers more:
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- Setup a CRM
- Get a virtual or real assistant
- Hire a transaction coordinator
- Hire people for outbound calls
How to Become a Real Estate Agent with No Experience
You don’t need experience to become a real estate agent. You just need to go through the real estate licensing process. That means:- Take the required pre-license courses.
- Pass the real estate exam.
- Pass a background check.
- Get your Errors and Omissions insurance.
- Get your license.
How to Become a Luxury Real Estate Agent
Luxury real estate agents follow the same process as any other agent, but are focused on providing services to high net worth individuals. That means you’ll need to carry yourself more professionally, have a nicer car, speak with proper grammar, and network at higher end locations than other agents.How to Become a Commercial Real Estate Agent
Becoming a commercial real estate agent follows the same process as other real estate agents. You’ll want to focus your continuing education on commercial real estate and try to get on with some of the commercial real estate companies like CBRE and Colliers.How to Become a Millionaire Real Estate Agent
Becoming a millionaire real estate agent just requires selling lots of houses. Realistically, to make $1 million from commissions, you would need approximately $50 million in sales. To make $1 million after expenses and taxes, you need to sell approximately $109 million in sales. If you are investing profits to earn higher returns, you can reduce these numbers dramatically.How to Become a Real Estate Agent Part Time
You can become a part-time real estate agent by taking the necessary classes and the state licensing exam, then get your license. Most real estate agents are their own boss, so you control the hours. It might be harder to find a broker and make a profit if you only work part time, though.How to Become a Real Estate Agent without a Degree
Real Estate agents don’t have to go to four year colleges in most states. Most only have to take a few courses to get started. People who get majors or master’s degrees in real estate tend to have better connections and make more money, though.How to Become a Real Estate Broker
Becoming a broker requires more education and experience than a real estate agent. They also have to take a different exam. The primary difference between a broker and salesperson or agent is that the broker can: [su_note note_color="#dbeafc"]- Offer price opinions
- Supervise agents
- Perform all roles an agent can
- Manage property assets
[/su_note]
Santino’s Favorite Books
At UpFlip, we believe that reading is an important part of your growth so we ask each business owner what their favorite books are and share them with you. Santino suggested the following books. If you haven’t picked these up, grab them today: Check out the interview we've done with Santino's on our YouTube channel: [su_youtube url="https://www.youtube.com/watch?v=qhvLB-MtVnY"]Are you ready to start your real estate career?
Real estate can be a highly rewarding field because you get to help people become homeowners. It can also be stressful because you work weird hours and buying a home is one of the biggest decisions most people make. As long as you’re willing to put in the work, are fairly pleasant, and responsible you can make a decent living as a real estate agent. Where are you thinking about getting into real estate? If you’re already in the industry what tips do you have for new agents?
Running a business is hard work! You dedicate most of your waking life to it, and 80% of the time, it fails. Why do so many talented people fail? It's because they don't use the power of passive income to build wealth by working smarter instead of harder.
We’ve made your search for the perfect passive income stream easy by narrowing the list to the top 41 ideas. We’ve even got lesser-known passive income ideas (who knew you could create and sell Alexa skills?) and work-from-home options that’ll bring in $10K+ a month (just by creating digital files!).
We’ll also map out a plan for getting your business started so you can start earning passive income right away.
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Get ready to find out:
The Internal Revenue Service (IRS) defines passive income as income that meets two standards:
Remember to read IRS Publication 925 to learn about the tax treatment when you earn passive income.
There are a lot of ways to generate passive income, but here’s Graham’s method:
[su_quote]Find the intersection of what you love and can make money on. It will never dry up.[/su_quote]
He also explained that automation plays a huge role in generating passive income, so you'll want to consider that in your decision-making process. In addition, you might want to consider whether you have the starting capital to create a passive income stream.
Don't worry if you don't have a lot of money left over from your active income. You can start generating passive income with an initial investment of $50 or less.
Pros:
Pros:
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Upfront time investment: High
Upfront financial investment: $500-$50,000
Passive income potential: High ($50K+ per month)
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You can start an e-commerce store with dropshipping or print-on-demand options to earn passive income. The initial investment is essentially free, but you need to have the money for advertising, the initial cost of the products, and the monthly software costs. Find out how to get started in ecommerce.
Custom apparel is a popular niche for print-on-demand passive income businesses, and one with a high revenue potential. 1-800-Tshirts, for example, brings in $500K every month. You can hear how founder Tom Rauen started and his advice for growing a t-shirt printing business in this interview.
Kerry Egeler founded Shirt School as a resource for online t-shirt printing business owners, so that’s a great site to check out if you want to explore this option (hear our interview with Kerry).
Etsy is a popular store platform for custom designed products. That’s where Vlad Kuksenko sells his custom pet tags and collars. Hear advice on how to get started on Etsy in Vlad’s podcast and YouTube interviews.
Heather Johnson chose Etsy for her print-on-demand business, too, which she started as a side hustle in 2020 and has grown to revenue of $15,000+ a month (listen to our interview with Heather).
Pros:
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Upfront time investment: Low
Upfront financial investment: $25-$10,000
Passive income potential: 4%-7% of investment
[/su_note]
Bonds are a way to lend money. A company or government asks for an upfront investment and agrees to pay you back more than you lent them. The payment terms will vary based on the amount borrowed, the duration, and the borrower's creditworthiness.
The gold standard of bonds are purchased from U.S. Treasury Direct.
Pros:
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Upfront time investment: Low
Upfront financial investment: Your choice
Passive income potential: 0.15%-5% of investment
[/su_note]
These accounts are offered by legacy and online banks and give customers higher interest rates than you would normally receive. (None of the earning rates beat inflation, though. The best current high-yield savings account earns 3.5% APY, which means you're still losing money after calculating inflation.)
Money market accounts are currently earning 4.45% annually. You can find them by unchecking the savings account box in the link above.
While these are highly liquid, they don’t generate enough passive income to satisfy my expectations of growing wealth.
Pros:
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Upfront time investment: Low
Upfront financial investment: $25 minimum
Passive income potential: 6.46%-17.74% of investment
[/su_note]
If you just want to earn some passive income on your existing cash, peer-to-peer lending can give you great returns. The lending agreements you fund at Lending Club provide interest rates of up to 17.74%. Take note that higher earnings come with higher risks (borrowers with lower credit scores), so it might not be the best idea to go straight for the 17.74% interest rates because Lending Club takes 30% of the loan for themselves if they have to pursue collection.
Pros:
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Upfront time investment: High
Upfront financial investment: Low ($150-$300/month)
Passive income potential: Medium-High ($500-$10K+ per month)
[/su_note]
An online course is one of the most profitable and popular passive income ideas. When Graham Cochrane lost his job, he expected to make money mixing music, but he quickly found that people were more interested in learning how to do it themselves and were willing to pay to learn those skills. Graham created a course that made over a million dollars—without ever updating it.
Jacques Hopkins of Piano in 21 Days saw similar success with his online course, starting off with a budget of around $150 a month and growing to a $40,000 a month revenue, about 50% of which is profit (listen to our interview with Jacques to hear more of his advice and story).
Today's environment is more competitive, but it's still one of the best ways to make passive income in 2024.
Pros:
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Upfront time investment: Low
Upfront financial investment: $5,000 minimum
Passive income potential: 12% of investment
[/su_note]
If you are an accredited investor, you can invest in the future by helping promising students go to college. Loan them money, wait a year, then earn interest by getting a percentage of their future income. You can use sites like these to get started:
Pros:
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Upfront time investment: Low
Upfront financial investment: Your choice
Passive income potential: up to 20% of investment
[/su_note]
This section is solely the opinion of the author and does not represent the beliefs of UpFlip, its owners, or any other members of the team.
Personally, I enjoy the crypto and NFT markets for high liquidity and income generation. They are highly volatile, which means you can trade them for quick 20% gains, but you can also hold them or provide the resources to operate the network. The safest of these investments to invest in are BTC and ETH, but both have been known to skyrocket or plummet more than 20% in a day.
If you invest in any crypto, understand that you do so at your own risk. These investments are unregulated, and you are effectively going into private equity without the regulatory environment that protects accredited investors. That said, my personal favorite projects are:
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Upfront time investment: Medium
Upfront financial investment: Low to none
Passive income potential: 15%-45% of sales ($.05-$.25 per image per month on average)
[/su_note]
If you love photography but want to avoid taking on clients, stock photos might be your answer. Stock photos are used by businesses for marketing purposes. You take pictures of in-demand products and post them on the site with keywords that describe them. Then companies pay to use them.
There are a variety of sites that you can use to earn a passive income stream, but Getty Images is the leader in this market. You can earn up to 45% on each image used, which converts to $.015 and up.
Other stock photo websites have different rates, but Getty sells approximately $1 billion of stock photos, graphics, and videos each year.
Pros:
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Upfront time investment: High
Upfront financial investment: $0
Passive income potential: 35%-70% royalties
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E-books are another great way you can make a passive income from your upfront time investment. Publishing has always been challenging, but now tools like AI copywriters and Audible make it where you can get in front of billions of potential customers without printing a single page.
Graham told us:
[su_quote]I wrote a book called How to Get Paid for What You Know.[/su_quote]
Download it on Audible for more advice on how to earn a passive income from e-books and online courses.
Pros:
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Upfront time investment: Medium
Upfront financial investment: Low ($50-$500)
Passive income potential: $1,000-$100K+ per month
[/su_note]
Another way to create a passive income is to create an affiliate marketing business. You can easily get links for most software companies and start adding passive income streams by reviewing the software you use everyday.You'll be adding value for the people following you while you gain passive income.
Many affiliate programs can make thousands or millions from a few hours of work. Check out some of the best affiliate programs of 2024 or listen to our interview with Matt Diggity to learn more about affiliate marketing.
Pros:
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Upfront time investment: High
Upfront financial investment: $0
Passive income potential: 40%-60% of streaming revenue
[/su_note]
If you're a musician or want to help musicians earn a living, you can earn a passive income from licensing your music to movies, streaming services, and businesses. You get paid every time someone plays the song. You can find out how to make passive income online through different streaming platforms.
Pros:
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Upfront time investment: High
Upfront financial investment: $0
Passive income potential: $800-$1,400 per month
[/su_note]
Blogging and YouTube channels are passive income ideas that require similar skill sets. You'll need to provide useful information, optimize it for search results, and share it. Sure, the equipment is different, but either option can make you a ton of extra money. It’s quite easy to create a YouTube channel.
Pros:
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Upfront time investment: Low
Upfront financial investment: $0
Passive income potential: Medium (up to $4,000 per month)
[/su_note]
If you have tools or other useful household items, you can rent them out to other people using a variety of sites. Check out sidehusl’s blog for a list of sites to rent specific items.
Pros:
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Upfront time investment: Low
Upfront financial investment: $10-$200+ per site
Passive income potential: High
[/su_note]
Did you know that buying a website and selling it could make you up to $90 million?
That's how much Vegas.com paid to purchase LasVegas.com. If you find a website that you can imagine being a desired domain name, buy it and save it until a company is willing to pay way more for it.
You can monetize those websites while you own them, too. Rob Stefanski currently owns seven websites that generate about $30,000 every month in revenue. You can listen to his podcast interview to hear his insights on how to buy, grow, and scale revenue for a website.
Pros:
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Upfront time investment: Medium
Upfront financial investment: $2,000-$120,000
Passive income potential: High ($10K+ per month)
[/su_note]
Vending machines are another source of income. For those wondering how to create passive income from vending machines, check out our vending machine business course taught by Adam Hill, who turned an investment of $120K into $600K of annual revenue.
Insert sign up for the Vending Machine Boot camp.
Pros:
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Upfront time investment: Low
Upfront financial investment: $0
Passive income potential: $100-$900 per month
[/su_note]
Your car can be a source of multiple streams of income. You can advertise your own businesses or earn easy passive income by advertising other brands. Some providers to check out include:
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Upfront time investment: Low
Upfront financial investment: Your choice
Passive income potential: 2.91%-6.1% of investment
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Robo-advisors are apps that automatically pick investments and manage your portfolio. All you do is answer a few questions about your risk tolerance and investment goals, and their algorithms take care of the rest. Credit Donkey’s list of the best robo advisors is a great place to start if you’re looking for more information.
Pros:
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Upfront time investment: Medium
Upfront financial investment: up to $1,000 for initial inventory
Passive income potential: High ($30K+ per month)
[/su_note]
The old adage that one man’s trash is another man’s treasure is true and can be a great way to earn income if you have a sharp eye for products that will sell.
Mike Wilson’s story is a prime example. He started an eBay store to resell items after retiring from his career as a furniture store owner. After investing $1,000 into his initial inventory, he now makes around $30,000 every month with his eBay store. Hear more about how Mike built his online store in his podcast interview.
You can find items to resell for cheap at thrift stores, garage sales, or storage unit auctions. Sites like Craigslist and Facebook’s marketplace sometimes even have free items available, or you could sell unused items from around your home. While you will need to invest some time into acquiring your inventory, it’ll be on your schedule, and the income is still primarily passive.
Pros:
[su_note note_color="#dbeafc"]
Upfront time investment: Low
Upfront financial investment: Your choice
Passive income potential: .15%-5% of investment
[/su_note]
A Certificate of Deposit (CD) is a savings product sold by banks, credit unions, and other financial institutions. The main difference between CDs and savings accounts is that CDs have a fixed term and interest rate.
CD laddering is an approach to maintain your liquidity while investing in CDs. Basically, you invest in a few different CDs with varying terms. As each matures, you can choose whether to keep that money or reinvest it into a new CD. These investments are insured by the FDIC so your principal is protected, a key advantage over more volatile forms of investment.
Pros:
[su_note note_color="#dbeafc"]
Upfront time investment: Low
Upfront financial investment: $20 minimum
Passive income potential: 15% of investment
[/su_note]
KickFurther.com is a unique concept in crowdsourced small business financing. Business owners sign up for funding, and investors provide those funds by essentially buying their inventory and selling it through them on consignment. Your profit is earned once the products sell. Kickfurther sellers also get their own store on the site where you can help sell the inventory you purchased and get an extra 5% commission on any items sold through it.
Pros:
[su_note note_color="#dbeafc"]
Upfront time investment: Low
Upfront financial investment: $0
Passive income potential: $850-$7,500+ per month
[/su_note]
The website Turo uses a similar model to vacation rental sites like Airbnb, but with cars instead of homes. Hosts list their cars on the site and travelers who need a vehicle reserve them for a fee. You can host one car or several, making it a scalable passive income source for those who want something they can grow to replace a full-time job.
While there is some risk of your car being damaged while someone’s using it, Turo provides liability insurance coverage up to $750,000, so you won’t be on the hook for repairs if they do.
There are other places you can rent out your car, too:
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Upfront time investment: Low to Medium
Upfront financial investment: $0
Passive income potential: $50-$1,500+ per month
[/su_note]
There are a few different ways you can go about this. If you have an unused vacation home, extra rooms in your main home, or under-utilized spaces like a garage or pool house you can turn into a micro-apartment, you can rent it out to travelers on sites like Airbnb or Vrbo.
Travelers aren’t the only people who need to rent space, either. On Neighbor, you can rent out space storage space, whether that’s interior storage for people’s possessions or business inventory, or an outdoor lot where people can park cars, boats, RVs, and trailers.
This is a great option for homeowners who have extra space in an attic, garage, basement, or unused room but don’t want to worry about preparing that space for other people to inhabit.
Pros:
[su_note note_color="#dbeafc"]
Upfront time investment: Low
Upfront financial investment: $0
Passive income potential: $50-$300 per month
[/su_note]
If you live in an urban area, especially close to a place where people congregate like a sports venue, fairground, or other event space, you can monetize your parking space for a bit of extra income. Apps like Pavemint and CurbFlip make this easy. All you have to do is list your space and drivers reserve and pay for it right through the app.
Pros:
[su_note note_color="#dbeafc"]
Upfront time investment: Medium-High
Upfront financial investment: $200,000+
Passive income potential: High ($24K+ per month)
[/su_note]
Everyone needs to do their laundry, and not everyone has a machine to do it at home. Everything in a coin-op laundromat is automated, and it’s common for them to operate without employees on-site to supervise. If you hire someone to clean and maintain the machines it’s a completely passive business, and that won’t be much of a time commitment if you handle it yourself.
Like any brick-and-mortar business, a laundromat can be a big investment. Brian Riseland invested $1 million to open Laundry Genius (watch his YouTube interview).
[su_youtube url="https://www.youtube.com/watch?v=0aEcWTxnLUI"]
Note that his space is larger than most, which means higher revenue potential. While you don’t necessarily need to make a 7-figure investment, it’s common for turnkey laundromat operations to cost between $200,000 and $500,000.
If you’re interested in opening a laundromat, the how-to guide on the UpFlip blog is a great place to get more info.
Pros:
[su_note note_color="#dbeafc"]
Upfront time investment: Medium
Upfront financial investment: $100-$1,000
Passive income potential: $1,000-$50K+ per month
[/su_note]
Dropshipping is basically like being a professional middleman. You take orders from customers, then send them along to a wholesaler, manufacturer, or other retailer who sends the ordered item to the customer.
The big advantage of dropshipping is that you never have to worry about inventory. All you have to do is list the items in your store and market to potential customers. There are software and tools you can use to automate many of these tasks.
Amazon and Shopify are the two largest platforms for dropshipping businesses. Multi-million dollar Amazon seller Ryan Hogue started his Ryan’s Method Passive Income School based on his success with a dropshipping eCommerce business, and you can hear his advice on how to start in our podcast interview.
Pros:
[su_note note_color="#dbeafc"]
Upfront time investment: High
Upfront financial investment: $0
Passive income potential: $100-$10K+ per month
[/su_note]
Devices that use Alexa voice control have “skills” that allow them to perform different tasks, like playing music or turning connected devices off and on. Anyone can create the skills and get paid for them. While you will need some software development skills to do so, Amazon has partnered with Codeacademy to create free courses that will teach you the basics.
Payment for skills is based on user engagement. The more popular the skill, the more you can earn from it. Skills can also be monetized by adding in-skill purchases.
Pros:
[su_note note_color="#dbeafc"]
Upfront time investment: High
Upfront financial investment: $100-$5,000
Passive income potential: $100-$500 per app per month on average
[/su_note]
Everyone who has a smartphone is a potential customer for mobile apps. If you can solve a problem or make an entertaining game it can quickly get thousands of downloads, even if it’s targeted to a very specific niche.
You don’t need to be a programmer to write an app, either, thanks to low-code and no-code platforms. NeoITO has a list of the best free platforms for non-coders to develop apps if this is something that interests you.
Pros:
[su_note note_color="#dbeafc"]
Upfront time investment: High
Upfront financial investment: $0
Passive income potential: $5-$10 per subscriber per month
[/su_note]
Subscription-based newsletters can be very lucrative if they provide readers with consistent value. You can also monetize your newsletter by including affiliate links or selling advertising space once you have an established audience.
Like other content-based income streams, it can take a lot of time and hard work to create valuable newsletters and build a subscriber base. If you don’t want to start from scratch, you can buy a newsletter from a marketplace like Duuce.
Pros:
[su_note note_color="#dbeafc"]
Upfront time investment: Low
Upfront financial investment: $50-$500 minimum investment
Passive income potential: 10%-25% of investment
[/su_note]
Lack of capital is one of the biggest challenges many entrepreneurs face when starting a business. Equity crowdfunding is one way for them to access the funds they need, and you don’t need to be an accredited investor to get in on the action.
There are a variety of equity crowdfunding platforms where you can become an angel investor with just a few hundred dollars in capital:
[su_note note_color="#dbeafc"]
Upfront time investment: Medium-High
Upfront financial investment: $0
Passive income potential: $50-$10K+ per month
[/su_note]
You’ve likely seen the online marketplaces of fonts, website and store themes, and other graphics and illustrations. These are often made by independent artists and designers who can make extra income selling their digital files through a platform like Creative Market.
This isn’t just an option for artists. You can also sell spreadsheet templates, patterns for crafts, PDFs, or templates for business cards, invitations, or greeting cards. If it’s something people need and will search for online, you can sell it for extra income.
Some other sites to check out if this seems like something you want to do:
[su_note note_color="#dbeafc"]
Upfront time investment: High
Upfront financial investment: $0
Passive income potential: $10 (<1,000 followers)-$10K (>500,000 followers) per post
[/su_note]
If you’re already active with a large following on social media, you can leverage that following into passive income by becoming an influencer. Influencers are paid to promote products, services, and companies through their social media channels using reviews, promotional posts, or ads inserted into their posts, blogs, and videos.
Sites like Heepsy and Upfluence connect influencers with people who need their services and can help you build your reputation as an influencer. While the highest-paid influencers have 100,000 followers or more, you can become a micro-influencer with as few as 1,000 followers.
Pros:
[su_note note_color="#dbeafc"]
Upfront time investment: Medium-High
Upfront financial investment: Low
Passive income potential: $.50-$30 per lead
[/su_note]
A lead is a potential customer or sales contact. Companies get leads through their website, online ads, and ranking high on search results. Larger companies often have teams devoted to lead generation and management, but smaller businesses don’t have those resources, and instead pay third-party freelancers or agencies to do it for them.
If you have a strong understanding of digital marketing, SEO, and web development, you can use those to gather leads and sell them to businesses. The industries that pay the most for these are home services, insurance, and lending companies, so it can be beneficial to have expertise in those areas.
Pros:
[su_note note_color="#dbeafc"]
Upfront time investment: Low-Medium
Upfront financial investment: $0
Passive income potential: $10-$100 per month
[/su_note]
Do you want to get paid for doing things you already enjoy? There are a plethora of apps that let you do just that. While many of the apps you’ll find on passive income earning lists are investment platforms, there are other options. Some of the most popular include:
[su_note note_color="#dbeafc"]
Upfront time investment: Low
Upfront financial investment: $0
Passive income potential: $.50-$5 per survey
[/su_note]
Companies need feedback from users and customers to improve their products and services, and they’re willing to pay for that information. Taking online surveys doesn’t generate a ton of money, but if you enjoy doing them, it’s a way to make a bit of extra cash just by sharing your opinions.
The Swagbucks and InboxDollars apps listed above are two places you can do this. Some other popular and reputable survey-for-cash sites include Survey Junkie, Pinecone Research, and MyPoints.
Pros:
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Upfront time investment: Low
Upfront financial investment: $0
Passive income potential: 1%-10% of what you spend
[/su_note]
Getting money back for the things you buy is one of the easiest forms of passive income. The only caveat here is that you’ll need to make sure you only buy what you can pay off right away, before you’re hit with interest that wipes out those savings. Look for a card with no annual fees. Many also offer a sign-up bonus of $200-$300. Nerdwallet’s list of cashback credit cards is a great way to compare your options.
Pros:
[su_note note_color="#dbeafc"]
Upfront time investment: Low
Upfront financial investment: $0
Passive income potential: 1%-30% of what you spend
[/su_note]
Another way to get paid for the things you already buy is through discount and reward websites and apps. Like with cashback credit cards, you want to be careful you’re not overspending in your quest for rewards. For the things you already buy, though, you can access them through an app or website to get as much as 20% of your purchase back, which translates to more money in your pocket.
Some of the most popular sites for this:
[su_note note_color="#dbeafc"]
Upfront time investment: Medium
Upfront financial investment: $10,000-$100,000
Passive income potential: High ($10K+ per month)
[/su_note]
People with vehicles need a place to park them, and the larger the vehicle, the more limited their options. Undeveloped lots are cheaper than commercial property with structures, giving this a lower financial barrier to entry than other brick-and-mortar options on this list. Once you have the lot set up, you can automate the space booking process or hire a few employees to supervise and maintain the space to make it a fully-passive income stream.
Pros:
Create your own avatar profile with this template.
To earn passive income, you'll want to have a customer avatar. There are two ways you can create the customer avatar depending on what kind of passive income streams you pursue:
This is where those who shine at running business ventures or creating passive income differentiate themselves from those who fail. You need a system in place. Otherwise you'll burn out.
Graham started his first passive income stream with the following tech stack:
You'll want to collect email addresses to communicate with your followers. Kajabi has built-in email collection and is really intuitive. You can even take the Kajabi Academy List Building Course to learn the best ways to build an email list using their platform.
If you prefer MailChimp, they also offer educational resources on using their platform. Here are the main things you need to know about any email list:
At this point, you've learned:
- What is passive income?
- How to earn passive income
- Passive income ideas that can make millions
- How to create a passive income stream
- How to generate passive income: a case study
What is Passive Income?
The Internal Revenue Service (IRS) defines passive income as income that meets two standards:
Remember to read IRS Publication 925 to learn about the tax treatment when you earn passive income.
How to Earn Passive Income
According to Graham Cochrane, whose blogs and courses are raking in more than $1M each year, the process for earning passive income is quite simple. Here are the steps to succeed:- Explore passive income stream ideas
- Perform market research
- Create a customer avatar
- Build the system
- Create content or ads
- Gather emails
- Convert followers to customers
Passive Income Stream Ideas
There are a lot of ways to generate passive income, but here’s Graham’s method:
[su_quote]Find the intersection of what you love and can make money on. It will never dry up.[/su_quote]
He also explained that automation plays a huge role in generating passive income, so you'll want to consider that in your decision-making process. In addition, you might want to consider whether you have the starting capital to create a passive income stream.
Don't worry if you don't have a lot of money left over from your active income. You can start generating passive income with an initial investment of $50 or less.
What do passive income ideas require?
As you consider each idea, you'll want to weigh the following factors:- Upfront time investment
- Upfront investment funds
- Potential for income
#1: Single-Family Rental Properties
[su_note note_color="#dbeafc"] Upfront time investment: Medium to High Upfront financial investment: $100,000+ if investing independently Passive income potential: High ($10K+ per month) [/su_note] Real estate investing is a great source of cash flow and wealth building. It is the number one source of wealth building in the United States according to the Census Bureau. Find out how Mike Andes approaches rental properties in our interview below. [su_youtube url="https://youtu.be/AXeqIxPVn6A"] Emma Powell has turned real estate investing into a 100% passive income stream, and shared her advice on getting started in an UpFlip podcast interview. You'll need to hire a property management team if you want cash flow without managing the property. Make sure you aim for 10%+ annual returns on investment. Pros:- Builds long-term wealth along with short-term rental income
- Very high-income potential if you invest in multiple properties
- Potential for a 100% passive income once your business is established
- Large initial investment if you’re buying properties
- You need employees from the start to make it truly passive
#2: Dividend Stocks
[su_note note_color="#dbeafc"] Upfront time investment: Low Upfront financial investment: Your choice Passive income potential: 10%-15% of investment [/su_note] Many publicly held companies pay dividends on a quarterly, monthly, or annual basis. These dividend stocks can create passive income that increases the longer you hold them. If you use a brokerage account that offers a dividend reinvestment plan (DRIP), you can increase your:- Passive Income: Through routine payouts
- Asset Value: If the stock price goes up, your net worth goes up. Historically, the stock market has increased by 10% per year. That means stocks tend to double in value every seven years.
- Number of Shares: Every time you get a dividend, a DRIP reinvests that income into the dividend stocks, which earns you more passive income.
Pros:
- You don’t need tons of money to start
- 100% passive using a brokerage service
- Low risk compared to other investment options
- Long-term investment that won’t bring immediate returns
#3: Real Estate Investment Trusts (REITs)
[su_note note_color="#dbeafc"] Upfront time investment: Low Upfront financial investment: $1,000-$25,000 Passive income potential: 10%-15% of investment [/su_note] You can buy real estate investment trusts to generate passive income. REITs invest in real estate and earn money from rental income. They then pass the gains on to the investors. You can buy REITs as stocks or use private equity. Publicly available stocks tend to pay investors less but have the advantage of being more liquid than private equity investments. We filtered the available TD Ameritrade dividend stocks down to monthly dividends because this is the easiest way to identify REITs in their system. Here are the top monthly dividends on TD Ameritrade:
Pros:
- More liquid than other real estate investments
- Completely passive income with a low up-front time commitment
- Affordable way to get into real estate investing
- Your investment could be affected by real estate market trends and interest rate changes
- Can take a long time to see significant returns
#4: Custom-Designed Products
[su_note note_color="#dbeafc"]
Upfront time investment: High
Upfront financial investment: $500-$50,000
Passive income potential: High ($50K+ per month)
[/su_note]
You can start an e-commerce store with dropshipping or print-on-demand options to earn passive income. The initial investment is essentially free, but you need to have the money for advertising, the initial cost of the products, and the monthly software costs. Find out how to get started in ecommerce.
Custom apparel is a popular niche for print-on-demand passive income businesses, and one with a high revenue potential. 1-800-Tshirts, for example, brings in $500K every month. You can hear how founder Tom Rauen started and his advice for growing a t-shirt printing business in this interview.
Kerry Egeler founded Shirt School as a resource for online t-shirt printing business owners, so that’s a great site to check out if you want to explore this option (hear our interview with Kerry).
Etsy is a popular store platform for custom designed products. That’s where Vlad Kuksenko sells his custom pet tags and collars. Hear advice on how to get started on Etsy in Vlad’s podcast and YouTube interviews.
Heather Johnson chose Etsy for her print-on-demand business, too, which she started as a side hustle in 2020 and has grown to revenue of $15,000+ a month (listen to our interview with Heather).
Pros:
- High income potential
- Start earning income as soon as your store opens
- Excellent option for creative entrepreneurs and designers
- Building a customer base can require a high initial time commitment
#5: Bonds and Bond Index Funds
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Upfront time investment: Low
Upfront financial investment: $25-$10,000
Passive income potential: 4%-7% of investment
[/su_note]
Bonds are a way to lend money. A company or government asks for an upfront investment and agrees to pay you back more than you lent them. The payment terms will vary based on the amount borrowed, the duration, and the borrower's creditworthiness.
The gold standard of bonds are purchased from U.S. Treasury Direct.
Pros:
- Very low risk investment
- Funds can be reinvested to increase earnings over time
- 100% passive
- You don’t see any earnings until the bond matures
- Interest rates are locked at the rate from when you bought the bond (even if they go up later)
#6: High-Yield Savings Accounts and Money Market Funds
[su_note note_color="#dbeafc"]
Upfront time investment: Low
Upfront financial investment: Your choice
Passive income potential: 0.15%-5% of investment
[/su_note]
These accounts are offered by legacy and online banks and give customers higher interest rates than you would normally receive. (None of the earning rates beat inflation, though. The best current high-yield savings account earns 3.5% APY, which means you're still losing money after calculating inflation.)
Money market accounts are currently earning 4.45% annually. You can find them by unchecking the savings account box in the link above.
While these are highly liquid, they don’t generate enough passive income to satisfy my expectations of growing wealth.
Pros:
- Minimal risk
- Easy to set up and manage
- Low minimum investment with few to no fees
- Wide variety of online banking options to choose from
- Lower return than other investment options
#7: Peer-To-Peer (P2P) Lending
[su_note note_color="#dbeafc"]
Upfront time investment: Low
Upfront financial investment: $25 minimum
Passive income potential: 6.46%-17.74% of investment
[/su_note]
If you just want to earn some passive income on your existing cash, peer-to-peer lending can give you great returns. The lending agreements you fund at Lending Club provide interest rates of up to 17.74%. Take note that higher earnings come with higher risks (borrowers with lower credit scores), so it might not be the best idea to go straight for the 17.74% interest rates because Lending Club takes 30% of the loan for themselves if they have to pursue collection.
Pros:
- Easy to invest through a P2P platform
- Low ongoing time commitment
- Borrowers are vetted through the platform
- Higher interest rates carry more risk
- No collateral on loans
#8: Create an Online Course
[su_note note_color="#dbeafc"]
Upfront time investment: High
Upfront financial investment: Low ($150-$300/month)
Passive income potential: Medium-High ($500-$10K+ per month)
[/su_note]
An online course is one of the most profitable and popular passive income ideas. When Graham Cochrane lost his job, he expected to make money mixing music, but he quickly found that people were more interested in learning how to do it themselves and were willing to pay to learn those skills. Graham created a course that made over a million dollars—without ever updating it.
Jacques Hopkins of Piano in 21 Days saw similar success with his online course, starting off with a budget of around $150 a month and growing to a $40,000 a month revenue, about 50% of which is profit (listen to our interview with Jacques to hear more of his advice and story).
Today's environment is more competitive, but it's still one of the best ways to make passive income in 2024.
Pros:
- Easy to publish and market your course through an online course platform
- 100% passive income once the course is published
- Income is scalable with high profit margins
- High initial time commitment if you’re writing the course yourself
- Course platforms charge fees that can cut into your profits
#9: Student Income-Share Agreements (ISAS)
[su_note note_color="#dbeafc"]
Upfront time investment: Low
Upfront financial investment: $5,000 minimum
Passive income potential: 12% of investment
[/su_note]
If you are an accredited investor, you can invest in the future by helping promising students go to college. Loan them money, wait a year, then earn interest by getting a percentage of their future income. You can use sites like these to get started:
Pros:
- 100% passive once you’ve invested
- Get monthly payouts after the first year
- Shorter duration than other investment options
- Can lose your investment if the borrower defaults
- Fees are relatively high (up to 4% on investment plus 5% of cash flows)
#10: Invest in Digital Assets (Crypto/NFTs)
[su_note note_color="#dbeafc"]
Upfront time investment: Low
Upfront financial investment: Your choice
Passive income potential: up to 20% of investment
[/su_note]
This section is solely the opinion of the author and does not represent the beliefs of UpFlip, its owners, or any other members of the team.
Personally, I enjoy the crypto and NFT markets for high liquidity and income generation. They are highly volatile, which means you can trade them for quick 20% gains, but you can also hold them or provide the resources to operate the network. The safest of these investments to invest in are BTC and ETH, but both have been known to skyrocket or plummet more than 20% in a day.
If you invest in any crypto, understand that you do so at your own risk. These investments are unregulated, and you are effectively going into private equity without the regulatory environment that protects accredited investors. That said, my personal favorite projects are:
- Presearch: This privacy search engine is beta testing ChatGPT, has more than 75,000 independent node operators, and acts as a search engine aggregator (It’s my secret weapon for blogs). They also offer advertising opportunities that cost as little as $6 per month. The returns vary based on the pricing, but my assets have quadrupled since 2021.
- Vaporfi: The team at VaporFi has a loyalty rewards program called Stratosphere that partners with crypto projects and business owners to provide members rewards for interacting with their partners. They also run a decentralized exchange and a residual income project, and they have a lot of other cool projects in the pipeline. I currently hold 50 times the assets within their products compared to when I started and have gotten residual income greater than my initial investment.
- Avalanche: VaporFi operates on the Avalanche network which has deals with AWS and Alibaba to launch validators. The validators process the transactions on the Avalanche network. The staking rewards are currently 8.54% per year.
- Can potentially see high returns very quickly
- High long-term growth potential
- Low time commitment to make and manage your investment
- High volatility means higher risk of losses
#11: Sell Stock Photos
[su_note note_color="#dbeafc"]
Upfront time investment: Medium
Upfront financial investment: Low to none
Passive income potential: 15%-45% of sales ($.05-$.25 per image per month on average)
[/su_note]
If you love photography but want to avoid taking on clients, stock photos might be your answer. Stock photos are used by businesses for marketing purposes. You take pictures of in-demand products and post them on the site with keywords that describe them. Then companies pay to use them.
There are a variety of sites that you can use to earn a passive income stream, but Getty Images is the leader in this market. You can earn up to 45% on each image used, which converts to $.015 and up.
Other stock photo websites have different rates, but Getty sells approximately $1 billion of stock photos, graphics, and videos each year.
Pros:
- Excellent way for creative entrepreneurs to make money with their passion
- 100% passive after images are taken and uploaded
- Easy to scale your income by adding more photos
- No need to find or communicate with clients directly
- Images need a lot of downloads to earn higher royalty rates
- Earnings are low if images don’t sell
#12: Write an E-Book
[su_note note_color="#dbeafc"]
Upfront time investment: High
Upfront financial investment: $0
Passive income potential: 35%-70% royalties
[/su_note]
E-books are another great way you can make a passive income from your upfront time investment. Publishing has always been challenging, but now tools like AI copywriters and Audible make it where you can get in front of billions of potential customers without printing a single page.
Graham told us:
[su_quote]I wrote a book called How to Get Paid for What You Know.[/su_quote]
Download it on Audible for more advice on how to earn a passive income from e-books and online courses.
Pros:
- Faster and easier than traditional book publishing
- Requires no financial investment
- Establishes you as a thought leader and helps to build a personal brand
- Significant upfront time commitment
- May need to invest lots of time in marketing if you don’t already have a following
#13: Create an Affiliate Marketing Business
[su_note note_color="#dbeafc"]
Upfront time investment: Medium
Upfront financial investment: Low ($50-$500)
Passive income potential: $1,000-$100K+ per month
[/su_note]
Another way to create a passive income is to create an affiliate marketing business. You can easily get links for most software companies and start adding passive income streams by reviewing the software you use everyday.You'll be adding value for the people following you while you gain passive income.
Many affiliate programs can make thousands or millions from a few hours of work. Check out some of the best affiliate programs of 2024 or listen to our interview with Matt Diggity to learn more about affiliate marketing.
Pros:
- Completely passive once you’re set up
- Wide variety of affiliate programs to choose from
- Make money recommending products and services you use and enjoy
- Low to no initial financial investment required
- Need a website with high traffic to earn reliable income
#14: Music Licensing
[su_note note_color="#dbeafc"]
Upfront time investment: High
Upfront financial investment: $0
Passive income potential: 40%-60% of streaming revenue
[/su_note]
If you're a musician or want to help musicians earn a living, you can earn a passive income from licensing your music to movies, streaming services, and businesses. You get paid every time someone plays the song. You can find out how to make passive income online through different streaming platforms.
Pros:
- Steady long-term source of passive income
- Build a following and gain exposure while earning royalties
- Variety of streaming platforms to choose from
- No financial investment required to get started
- Risk of your songs being pirated or copied
#15: Create a Blog or YouTube Channel
[su_note note_color="#dbeafc"]
Upfront time investment: High
Upfront financial investment: $0
Passive income potential: $800-$1,400 per month
[/su_note]
Blogging and YouTube channels are passive income ideas that require similar skill sets. You'll need to provide useful information, optimize it for search results, and share it. Sure, the equipment is different, but either option can make you a ton of extra money. It’s quite easy to create a YouTube channel.
Pros:
- Easy to monetize by integrating ads and affiliate links
- Fun way to profit from your areas of expertise
- Doesn’t take any money to get started
- Creating the content can be time-consuming
- It will likely take some time to grow your following before you see significant income
#16: Rent Out Useful Household Items
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Upfront time investment: Low
Upfront financial investment: $0
Passive income potential: Medium (up to $4,000 per month)
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If you have tools or other useful household items, you can rent them out to other people using a variety of sites. Check out sidehusl’s blog for a list of sites to rent specific items.
Pros:
- Make money from items you already own
- Easy to get started through one of the many online platforms
- Very low ongoing time commitment
- Some risk of your items being damaged or stolen
#17: Buy and Sell Websites
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Upfront time investment: Low
Upfront financial investment: $10-$200+ per site
Passive income potential: High
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Did you know that buying a website and selling it could make you up to $90 million?
That's how much Vegas.com paid to purchase LasVegas.com. If you find a website that you can imagine being a desired domain name, buy it and save it until a company is willing to pay way more for it.
You can monetize those websites while you own them, too. Rob Stefanski currently owns seven websites that generate about $30,000 every month in revenue. You can listen to his podcast interview to hear his insights on how to buy, grow, and scale revenue for a website.
Pros:
- 100% passive
- Can earn short-term income while waiting to sell
- Potential returns are high if you buy the right websites
- No limit to the number of domains you can buy
- Return on investment isn’t guaranteed
- May need to sit on a site for a while before you find a buyer
#18: Invest in Vending Machines
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Upfront time investment: Medium
Upfront financial investment: $2,000-$120,000
Passive income potential: High ($10K+ per month)
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Vending machines are another source of income. For those wondering how to create passive income from vending machines, check out our vending machine business course taught by Adam Hill, who turned an investment of $120K into $600K of annual revenue.
Insert sign up for the Vending Machine Boot camp.
Pros:
- Fairly easy to earn enough to replace a full-time job
- Variable time commitment and startup costs
- No specialized skills, knowledge, or training required
- Ongoing time commitment unless you have employees (not completely passive)
- Potentially high initial investment if you want to purchase an entire vending route
#19: Advertise on Your Car
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Upfront time investment: Low
Upfront financial investment: $0
Passive income potential: $100-$900 per month
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Your car can be a source of multiple streams of income. You can advertise your own businesses or earn easy passive income by advertising other brands. Some providers to check out include:
- Wrapify: Earn $180 to $500 per month to wrap your car in advertising.
- Carvertize: Earn up to $300 per month per campaign for car wrapping.
- FireFly: Earn up to $300 per month to have a lighted billboard on the top of your car. You must be a rideshare or taxi driver and drive over 40 hours per week.
- Play Octopus: Make an extra $100 per month plus $25 per referral by letting rideshare passengers play games on a tablet.
- Vugo: Earn Up to $300 per month from the oldest name in rideshare advertising.
- Excellent add-on revenue stream for delivery and rideshare drivers
- No ongoing time commitment once the advertising is in place
- You choose what types of ads you display and how much of your car they cover
- No permanent changes to your vehicle
- Relatively low stand-alone income source
- Won’t make much if you drive infrequently or in low-traffic areas
#20: Invest with Robo-Advisors
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Upfront time investment: Low
Upfront financial investment: Your choice
Passive income potential: 2.91%-6.1% of investment
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Robo-advisors are apps that automatically pick investments and manage your portfolio. All you do is answer a few questions about your risk tolerance and investment goals, and their algorithms take care of the rest. Credit Donkey’s list of the best robo advisors is a great place to start if you’re looking for more information.
Pros:
- No investing skills or knowledge required
- Doesn’t take much time to set up or manage
- You can invest as much or as little as you want
- Little control or customization of what you invest in
- Need to invest a lot to see significant returns
#21: Flip Items with an Online Store
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Upfront time investment: Medium
Upfront financial investment: up to $1,000 for initial inventory
Passive income potential: High ($30K+ per month)
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The old adage that one man’s trash is another man’s treasure is true and can be a great way to earn income if you have a sharp eye for products that will sell.
Mike Wilson’s story is a prime example. He started an eBay store to resell items after retiring from his career as a furniture store owner. After investing $1,000 into his initial inventory, he now makes around $30,000 every month with his eBay store. Hear more about how Mike built his online store in his podcast interview.
You can find items to resell for cheap at thrift stores, garage sales, or storage unit auctions. Sites like Craigslist and Facebook’s marketplace sometimes even have free items available, or you could sell unused items from around your home. While you will need to invest some time into acquiring your inventory, it’ll be on your schedule, and the income is still primarily passive.
Pros:
- Don’t need much money to get started
- No specialized skills or knowledge required
- High potential income that’s easy to scale
- Some ongoing time commitment to stock and manage the store
- You’ll be stuck with items you don’t need if they don’t sell
#22: Certificates of Deposit (CD) Ladders
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Upfront time investment: Low
Upfront financial investment: Your choice
Passive income potential: .15%-5% of investment
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A Certificate of Deposit (CD) is a savings product sold by banks, credit unions, and other financial institutions. The main difference between CDs and savings accounts is that CDs have a fixed term and interest rate.
CD laddering is an approach to maintain your liquidity while investing in CDs. Basically, you invest in a few different CDs with varying terms. As each matures, you can choose whether to keep that money or reinvest it into a new CD. These investments are insured by the FDIC so your principal is protected, a key advantage over more volatile forms of investment.
Pros:
- Full control over how much and where you invest
- Low risk with guaranteed returns
- A laddering approach maintains your liquidity
- Can’t access your money until the CD matures
- Interest rates are locked in until the CD matures, even if they go up after your purchase
#23: Crowdfund Small Business Inventory
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Upfront time investment: Low
Upfront financial investment: $20 minimum
Passive income potential: 15% of investment
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KickFurther.com is a unique concept in crowdsourced small business financing. Business owners sign up for funding, and investors provide those funds by essentially buying their inventory and selling it through them on consignment. Your profit is earned once the products sell. Kickfurther sellers also get their own store on the site where you can help sell the inventory you purchased and get an extra 5% commission on any items sold through it.
Pros:
- Help small businesses while you earn a profit
- Generate your own cash flow through the store
- Potential to be completely passive with no ongoing time commitment once you invest
- You won’t make money if the products don’t sell
- Limited support for buyers on the platform
#24: Rent Out Your Car
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Upfront time investment: Low
Upfront financial investment: $0
Passive income potential: $850-$7,500+ per month
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The website Turo uses a similar model to vacation rental sites like Airbnb, but with cars instead of homes. Hosts list their cars on the site and travelers who need a vehicle reserve them for a fee. You can host one car or several, making it a scalable passive income source for those who want something they can grow to replace a full-time job.
While there is some risk of your car being damaged while someone’s using it, Turo provides liability insurance coverage up to $750,000, so you won’t be on the hook for repairs if they do.
There are other places you can rent out your car, too:
- HyreCar: A site where you can rent your car to rideshare drivers.
- TravelCar: For people who travel often, this is a way to rent your car out while you’re gone, and all you have to do is park it at one of the qualifying airports.
- Earn extra revenue from vehicles you already own when they’re not in use
- Full insurance coverage for your car while others are driving it
- Complete control over who rents your car and when (no penalty for turning down a rental request)
- Risk that your vehicle will be damaged
- Can only list newer cars in good condition
#25: Rent Out Space in Your Home
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Upfront time investment: Low to Medium
Upfront financial investment: $0
Passive income potential: $50-$1,500+ per month
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There are a few different ways you can go about this. If you have an unused vacation home, extra rooms in your main home, or under-utilized spaces like a garage or pool house you can turn into a micro-apartment, you can rent it out to travelers on sites like Airbnb or Vrbo.
Travelers aren’t the only people who need to rent space, either. On Neighbor, you can rent out space storage space, whether that’s interior storage for people’s possessions or business inventory, or an outdoor lot where people can park cars, boats, RVs, and trailers.
This is a great option for homeowners who have extra space in an attic, garage, basement, or unused room but don’t want to worry about preparing that space for other people to inhabit.
Pros:
- Complete control over who uses the space when
- Easy and free to get started
- No fees unless someone is using your space
- Fast way to monetize unused space
- Some ongoing time commitment to prepare a home or room for guests
- Sharing your personal space with strangers
#26: Rent Out a Parking Space
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Upfront time investment: Low
Upfront financial investment: $0
Passive income potential: $50-$300 per month
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If you live in an urban area, especially close to a place where people congregate like a sports venue, fairground, or other event space, you can monetize your parking space for a bit of extra income. Apps like Pavemint and CurbFlip make this easy. All you have to do is list your space and drivers reserve and pay for it right through the app.
Pros:
- Fast and free to set up
- High demand in busy and urban areas
- Complete control over when you rent your space and to whom
- Relatively low earning potential
- Earnings vary widely depending on your location
#27: Open a Coin-Operated Laundromat
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Upfront time investment: Medium-High
Upfront financial investment: $200,000+
Passive income potential: High ($24K+ per month)
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Everyone needs to do their laundry, and not everyone has a machine to do it at home. Everything in a coin-op laundromat is automated, and it’s common for them to operate without employees on-site to supervise. If you hire someone to clean and maintain the machines it’s a completely passive business, and that won’t be much of a time commitment if you handle it yourself.
Like any brick-and-mortar business, a laundromat can be a big investment. Brian Riseland invested $1 million to open Laundry Genius (watch his YouTube interview).
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Note that his space is larger than most, which means higher revenue potential. While you don’t necessarily need to make a 7-figure investment, it’s common for turnkey laundromat operations to cost between $200,000 and $500,000.
If you’re interested in opening a laundromat, the how-to guide on the UpFlip blog is a great place to get more info.
Pros:
- Consistently high demand in well-populated areas
- High revenue potential
- Fully-automated processes give it a low ongoing time commitment
- Needs employees to be completely passive
- High initial investment
#28: Ecommerce Dropshipping
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Upfront time investment: Medium
Upfront financial investment: $100-$1,000
Passive income potential: $1,000-$50K+ per month
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Dropshipping is basically like being a professional middleman. You take orders from customers, then send them along to a wholesaler, manufacturer, or other retailer who sends the ordered item to the customer.
The big advantage of dropshipping is that you never have to worry about inventory. All you have to do is list the items in your store and market to potential customers. There are software and tools you can use to automate many of these tasks.
Amazon and Shopify are the two largest platforms for dropshipping businesses. Multi-million dollar Amazon seller Ryan Hogue started his Ryan’s Method Passive Income School based on his success with a dropshipping eCommerce business, and you can hear his advice on how to start in our podcast interview.
Pros:
- Highly scalable with the potential to earn a high income
- Relatively low ongoing time commitment
- Low start-up costs and overhead
- Lots of competition means you need strong marketing skills to earn a high income
#29: Create Alexa Skills
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Upfront time investment: High
Upfront financial investment: $0
Passive income potential: $100-$10K+ per month
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Devices that use Alexa voice control have “skills” that allow them to perform different tasks, like playing music or turning connected devices off and on. Anyone can create the skills and get paid for them. While you will need some software development skills to do so, Amazon has partnered with Codeacademy to create free courses that will teach you the basics.
Payment for skills is based on user engagement. The more popular the skill, the more you can earn from it. Skills can also be monetized by adding in-skill purchases.
Pros:
- Easy way for developers to make passive income
- Completely free to get started
- You don’t need to do anything once the skill is developed
- It’s up to Amazon which skills get paid, and how much
- Large upfront time investment with no guarantee of a return
#30: Create Mobile Apps
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Upfront time investment: High
Upfront financial investment: $100-$5,000
Passive income potential: $100-$500 per app per month on average
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Everyone who has a smartphone is a potential customer for mobile apps. If you can solve a problem or make an entertaining game it can quickly get thousands of downloads, even if it’s targeted to a very specific niche.
You don’t need to be a programmer to write an app, either, thanks to low-code and no-code platforms. NeoITO has a list of the best free platforms for non-coders to develop apps if this is something that interests you.
Pros:
- Low time commitment once it’s approved by the app store
- Easily scalable with the potential for high income
- In-app purchases can create income sources beyond the initial purchase
- Large initial time investment with no guarantee of a return
#31: Build or Buy a Newsletter
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Upfront time investment: High
Upfront financial investment: $0
Passive income potential: $5-$10 per subscriber per month
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Subscription-based newsletters can be very lucrative if they provide readers with consistent value. You can also monetize your newsletter by including affiliate links or selling advertising space once you have an established audience.
Like other content-based income streams, it can take a lot of time and hard work to create valuable newsletters and build a subscriber base. If you don’t want to start from scratch, you can buy a newsletter from a marketplace like Duuce.
Pros:
- Recurring monthly income from your subscriber base
- Scalable with multiple ways to monetize the content
- Can use your newsletter to promote other passive income streams like a blog, YouTube channel, or online course
- Can take a lot of time to create valuable content
#32: Invest in Startups
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Upfront time investment: Low
Upfront financial investment: $50-$500 minimum investment
Passive income potential: 10%-25% of investment
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Lack of capital is one of the biggest challenges many entrepreneurs face when starting a business. Equity crowdfunding is one way for them to access the funds they need, and you don’t need to be an accredited investor to get in on the action.
There are a variety of equity crowdfunding platforms where you can become an angel investor with just a few hundred dollars in capital:
- StartEngine: One of the largest venture crowdfunding platforms, you’ll find everything from coffee shops and clothing stores to wind turbine companies seeking funding on StartEngine. You can also invest in or trade rare collectibles on their site.
- WeFunder: A low minimum investment of $100 makes WeFunder one of the most accessible ways to become an angel investor.
- Republic: Another low-capital option, you can start with as little as $50 on Republic. Their curated list is focused on opportunities with high growth potential.
- MainVest: Focused specifically on small businesses, MainVest lets you support local entrepreneurs while you earn passive income.
- Support small businesses you believe in and earn income for doing it
- 100% passive once you’ve invested
- Potentially high long-term returns if the business takes off
- You lose your investment if the startup fails
- May take a long time to see a return on your investment
#33: Create Digital Files
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Upfront time investment: Medium-High
Upfront financial investment: $0
Passive income potential: $50-$10K+ per month
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You’ve likely seen the online marketplaces of fonts, website and store themes, and other graphics and illustrations. These are often made by independent artists and designers who can make extra income selling their digital files through a platform like Creative Market.
This isn’t just an option for artists. You can also sell spreadsheet templates, patterns for crafts, PDFs, or templates for business cards, invitations, or greeting cards. If it’s something people need and will search for online, you can sell it for extra income.
Some other sites to check out if this seems like something you want to do:
- Easy Digital Downloads: One of the most popular digital download marketplaces, boasting nearly 4 million downloads from their platform. They also have a wide range of third-party integrations and analytic tools helpful for creators.
- Gumroad: The easy sign-up process and knowledge resources on Gumroad make it ideal for new digital creators, and you can sell just about anything through their platform.
- SamCart: An all-purpose site for courses, membership subscriptions, or digital products, SamCart also has helpful resources and analytic tools. The downside is there is a membership fee to sell through their platform.
- Easy way to monetize your unique skills and knowledge
- Little to no up-front financial investment with a low overhead
- Income potential scales as you create more items to sell
- Need to sell a lot of files to make a significant income
- Risk of your content being copied or shared illegally
#34: Become a Social Media Influencer
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Upfront time investment: High
Upfront financial investment: $0
Passive income potential: $10 (<1,000 followers)-$10K (>500,000 followers) per post
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If you’re already active with a large following on social media, you can leverage that following into passive income by becoming an influencer. Influencers are paid to promote products, services, and companies through their social media channels using reviews, promotional posts, or ads inserted into their posts, blogs, and videos.
Sites like Heepsy and Upfluence connect influencers with people who need their services and can help you build your reputation as an influencer. While the highest-paid influencers have 100,000 followers or more, you can become a micro-influencer with as few as 1,000 followers.
Pros:
- Easy way to monetize a large social media following
- Try new products or services in your niche for free
- Works well in tandem with other passive income sources like courses, blogs, and YouTube channels
- Not completely passive since you’ll need to actively post engaging content
- Need a large social media following to attract advertisers and sponsors
#35: Generate Leads
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Upfront time investment: Medium-High
Upfront financial investment: Low
Passive income potential: $.50-$30 per lead
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A lead is a potential customer or sales contact. Companies get leads through their website, online ads, and ranking high on search results. Larger companies often have teams devoted to lead generation and management, but smaller businesses don’t have those resources, and instead pay third-party freelancers or agencies to do it for them.
If you have a strong understanding of digital marketing, SEO, and web development, you can use those to gather leads and sell them to businesses. The industries that pay the most for these are home services, insurance, and lending companies, so it can be beneficial to have expertise in those areas.
Pros:
- Can use software and tools to automate lead sourcing and make it more passive
- No need to create and sell your own products or services
- High revenue potential once you’ve established your reputation
- Requires a specific skill set
- Can take a while to grow your reputation and increase earning potential
#36: Use Passive Income Apps
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Upfront time investment: Low-Medium
Upfront financial investment: $0
Passive income potential: $10-$100 per month
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Do you want to get paid for doing things you already enjoy? There are a plethora of apps that let you do just that. While many of the apps you’ll find on passive income earning lists are investment platforms, there are other options. Some of the most popular include:
- Mistplay: A loyalty program for mobile gamers, Mistplay pays users to play promoted games. Earn points for playing and turn them in for gift cards to Amazon and other online sellers.
- Swagbucks: Earn gift cards for doing a variety of online activities, like watching videos, taking surveys, or playing games.
- InboxDollars: A way to get paid for things you already do online, like shopping, searching the web, or even watching TV.
- Get paid to shop or play online games
- Make passive income from things you already do
- Easy to set up with no specific skills or knowledge required
- Relatively low income potential
#37: Take Paid Surveys
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Upfront time investment: Low
Upfront financial investment: $0
Passive income potential: $.50-$5 per survey
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Companies need feedback from users and customers to improve their products and services, and they’re willing to pay for that information. Taking online surveys doesn’t generate a ton of money, but if you enjoy doing them, it’s a way to make a bit of extra cash just by sharing your opinions.
The Swagbucks and InboxDollars apps listed above are two places you can do this. Some other popular and reputable survey-for-cash sites include Survey Junkie, Pinecone Research, and MyPoints.
Pros:
- Easy and free
- Earn money in your spare time while doing other things
- Provide feedback to improve the products and services you use
- You’ll only get paid for surveys you qualify for
- Can take a while to earn a significant amount
#38: Use a Credit Card with Cashback Rewards
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Upfront time investment: Low
Upfront financial investment: $0
Passive income potential: 1%-10% of what you spend
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Getting money back for the things you buy is one of the easiest forms of passive income. The only caveat here is that you’ll need to make sure you only buy what you can pay off right away, before you’re hit with interest that wipes out those savings. Look for a card with no annual fees. Many also offer a sign-up bonus of $200-$300. Nerdwallet’s list of cashback credit cards is a great way to compare your options.
Pros:
- No extra effort or investment required
- Many offer bonus savings on specific categories of goods and services
- Improves your credit score while earning cash back
- Can get hit with high interest if you don’t pay your balance in full
#39: Get Cashback for Shopping or Dining
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Upfront time investment: Low
Upfront financial investment: $0
Passive income potential: 1%-30% of what you spend
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Another way to get paid for the things you already buy is through discount and reward websites and apps. Like with cashback credit cards, you want to be careful you’re not overspending in your quest for rewards. For the things you already buy, though, you can access them through an app or website to get as much as 20% of your purchase back, which translates to more money in your pocket.
Some of the most popular sites for this:
- Rakuten: Shop through the app to get discounts, cash back, and rewards for buying things you already need and use.
- Earny: This site tracks prices and gives you a refund if it drops after your purchase. You can also win prizes and get other rewards for shopping, and adding the Chrome extension makes the whole process automatic.
- Seated: Book reservations at local restaurants and get up to 30% back in gift card rewards.
- Earn money back for the things you already buy
- Easy and free to get started
- Can earn additional bonuses and rewards
- Can take some time to accumulate enough rewards to cash out
#40: Buy a Parking Lot, RV Park, or Mobile Home Park
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Upfront time investment: Medium
Upfront financial investment: $10,000-$100,000
Passive income potential: High ($10K+ per month)
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People with vehicles need a place to park them, and the larger the vehicle, the more limited their options. Undeveloped lots are cheaper than commercial property with structures, giving this a lower financial barrier to entry than other brick-and-mortar options on this list. Once you have the lot set up, you can automate the space booking process or hire a few employees to supervise and maintain the space to make it a fully-passive income stream.
Pros:
- In-demand service with a consistent customer base
- Can make a profit from otherwise unusable and undeveloped space
- High long-term revenue potential
- Will need employees to make it fully passive
- Requires some initial capital investment
Create a Passive Income Stream
Let's review Graham's simple steps for developing your passive income idea into a thriving source of income: [su_note note_color="#dbeafc"]- Explore passive income stream ideas
- Perform market research
- Create a customer avatar
- Build the system
- Create content or ads
- Gather emails
- Convert followers to customers
Perform Market Research
Once you've chosen a couple of the best passive income ideas that you'd like to investigate, it's time to do some market research. You'll want to understand:- Industry revenue and profit benchmarks
- The major players and how they make their money
- Trends in the industry
- Gaps in the current offerings
Create a Customer Avatar
Create your own avatar profile with this template.
To earn passive income, you'll want to have a customer avatar. There are two ways you can create the customer avatar depending on what kind of passive income streams you pursue:
- Avatar of your future self
- Avatar of your future client
Avatar of Your Future Self
If you plan to earn passive income from dividend stocks, real estate investment trusts, exchange-traded funds, or other income-producing securities, you may want to create a customer avatar of what your life looks like in the future. You'll want to include aspects like:- The year
- Where you live
- Your monthly income
- Your family scenario
- Your work schedule
Avatar of Your Future Client
If your passive income streams involve selling a product or service to generate income, you'll want to define your ideal client. You want to know everything you can about them, including:- How they make money
- Where you can reach them online
- What is important to them
- Your pathway of interactions once you start interacting with them
- How they communicate
Build the System
This is where those who shine at running business ventures or creating passive income differentiate themselves from those who fail. You need a system in place. Otherwise you'll burn out.
Graham started his first passive income stream with the following tech stack:
- Cheap WordPress site
- MailChimp
- eJunkie
Create Content or Ads
The next step is to create the content or ads to get your passive income ideas in front of your target market. If you’re creating content, you’ll want to share regularly with your audience. You can use your customer avatar to create ad accounts on the appropriate social media platforms. Graham explained how he spends just five hours each week to earn passive income: [su_quote]I create content for YouTube or the podcast, record a class and Q&A, then check in with my community and answer questions.[/su_quote] You can use programs like Canva to make content generation easy, but Kajabi also has design tools built in.Gather Emails
You'll want to collect email addresses to communicate with your followers. Kajabi has built-in email collection and is really intuitive. You can even take the Kajabi Academy List Building Course to learn the best ways to build an email list using their platform.
If you prefer MailChimp, they also offer educational resources on using their platform. Here are the main things you need to know about any email list:
- You need real emails. If you have too high a spam rate, you'll be flagged by email operators. If the email addresses don't look real, they probably aren't.
- Disclose how email addresses will be used before you collect them. People are hesitant to give out their emails to unknown companies.
- Comply with the strictest laws you fall under. In most cases, this is the GDPR, Europe's privacy regulations.
Convert Followers to Customers
The final step in earning a passive income is converting followers into customers. This requires an automated email funnel. Kajabi has a free training that I linked to earlier. There are a ton of places you can get free or low-cost email templates and edit them to suit your niche. If you wish, you can also use paid ads with retargeting as long as you have the proper tracking codes on your site. Next, we'll answer some commonly asked questions about the best passive income investments.Passive Income Success: A Case Study
We mentioned him above, but it’d be a shame not to highlight him once more before we wrap this article. Graham Cochrane is a prime example of a wildly successful passive income plan. He's made $1.6 million dollars this year and only works 5 hours a week. Yes, you read that right. Graham got laid off from his job four months after moving his family to Florida during the Great Recession. He told us: [su_quote]My back was against the wall.[/su_quote] He had some experience recording and mixing for bands, which he thought he'd start doing as a side gig. So he started marketing the business: [su_quote]I started a blog, and [I thought] maybe people would see my blogs, and it would bring in more clients. I didn’t know about passive income and course materials...but within three years I made over a million dollars![/su_quote] Want to know his secrets? Get all the info in our interview.Passive Income FAQs
People ask a lot of questions about the best ways to invest passively. While I am not in wealth management, nor am I a certified financial planner, I have experience investing and am happy to share my opinions. Make sure to consult with a professional who actively handles wealth management before pursuing any types of income that require an investment.Passive Income vs Unearned Income Streams
Passive income is from an investment of time or money, while an unearned income comes from sources like gambling, alimony, lotteries, or social security.How to Generate Passive Income with No Initial Funds
Many of the top streams of passive income are online. In addition, most software offers a free trial. You just have to be willing to trade an upfront time investment for future income. If you are low on cash, consider getting into: [su_note note_color="#dbeafc"]- Custom products
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Have You Figured Out How to Get Rich in 2024?
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- The passive income definition
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- Real estate
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Professional house cleaning is a major industry. The global cleaning industry is currently valued at over $55 billion, and that’s expected to double by 2030. That means it's a great market for new entrants, but you'll need a house cleaning pricing guide to make sure you charge properly, which is exactly what we provide here.
[su_note note_color="#dbeafc"] Read from start to finish or click any of the links below to jump to the section you need right now.
- Case study: Queen Bee Cleaning
- How much to charge for cleaning a house
- What kind of house cleaning services should I provide?
- Ways to charge for professional house cleaning
- Sign up for our exclusive 7-Figure Cleaning Business Blueprint[/su_note]
Case study: Queen Bee Cleaning
Chris Mondragon’s wife started cleaning houses in 2015 to make some extra money. Their company, Queen Bee Cleaning, took off so quickly Chris quit his job and helped build it into a $1.5 million empire. Today, Queen Bee is also top-rated on Nextdoor, Yelp, Houzz, Thumbtack, HomeAdvisor, and Porch.
We'll share Chris’s insights to help you create a cleaning pricing guide that will allow you to make a great living in the house cleaning services industry. We'll cover the types of services and different ways to charge—and share a pricing list.
Keep reading for a rare opportunity to learn Chris's unique pricing strategies from his UpFlip-exclusive course. You'll discover exactly how he prices his cleaning services, which skyrocketed the growth of his business to $4.5M in record time.
How much to charge for cleaning a house
House cleaning prices for a home should be between $100 and $800, but each house cleaning service will have different prices depending on the size of the home, the type of cleaning, and where you live.
There are three typical ways house cleaning prices are calculated by a house cleaner:
- Hourly: $25 to $90 per hour, per cleaner
- Flat fee: $100 to $800 weekly or biweekly for standard cleaning of a single-family home
- Room rate: $100 for 1 bed/1 bath + $10 to $20 for each additional bedroom and bathroom
- Per square foot: $0.05 to $0.10 per square foot
Now that you know how much to clean a home, let’s discuss the different kinds of house cleaning services.
What kind of house cleaning services should I provide?
A housecleaning service will normally offer other services besides just cleaning homes for people who live in them. They may also provide services for Airbnbs, moving, apartments, and commercial spaces. For instance, Queen Bee also offers:
- Airbnb cleaning
- Carpet cleaning
- Disinfecting services
- Home cleaning
- Move-in cleaning
- Deep cleaning
- Move-out cleaning
- Office and commercial cleaning
Chris told us:
[su_quote]If I was to start today, I would probably focus on Airbnb cleaning because it has a higher profit margin.[/su_quote]
For standard house cleaning services, Queen Bee includes:
- Dusting all furniture, walls, fans, counters, and other hard surfaces
- Vacuuming all floors
- Mopping wood, marble, tile, and linoleum floors
- Mirror and window cleaning with a glass cleaner
- Cleaning and sanitizing all bathroom surfaces including toilets, sinks, tubs, and showers
- Sanitizing all kitchen surfaces including inside the microwave and the front of the fridge
- Spot-cleaning cabinets
- Changing linens (if fresh linens are left out) and making beds
- Emptying the trash and relining the trash can before exiting each room
These are just some of the house cleaning services Queen Bee offers. You can find Chris’s complete cleaning services checklist, including 11 add-ons, in our Cleaning Business Master Course.
Let's look at what you might offer as the owner of your own house cleaning business, starting with Airbnb cleaning.
What should I include in Airbnb cleaning services?
In addition to your standard offerings as a house cleaning service, Chris suggests maintaining an inventory of your own supplies to replace toiletries, kitchen essentials, and linens. For the laundry portion, you'll need to have someone do laundry or partner with a laundry service.
He also told us:
[su_quote]I charge extra for the toiletries and linens, but it basically takes me the same time as a normal home clean.[/su_quote]
Check out our interview with Chris below:
[su_youtube url="https://www.youtube.com/watch?v=d4Iip7BHXwg"]
What should I include in carpet cleaning services?
Carpet cleaning services focus only on rugs, carpets, and other floorings. You'll need to assess your time differently from other services and have the special cleaning equipment to do the job best.
Chris shared his cleaning pricing guide for carpet cleaning, and it includes five main cleaning points with time and price for:
- Rooms
- Hallways
- Landings
- Each stair
- Rugs
It's typical for a carpet cleaning business to have a minimum amount, such as $99 for two bedrooms.
What should I include in disinfecting services?
Disinfecting services are focused on cleaning surfaces with medical-grade cleaning products. The goal here is on keeping the space particularly clean in a way that helps to minimize germs. I would imagine this is popular for businesses or households that have had a COVID outbreak.
Christ told us:
[su_quote]Eliminating germs & pathogens requires more than just a wipe of a towel with bleach. We use an electrostatic sprayer to apply the disinfectant. The sprayer ‘loads’ the mist with a positive charge, making the disinfectant stick to all surfaces killing 99% of the pathogens. Our hospital-grade disinfectant is an EPA-certified product safe to use around children and pets [that’s] safe on all surfaces.[/su_quote]
What should I include in deep cleaning services?
Deep cleaning services should include everything you do in standard house cleaning, plus baseboards and behind furniture. Chris also includes dishes in his standard deep clean service and offers a variety of additional offerings.
How much does a deep clean cost?
Deep cleaning services are normally charged at a premium compared to a standard cleaning price. For Queen Bee clients, deep house cleaning costs between $199 and $319 above the standard house cleaning prices.
So, once you know how much you'll charge for regular services, it's easy to decide how much to charge for deep cleaning a house.
What should I include in a move-out cleaning service?
Move-out cleaning is a service offered to renters to help them save time and money by helping them get their deposits back. These services include:
- Thoroughly cleaning all counters, cabinets, and appliances
- Cleaning bathrooms, including toilets, sinks, and showers
- Cleaning floors and carpets
- Wiping down light switches, walls, and doorknobs
- Disposing of any expired food items
- Deep-cleaning the oven
Chris recommends using the move-out checklist provided by the client's landlord as the basis for bidding on the cleaning job and told us:
[su_quote]I charge $279 to $479 more for move-out cleaning costs than my standard cleaning rates.[/su_quote]
Want more great tips like this? Check out all of our UpFlip courses.
What should I include in office and commercial cleaning?
Offices and commercial cleaning jobs are different for every building. Chris recommends touring the property and establishing the following:
- Square footage
- Number of desks
- Percent of floors that are carpet and tile
- Number of windows
- Number of toilets and sinks
- Square footage of counters
- Kitchens in the building
- Parking lots
- Special requirements
These jobs can be more complex, but businesses need more routine cleaning services, which could be a win for you. Commercial buildings also tend to be better suited for pricing per square foot because you can assign a price per square foot to each task and then just multiply quantities. It might look like the table below. (Note that sqft = square feet.)
| Task | Quantity | Price Per Task | Total |
| Carpet (sqft) | 6,000 | .1 | $600 |
| Tile (sqft) | 10,000 | .2 | $2,000 |
| Desks | 60 | 1 | $60 |
| Windows | 600 | .1 | $60 |
| Toilets | 50 | 5 | $250 |
| Sinks | 10 | 2 | $20 |
| Kitchens | 2 | 10 | $20 |
| Counters (sqft) | 100 | .1 | $10 |
| Parking lots (sqft) | 50,000 | 0.2 | $1,000 |
| Special Requirements | N/A | 0 | 0 |
| Total | $4,020 |
House cleaning prices vs. operating costs
Every cleaning company will have costs associated with operating. One powerful difference between a successful cleaning business and other cleaning companies is how well the business owner manages their cleaning costs. Your house cleaning prices need to cover the following expenses:
- Payroll expenses, taxes
- Marketing costs
- Cleaning supplies
- Fuel
- Repairs
- Rent
- Utilities
- Professional fees
Based on Queen Bee Cleaning Service's annual expenses, you might expect your total overhead costs to be approximately 87% of the amount that you make if you have employees. If you are a single-person house cleaner, the total overhead will be between 30% and 50%.
In the following sections, we share a few examples. You can use similar math regardless of what type of cleaning business you run. Queen Bee is primarily house cleaning, so I refer to house cleaners in these sections.
Let's look at each of these to give you an idea of what they are for Queen Bee and what you can expect to pay when you start to charge for housecleaning.
How labor impacts house cleaning prices
Labor typically accounts for approximately 50% of the costs of running a house cleaning company. Whether this amount is going to you or your employees will vary. If you have employees, you'll typically need to pay them either an hourly rate or billable hours.
Just make sure you don't try to consider them independent contractors. Chris told us:
[su_quote]I was misclassifying the maids and got a hefty fine.[/su_quote]
To help establish an hourly rate, check what house cleaning companies in your area pay their housekeepers. The Bureau of Labor Statistics has a lot of data on the hourly rate of the house cleaning industry, too. In most places, a house cleaner will be paid an hourly rate of $15 or more.
Remember to train your staff well because employee efficiency can impact both quality and overhead.
Assuming the following:
- Employee pay: $15 per hour
- Employee hourly rate, revenue: 50%
- Number of people on cleaning crew: Two
You'll want to charge the customer no less than $60 per hour. That is far lower than the cleaning rates for many house cleaning companies. The reason is that a house cleaner has other costs that go into the standard cleaning fees.
Payroll expenses, taxes
On top of employee pay, your house cleaning price will also need to cover the costs of payroll expenses and taxes. The government requires employers to collect:
- Income taxes: You'll need to withhold these for all employees using the information in Publication 15-T.
- Payroll taxes: The employee pays 7.65%, and the employer pays 7.65%.
- State taxes: There are seven states without income taxes. You'll have to collect these from employee pay unless you live in Alaska, Florida, Nevada, South Dakota, Texas, Washington, or Wyoming.
- Other deductions: Insurance, 401K, etc., will be deducted if you offer them.
There are a lot of tasks associated with compliance, so you may want to outsource your human resources. Most of these services start around $39 per month plus $6 per month for each employee.
The 7.65% tax increases the $60 per hour fee to $65 per hour, which is starting to get closer to the cleaning rates of industry leader Molly Maid, which charges $75 to $96 per hour for a basic cleaning package.
Your revenue will also need to cover other costs such as cleaning supplies, which we'll discuss next.
Cleaning supplies
Based on standard cleaning services, you'll probably need to spend an average of $3 to $5 per hour on cleaning supplies. You'll be buying these in bulk to save money, but Chris estimates that the supply list for many cleaning companies will be around $900 for startup costs.
That means a rate of $70 per hour, which gets us even closer to the price your house cleaning service needs to charge.
Vehicle, fuel, insurance, and repairs
Local businesses will have to drive to provide weekly cleaning to residential and commercial clients. That means you'll need to maintain the vehicle and meet insurance requirements. At Queen Bee, these costs are approximately 17% of the revenue.
This is why your credit score is so important to businesses. Bankrate estimates that insurance costs 25% more for an average credit score than excellent credit, and those with poor credit spend twice as much as any other group.
If you add 17% to the $70 cleaning crew rate, that brings you to $81.9 per hour—without any administrative costs, marketing costs, rent, or other utilities.
Marketing and administration costs
The Small Business Administration advises spending 5% to 15% of your desired revenue on marketing your cleaning business (or any other business). Chris doesn't think you need to spend that much, though
If you have good software, you can automate many of your tasks and reduce the final cost of operating. Chris runs his marketing for between 2.4% and 6.2% of revenue per month, with the lower percentages during the holidays.
Pro Tip: To learn some of the ways Chris uses marketing, check out our blog on getting clients, and don’t miss our original report on small business marketing budget statistics that will help you make the most of your marketing spend.
Rent
Chris’s rent and utilities are based on running a home-based business. These are marvelous because they are mostly legal accounting maneuvers. If you store supplies in your home or do office work out of it, you can claim the space you use and the energy associated with it on your taxes.
There are a lot of rules governing this, but if you choose the simplified method of claiming, you get an allowance of up to $1,500 a year. If use your the actual expenses, it can go higher (but may increase the chances of an audit). You'll want to measure the square footage of the space used.
You don't have to include the costs of operating from home in your house cleaning cost, but if you do, it will raise the hourly rate by about $1 per hour.
Utilities
If you have a home-based business, you'll be using the energy associated with work as a write-off, but if you have a separate location where you store everything, you'll need to cover those costs.
Utilities shouldn't be too much unless your cleaning business does a lot of laundry or manufacturing in-house. To give you an idea, Chris only spends about $300 per month on utilities.
Professional fees
Local companies will often need a lawyer and an accountant to help them structure their domestic services correctly. You'll want to budget for these. Chris assumes approximately $1,000 per month for his cleaning company, but different cleaning services will have different needs.
Ways to charge for professional house cleaning
There are a variety of ways to charge for a cleaning service. We'll cover the most common pricing strategies cleaning businesses use, including:
- Charging by the hour
- Pricing per square foot
- Pricing per room
- Comparing house cleaning prices in your area
- Offering weekly cleaning subscriptions with discounts
- Proposing household chores as add-ons
- Giving free estimates
How much to charge for house cleaning per hour
The hourly rate for house cleaning is the easiest pricing structure to use, but it can create fluctuations in costs based on how long it takes to clean the property. This works best if the client provides all the cleaning supplies and just needs someone to help. You might want to do this if a client wants specific eco-friendly or other specific cleaning supplies.
You'll probably want to charge higher for the first hour. I typically assume that it will cost me $50 just to drive somewhere. Based on Queen Bee's pricing guide, Chris has established that cleaning services prices should be approximately $70 for the travel costs and booking fees.
To calculate how much you want to charge, assume:
- 2,000 hours per year
- 65% profit margin when you are the worker or 15% when someone else is doing the work
- Your income goals (let's say $100K per year to start)
Divide your income goal by the hours in a year to get an hourly rate. See the example below:
$100,000 / 2,000 = $50 per hour
$50 per hour would be revenue, though. To calculate the profit, you'd need to divide the hourly by .65.
$50 / .65 = $76.92 per hour
Let's make it a nice even number, so it's easy to multiply and make it a straight $80 per hour. You need to add your first-hour fee, though. Let's use the $70 Chris uses, and that will make the first hour $150, and each additional hour $80.
That means you need five hourly cleaners to make the same $100K profit you would if you were doing all the cleaning yourself. Now, if you have five employees plus yourself, you can make $200K per year after paying your employees their house cleaning rates per hour.
How to calculate cleaning cost per square foot pricing
The price per square foot is straightforward to estimate. Given that almost every address has a public record, you can look it up to see how many square feet their house is. Then to charge by the square foot, multiply the square feet by 20 cents (or divide by five).
Example: How much should I charge to clean a 2,000 sq ft house?
2,000 x $.20 = $400
2,000 / 5 = $400
Example: How much should I charge to clean a 3,000 sq ft house?
You can make it more complicated and separate it by carpet and tile, where the carpet is 20 cents and tile is 25 (examples for easy math).
(2,000*$0.20) + (1,000*$0.25) = $650
As you can see, the square foot billing can change based on the type of cleaning.
How much does it cost to clean a house per room?
Another easy way is to price by the room or by the fixture. Chris charges a fee per room plus fees for other specific tasks. For instance, he has a table that details:
- 1- to 10-room pricing
- Full restroom pricing
- Half bath pricing
- Add-ons like full window cleaning
Each has a specific price, so he can quickly estimate based on the number of rooms, restrooms, and add-ons. You should really check out how he does it on the Queen Bee Cleaning Service booking page.
Pro Tip: Chris uses Booking Koala to automate the whole booking process. Check it out, and let us know what you think!
How much do other cleaning services charge?
Professional cleaners have plenty of sites to help evaluate the average house cleaning cost in their areas. Many of the sites are the same ones you'll use to find customers for your house cleaning service.
For instance, Thumbtack makes it easy to establish the rates house cleaners charge in a particular area. While you're on the site, you might want to sign up to provide cleaning services.
Offer weekly cleaning service discounts
Whether you are a residential cleaning business or offer commercial cleaning services, your cleaning company can benefit tremendously by offering regular cleaning services at a discount to loyal customers.
House cleaners benefit from offering discounts for routine cleaning in the following ways:
- Increased efficiency: Less travel time, more cleaning jobs completed per day, reduced house cleaning costs.
- Better forecasting: Order your own cleaning supplies with more accurate forecasts.
- Better scheduling: You can schedule house cleaners working each day more effectively.
- Better cash flow: The more of your cleaning jobs that occur on a recurring basis, the better your cash flow will be.
- Reduces churn: CB Insights says that subscription models change the customer retention dynamic from mostly churning to mostly retention.
- Increases lifetime value: The value of a customer increases consistently over time.
- Reduced marketing costs: Your cleaning company will be able to spend less on marketing when you have higher retention rates.
- Lower overhead-to-revenue ratio: As a cleaning company's recurring jobs grow, the overhead stays the same until you have to invest in more equipment or administration.
- Happier customers: Everyone (except maybe hoarders) loves a clean home! Someone coming in each week and cleaning their home will delight customers.
When you have long-term relationships you may want to have a commercial cleaning contract. Chris doesn't use them, but a lot of his suggestions still work for contracts.
We used the pricing from Queen Bee Cleaning Service to show how their subscription model increases the revenue over the course of a year. As you can see, offering a 10% monthly, 15% bi-weekly, and 20% weekly discount can dramatically increase the revenue of a house cleaning business.
How much do house cleaners charge for add-ons?
Customers might want you to offer other services like appliance cleaning. Anticipate this and have easy ways to calculate cleaning cost estimates. Some of the most common add-ons are:
- Deep house cleaning
- Appliance cleaning
- Laundry
- Dishes
- Indoor and outdoor window washing
- Carpet cleaning
You can add each of these to the house cleaning cost to help improve your revenue per cleaning job. A $200 cleaning job easily turns into a full day if someone wants all the add-ons. It will increase the cleaning rate to potentially as high as $1,000 and make it so your cleaning crew only has to clean one house that day.
That's great for reducing expenses!
How much do house cleaners make for estimates?
Whether you are doing a deep clean, home cleaning, or post-construction cleaning, people love free stuff, and businesses should, too!
Chris told us:
[su_quote]Most people don't know the square footage of their house.[/su_quote]
A free estimate gives you a chance to view the property, manage the risk of underestimating with a flat rate, and establish the square footage and whether it needs a deep clean. Plus, it gives you a chance to develop a relationship, ask questions, and help your customer develop a plan. This may increase overhead costs, but it builds loyalty.
Sign up for our exclusive 7-Figure Cleaning Business Blueprint
Knowing how to correctly price your cleaning services determines if your business will grow and prosper, or fail before it even gets off the ground. Chris will show you the best pricing strategies so you can start earning $10,000 a month in just three months as you launch your business! Sign up for our exclusive seven-figure cleaning course today by clicking here.
What type of pricing do you plan to adopt with your cleaning business?
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