Can You Buy Passive Income Streams?
People are constantly looking for ways to make more money and buying a running passive income streams is one way to do it. Whether you are a business or an individual, you can buy passive income streams that are already making money. If you already have a business, you can optimize it to save on operational costs and boost your passive income simultaneously.
Can you buy passive income streams? You can buy passive income streams that are already set up and making money. There are many passive income streams (both online and physical) you can buy and earn money from. Finding the right passive income stream to buy depends on a number of factors like the initial time investment you are willing to put in, your risk tolerance, business skills, centers of interest, capital and more.
In this guide, we look at a couple of passive income streams that you can buy. Here is what we will cover in this article:
1. Buying passive income brick and mortar businesses
- Purchasing an existing passive income business
- Purchasing a business and making it more passive
2. Buying real estate passive income
- Temporary rentals (AirBnB)
- Long-term rentals
3. Flipping properties
- Buying passive income online
- Niche Sites & Blogs
Before Buying a Passive Income Stream
You can buy a passive income stream, but make sure it is actually passive by carrying out your own due diligence before purchasing it. How involved are the current owners? What are their expenses compared to their income? How long will it take for you to break even on your investment? Has this passive income source hit a plateau? Is it scalable? Is it evergreen? How much work do you need to put into it? These questions (and more) are extremely important to consider before purchasing any business that is said to be “passive” by the owners.
Also, clearly setting your budget. Consider how you would feel if you lost all the money you invested. If the financial risk is too high, lower your investment or consider building your own passive income stream instead. If you would like to learn more about the difference between active and passive income, read this guide on our site.
Although the goal is to buy a passive income source, it may not be so passive at the start. Even if you purchase a website that is constantly making money over time, you may not actually make a profit from it for months or years depending on how long it takes for it to repay your investment. Some of these ideas will require a large financial investment that will not provide you ROI (Return on Investment) or allow you to break even for a while. With that in mind, let’s get started.
1. Buying Passive Income Brick & Mortar Businesses
Purchasing an Existing Passive Business
Some businesses can be set up to be very passive thanks to technology, automation, and outsourcing. Some businesses in this category include laundromats, self-service storages, food trucks, ice-cream trucks, ATMs, and Automatic Car Washes. However, if the business is not set up to be passive, the founders or owners will actively be implicated in daily operations. We go into more detail on this below, but make sure the business is already setup to be passive before purchasing it.
Purchasing a Business & Making it Passive
Some businesses such as laundromats, self-service storages, food trucks, ice-cream trucks, ATMs, and Automatic Car Washes can be set up to be passive. However, if the business is not set up to be passive, you will actively be involved in the company and trade your time for money. For example, if a laundromat offers services such as pressing, pickup, and home deliveries, then this business will be active for the owners unless they hire employees to carry out these services. Another way to make such a business more passive would be to not offer active services and to improve the experience in-store by implementing passive self-service accommodations.
Providing high quality, automated washing machines, a lounge area with vending machines (coffee, snacks), arcade games and more could make a laundromat more comfortable for customers and more passive for owners. Making the experience more relaxing and fun with complementary passive income services can reduce the need for physical presence and boost income. Outsourcing work to a cleaning company, a qualified accountant and a surveillance company can help reduce the need for the owners to be constantly on-site.
If you own a business or want to make a business more passive, read the article below. It contains a 6 step guide to make a business more passive. Keep in mind that purchasing a business is an expensive endeavor, especially if it will require a lot of monderinzing (new machines, automations, hiring etc).
2. Buying Real Estate Passive Income
Temporary Rentals (AirBnB)
Online platforms such as Airbnb allow you to temporarily rent your home to guests. Renting out a property can be highly passive, however, it has to be set up to be passive (ex. self-locking system, cleaning company etc). Using online platforms such as AirBnB to rent out a home or apartment to prospective short-term tenants can be lucrative. Estimates show that about half of those who rent their properties on AirBnb make at least $500 a month (source). Make sure to be aware of local regulations with regards to peer-to-peer rentals before getting started. Once you are ready, register your home or apartment on the platform. To attract many people to your rental service, you should first ensure that your rental space is fit for use by your guests. This can include proper bedding, parking, internet, etc.
On average, 27% of the residents in the US rent out their homes (source). Long-term rentals can be home or business rentals. These provide monthly recurring revenue to owners who can make this business more passive by outsourcing work such as ongoing repairs and improvements. You can purchase a home that already has long-term tenants and provide upgrades to increase rental value. Carry out in-depth due diligence when purchasing real estate.
Flipping properties is another popular way to make money in real estate. Although not passive (unless you outsource it to a construction and real estate company), flipping properties involves buying properties, improving them and then reselling them at a higher price for profit. A survey by ATTOM Data Solutions shows that a little over 49,000 homes were flipped in the US within the first quarter of 2019 (source). This represents 7.2% of all homes sold during the period. Flipping homes has become a popular option for people who are looking to make some extra income. However, this can be costly, risky and will not be passive unless you outsource the construction and reselling work.
3. Buying Passive Income Online
Niche Sites & Blogs
Niche sites are websites on a targeted topic. There are many different platforms that allow you to purchase and sell profitable niche sites or blogs. Some popular sites include Flippa, or Trustiu. Most niche websites that earn $1,000/month can sell for anywhere from $24,000 to $36,000 per site (source). You can do this by buying niche sites with a lot of potential, improving upon the content, and then reselling them for a higher price. You can outsource this work to make it more passive if you have the budget.
Income School shares some of the sites that they have sold and tips on how to do so yourself. Selling niche sites can be a very passive way of earning some extra income. You can develop and sell your own sites but you might need some time and effort. You can also decide to purchase an existing site, to pay for new content, boost traffic, and then resell it for a profit. This is a much more passive way to make money.
You can buy passive income businesses like laundromats, self-service storage facilities, self-service stores and more. You can also transform a business into a more passive entity through income automation and outsourcing (source). You can also enjoy rental properties as passive income sources with short-term or long-term rentals, or by flipping homes. You can also purchase passive income streams such as niche sites, blogs or apps.
Some passive income streams are cheaper than others, and some may need more work than others to make them truly passive. Purchasing a passive income niche site will probably be cheaper than flipping real estate for example. Some of these passive income methods will require a considerable amount of time, skill, and financial investments. Some of these streams may take time before they provide you a return on investment. Make sure to calculate your budgets, project time span and break even point before diving in.
Can I make passive income with no money? It is possible to make passive income even if you have no money to start up. Some passive income ideas do not require too much of a financial investment to start. For instance, renting out your bike, parking spot, space or your things may be cheaper alternatives to making income passively.
How can I make my income stream more passive? You can make your income streams more passive by no longer trading your time for money. Creating and monetizing assets, outsourcing, automating and using technology to optimize your workflows can help make your business more passive. You can also hire people and delegate some of the tasks to them.