Passive income is a phrase that is bandied about a bit, and for good reason.
Passive income is a way to generate a stream of income that can be quite reliable. Many people work to generate multiple streams of passive income to fund a lifestyle that gives them more leisure than they would have if they were working a regular nine-to-five job. So if you’re looking to break out of the rat race and live a more flexible and balanced life, passive income could be for you!
Passive income UK ideas
Here’s a quick list of passive income ideas to try in the UK:
- Start a blog
- Write a book
- Sell stock photos
- Invest in property or stocks
- Rent out storage space
- Start a newsletter
- Invest in vending machines
- and more!
We’ll go into more detail on all of these further down the page.
Disclaimer: this post uses affiliate links. That means that if you make a purchase or sign up for an opportunity through one of the links on this page, I may earn a commission at no extra cost to you.
What is passive income?
Simply put, passive income is any money that you earn while you are not actively working. This is the opposite of the standard idea of work, where you are trading hours for pounds.
With most jobs, when you are not working, you are not making any money. But with passive income, you have the potential to make money at all times, whether you are actively working or not.
That means you can make money in your sleep, while you’re travelling, when you’re off sick, and so on. It will become clearer as we go through this list of passive income ideas.
But first: a reality check. Basically, all passive income ideas require you invest either time or money upfront. Then, you’ll receive future income based on that time or money spent.
Lots of people are looking for a passive income idea that will start earning them money right away, with no hard work required. Sorry to burst your bubble, but that doesn’t really exist! After all, it was so easy, everyone would be a millionaire.
Most passive income ideas require a lot of hard work to get off the ground. Think of writing a bestselling book: it takes a lot of time up front, but successful authors can live off the royalties for years. You have to think of your passive income quest as a long term game.
The only way around this is if you already have money. Invest it wisely, and your investment can grow without much further input from you.
With that said, let’s take a look at some passive income ideas in the UK!
Investment properties to let
This tops my list because it is the most obvious and ubiquitous form of passive income. Most adults will rent a home or flat at some point in their lives. The property owner makes monthly income on this property for as long as they own it.
If you have money to put into an investment property as a single owner or as part of an investment group, it’s a sure way to generate a stream of passive income.
You can take an active part in the management of the property, which will maximise your profits but also take time (responding to tenants’ issues, organising repairs and so on). Or you take the super-passive route and spend a percentage of that income on a property management company.
However, if you choose to manage your investment property it will bring you income in two ways. Firstly, you will receive passive income while the unit is occupied. That income is assured so long as you keep the property full. Secondly, you will most likely make a very handsome profit when you decide to sell the property, or sell your interest in the property to another investor.
Of course, buying a property takes a lot of cash upfront, which many of us don’t have. But there is another way: property crowdfunding, which lets you invest in a share of a property along with other investors.
Purchase stocks that pay a dividend
While many people, especially younger people, think of purchasing stocks or receiving dividends as something that older people do, or rich people do, that simply is not true. Earning dividends is something that anyone can do, provided that you invest in a solid company that is paying regular dividends.
Simply put, a dividend is a share of the profits that a company divides up between the investors. A solid company with little debt may pay upwards of 8% dividends on yearly profits to shareholders. This can be a great source of income for you if you choose well and invest in multiple companies that pay dividends.
To make this a source of passive income, do your homework. Choose reputable companies that have been paying dividends reliably for a long time. Then invest amounts that are comfortable for you. No stock investment is risk-free, but a wise investor can choose stocks that perform well and generate income.
Also, make sure you know how the dividend is paid. Some companies pay dividends in additional stock. This can be a good thing if you’re investing for the long term, because your investments will compound over time.
Write a Book
Gone are the days when writing a book involves pouring your soul into a manuscript and sending it off to agents in hopes of getting an agent who will be able to get a publisher. Thankfully, gone also are the days of making pence in royalties on your hard work because the publisher is taking all the profit.
Now, writing a book means sitting with a laptop for hours, self-editing or hiring a freelance professional editor, and then uploading your manuscript for publication online. The most popular self-publishing format is Amazon Kindle.
The writer-facing portal for Amazon Kindle is called Kindle Direct Publishing or KDP. With KDP, you do all the work. You write, edit, format, upload, advertise and bring your own buyers. KDP publishes your work in an ebook format and makes it available for sale in as little as two days.
You keep a nice chunk of the profits too, and they keep coming in for as long as your book keeps selling. That is passive income.
When you publish with KDP, Amazon gives you the option to add your book to the Kindle Unlimited library. This means that they make your book available as a library book for their Kindle Unlimited users. You still get paid. You get paid monthly based on how many pages of your ebook people read.
Publish Your Book as a Paperback
Once you have published your ebook, KDP gives you the option to generate even more income by publishing your book as a paperback. This is an important stream of income that you should not overlook. While the ebook market is growing, the paperback book is still overwhelmingly larger. The majority of people still enjoy holding a paper book.
You can format your book for paperback publishing, and then advertise it for sale. Amazon prints your book on-demand. This means that there is no investment up-front for you except for your time. Once it is set up for printing, then you go about advertising it and bring in the buyers. When they order a copy, Amazon prints it and sends it. You get a nice bit of profit, and you never have to touch the book.
Publish Your Book as an Audiobook
Since you have put in the effort to write the book, why not go on and publish it as an audiobook with Amazon Audible? This may require some up-front cost for you to hire a narrator, or you may decide to split your profits with your narrator, but this audiobook can bring you money for years to come.
Audiobook popularity is on the rise with no signs of stopping. Busy mums and dads, commuters, students, walkers, and a myriad of others enjoy listening to audiobooks as they go about their tasks. Your book can be one of those books that they enjoy. Plus, it can be a way for you to generate more sales for your paperback book. If you write a smashing book and they enjoy the listen, odds are they will buy more of your work or recommend it to a friend.
Become a Narrator
Since audiobook popularity is skyrocketing, there is a huge demand for great narrators. The quality of the narrator can make or break the success of an audiobook. Do you have a smooth, soothing reading voice? Can you read for hours without getting a sore throat or raspy voice? Then becoming a narrator can generate a very handsome passive income for you.
You can get an agent who finds narration jobs for you with national publishers. This agent represents you and your voice to publishers who desire to produce a work as an audiobook. When you get this type of job, you will record at a studio and may receive a single fee. Sometimes narrators get royalties, but not always. Try to negotiate for royalties if you hope to make passive income!
You can also self-represent as a freelance narrator. This is wonderful for people who have recording equipment at home. Perhaps you have a podcast studio or some similar space that you can use for narrating books.
You can work as a freelance narrator and advertise yourself for work on sites such as UpWork, or you can advertise yourself as a narrator for Amazon Audible. You will audition for narration jobs, and then receive either a fee up-front or a percentage of all royalties in the future, for as long as that audiobook is sold. That could be a really long time.
Start a Blog
Continuing with the idea of monetizing words into a passive income, bloggers can make a nice income in multiple ways. Some bloggers sell a subscription to their blog content. This works if you have a very specialized niche. Can you write riveting short stories? Maybe you can turn your wicked wit into a wildly popular cartoon strip. Perhaps you can make a library of educational crafts and projects that parents can do with kids at home.
Those are just a few ideas for things that people would pay a small monthly subscription to gain access to. As your subscribers refer more subscribers, that can turn into a nice stream of passive income. Create referral programs with special access passes and freebies, and you could grow a large paid blog following very fast. All of those small monthly fees add up fast.
Other bloggers monetize their craft in different ways. Firstly, you can sell ad space on your blog. You can do this through both Google and Amazon, for starters. There are multiple ad servers that you can look into who will give you a cut of their advertising profits in exchange for hosting them.
A subset of bloggers are affiliate bloggers. This means that they publish valuable blog content in some kind of specialized niche. This is usually a niche they have a lot of knowledge about or are passionate about. Niche examples might include a blog all about coffee, parenting, classic cars, caravanning, or cosmetics.
Inside that blog content, there are three main ways to monetize the traffic that consumes the blog content. Pay-per-click ads, pay-per-lead ads, and pay-per-sale ads. A simple example would be a blog article listing the 10 best grills for sale in the UK. Each grill in the blog is linked to an affiliate company that has already agreed to give the blogger a small cut of each sale made by someone clicking the link in the article.
Start a Curated Newsletter
If you are not a writer, but you know a good article when you see one, you can begin a curated email newsletter for a particular niche. This is becoming more and more popular because people do not have the time to keep on top of all the news and developments in their particular niche. People enjoy having a single very valuable curated newsletter to browse through on a weekly basis.
This type of income is also affiliate, but you incorporate both paid advertising articles and affiliate links into the curated content. If you become very successful with your email list, you will gain newsletter sponsors which means a very nice income for you.
This particular type of income requires more ongoing attention than writing articles that sit out on the web and pay for years to come. However, because these curated newsletters can create income for you even while you are not actively working, they are a source of passive income.
Sell Your Photos
I will move away from monetizing written words and look at a few different skills-based ways to create a passive income. We all see stock photos used in everything from news and internet articles to YouTube videos, educational documents, whitepapers, and blog post feed photos.
Many of these photos are taken by ordinary people and sold through stock photo outlets such as iStock, Shutterstock, and Adobe. Do-it-yourself website development applications such as SquareSpace and Wix also have libraries of stock photos that can be purchased from amateur photographers.
While the royalties on these photos are very low, if you are taking amazing photos anyway, then you might as well make an account and see if they sell. Many people believe that only nature photos and panoramic landscapes sell well as stock photos. However, there is a growing market for gritty, real-life photos as well that can be used for topics such as politics, human rights, and environmental concerns.
A big benefit to uploading photos for sale is that they are always available for sale unless you take them down. This means that a photo you uploaded five years ago could still be bringing you small royalties today.
Invest In Vending Machines and Coin Operated Machines
Vending machines require spurts of intense work and require a significant initial layout. Additionally, you must find advantageous locations and pay for space to place your machine. However, once you have it set up, it makes money for you no matter where you are. With some smart planning, you can place vending machines in a route, and make a routine of visiting each one regularly to collect money and restock.
Coin-operated machines are also a wonderful hands-off way to earn passive income. From ride-on toys like carousels, horses, and race cars at the mall, to car washes and coin-operated laundry machines, these make money whether you are there or not.
Some of these self-service machines will require more maintenance than others, but also bring in a higher income. For instance, a ride-on horse at the mall may not need maintenance often but also may not bring in much income. A laundromat requires a very large outlay and needs frequent maintenance, but also brings much higher returns.
When it comes to self-service machines, the type you choose depends on how much time and money you want to invest up-front, and how much of the maintenance you can or want to do yourself.
Become a Dropshipper
This has become a wildly popular way to make an income as the digital revolution has pushed much shopping online. Additionally, the global culture is becoming more “online-first” as time goes on. This means that you have more opportunities for online retail success than ever before.
A dropshipper is a retail store owner who manages an online store but does not stock the inventory in-house. Instead, the store sells the item and it is shipped directly from the manufacturer to the buyer, without any intermediate storage or handling. You can start a dropshipping store with a market platform such as Shopify in an afternoon. Of course, you will also have to spend time on advertising or promoting your store.
Once things are up and running, there is software that can automate the process for you, or you may even choose to hire a freelancer to respond to customer support and queries.
This is an excellent way to invest some time and a little money up-front, and then continue to enjoy the residual passive income as the items that you stock in your virtual store sell without additional effort on your part.
Own and Manage a Holiday Rental
If you live in a place where you can let a room to lodgers, then fix the space up and try advertising it on a short-term rental platform like Airbnb. You may be surprised at the number of people who would rather let your spare room than stay in a hotel.
If you can afford to lay out a large amount of money, then consider purchasing a cottage in a place where people love to go on holiday. The nightly prices for entire homes can be very high. In some areas, holiday homes are quickly booked up for the whole season, bringing a high profit margin to the homeowner.
This type of business requires a large amount of capital investment up-front, and you will be paying a lot of maintenance expenses throughout the time that you own the home unless you can arrange to live on the property as well and do cleaning and maintenance on your own.
If you create a wonderful experience for your holiday guests, they will come back year after year, saving you money on advertising and maintenance. Repeat guests will take better care of your property during their stay than those who stay only once, will book their stays early in the season, and stay for longer stretches at a time. So earning repeat guests increases your passive income potential.
Rent a Storage Space
Storage space is letting for a premium everywhere, and I can not think of a more passive income than letting storage space. People simply do not have enough room to store things that they want to keep, especially if they live in a flat.
If you have a secure shed, garage, spare room, or another area that you can provide for someone to let and give them access to during reasonable working hours, you may be shocked to find out how much they are willing to pay to secure their spare belongings with you. You can advertise your space on a site like Gumtree.
If you have space outdoors but do not own a suitable shed or garage, consider purchasing a small portable storage container, and then advertising it for storage.
Rent a Parking Space or Garage
Parking is also at a premium in busy areas such as London where it could cost you over 11 pounds to park for only two hours. People in such busy places are happy to find privately-owned parking spaces that cost less than publicly available spaces. You can use a parking space broker such as Lock Up Garages to advertise and let your extra parking space. You do not have to do anything except keep the space clear.
You can also rent your entire garage if you own one. People will rent secure garages to store classic cars and such. You could make over 20 pounds a week just by letting someone park their cars in your garage. If you have garage or barn space in the country where someone could park cars and come work on them over the weekend, you can make a handsome income renting the space.
This scheme is not only profitable in large cities. If you live in a city that is inundated by holiday travelers, you may also be able to let your parking space or garage to travelers. Travelers may need to find a space to park an extra vehicle, or may want to have a reliable and more secure place to park while they spend their holiday in town.
Become a YouTube Star
YouTube has proven to be a tricky game to win, but for those who learn to play, the payoff can be huge. Some YouTubers make a living for themselves and their staff from activities based around their YouTube channel. Other YouTubers are enjoying a lucrative side hustle on YouTube. Either way, if you have the technical skills then YouTube is a platform that you ought to be investing your time in.
YouTube posting will take a lot of your time. The YouTubers who win are the ones who are producing high-quality videos and posting them often. A nice thing about YouTube is that you do not have to produce ridiculous or silly videos to earn a following. Many YouTubers are professionals who produce content related to their field.
While this type of content may take more time to gain enough followers to begin earning money from YouTube advertising, if you produce nice videos, advertise consistently on social media, and make your material and videos entertaining in some way, you can earn a nice bit of advertising commission from YouTube.
Some YouTubers demonstrate mechanical skills, teach about real estate, law, investing, explore medical topics, demonstrate crafts with kids, and those who let viewers ride along while they tow vehicles, feed zoo animals, and everything in between. Most videos are now recorded on high-quality smartphones, which gives you an incredible advantage over all previous generations of videographers.
The key to the popularity of all of these videos is that the audio quality is great, the video quality is very clear, and the production quality is nice. An entertaining video with poor audio will not do well, because people lose patience and click away. So invest in high-quality audio equipment, practice your camera skills, and learn to do your own video editing. These videos will bring passive income for years to come.
Use Cash Back Shopping Apps
This option is very easy as it involves shopping, which is something that you must do anyway. The principle with cash back apps such as Rakuten or Ibotta is that you exchange shopping data with the app provider in exchange for a cut of the advertising budget. This is done by shopping through the app or scanning your receipt. Your earnings are then made available for cash transfer to your bank.
A word of caution on these apps is that when you shop through the app on a website that uses dynamic pricing, the website may charge more expensive prices for the same items. Some web stores pass along advertising costs to consumers by tracking click-throughs and then raising prices accordingly, depending on how much the advertising link will make on the transaction.
The way to avoid this trap is to go directly to the website where you intend to shop first and note the prices on a few items you intend to purchase. Then go through the cash back app and view the same items to see if they cost you more. If so, then you know that you are not really earning passive income using this method with this store. However, not all online stores use this tactic.
Further, if you use an app that requires you to shop at a store and then scan your receipt, then you are not going to find any price fluctuation. This is simply a cash back incentive in exchange for your shopping data.
Invest In Coffee Carts and Snack Carts
This investment requires permits, rental spaces, a small portable building, stock, and barista employees. However, the specialty coffee industry is huge, and is not going away. If you can invest in a winning coffee recipe, you can make very large passive profits by managing a chain of coffee carts.
In addition, these coffee carts can be in mobile trailers that can travel and sell coffee drinks for corporate events, fairs, and public events. Some corporate events will provide a large up-front fee which you can negotiate and know your profit from the outset. A mobile coffee cart can even follow the masses of holiday travelers to the sea and keep doing business with loyal customers.
The same idea goes with snack carts. If you see a golden opportunity to provide fresh snack foods in an overlooked area, then you should seriously consider investing in a snack cart. An example would be outside home improvement stores and in outdoor mall parking lots. Often these areas are overlooked for their potential to profit from weary shoppers who will happily visit snack and coffee carts for a much-needed energy boost.
Passive income UK: conclusion
As you can see, there are a lot of possible ways to make passive income in the UK. Find the right one for you, and you can enjoy a steady income and a lot more free time! Just be prepared to invest either time or money upfront. Remember there are no real shortcuts. Think long term, and enjoy your success!