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Passive income streams are one of the best ways to get out of debt for a household.
Passive income is a great investment vehicle when building wealth and it can come in many different forms.
It can help wipe out debt created by life’s unforeseen circumstances or help build up a retirement portfolio allowing you to really live it up later in life during retirement when the time comes.
The truth of the matter is that passive income can be used for many things. Some people wonder can passive income be used to qualify for a mortgage even.
Below are some of the best types of passive income streams with long-lasting effects.
7 Ways to Create Long-Lasting Passive Income Streams
1. Mortgage Refinance
One of the best things a homeowner can do in a seller’s real estate market is to refinance.
It really is the perfect time to pull out some equity.
This is especially true if the interest rates are low. If you can reduce your mortgage rate by .75% or more, it is a great time for you to refinance your mortgage loan.
It would be safe to assume you could have a substantial monthly savings in your payment given current mortgage rates.
This will free up some income that was previously dedicated to your higher monthly mortgage payment. You will also be saving substantial amounts of interest on your new mortgage as compared to your old one.
2. High-Yield Online Savings Accounts
One of my absolute favorite and easiest passive income streams to create is a high-yield savings account.
- This requires very little effort to set up.
- Some of today’s online banks and savings accounts offer higher interest rates than a traditional money market account which is really hard to believe.
With an online savings account, the rules are the same in most cases as a typical savings account. Additionally, they actually have less rules than a money market.
In a traditional money market, there usually are limits as to the number of withdraws you can make in a given month.
Generally speaking, that is not the case with high-yield online savings accounts.
You always have access to your money for the most part and it is FDIC insured.
With some of the high-yield online savings accounts now paying well over 1.0%, this could add up to hundreds or thousands of dollars per year just by leaving your money there.
I personally ONLY use high-yield savings accounts for my finances.
It is not uncommon to make $20, $50, or even over $100 per month in interest.
If you have a balance of $20,000 and the interest rate is 1.8%, that works out to about $30 a month in free money!
Rentals require a bit of work upfront, but they offer to be one of the grand daddies of passive income streams by far once set up. Rentals are considered one of the best ways to invest 50k in real estate because of the passive income they produce monthly.
Yes it is true you are going to have to do your research up front on properties and rental rates, vacancy rates, demand, and tenant background checks.
You might have to even team up with a Realtor to assist you.
There is no way around that sometimes.
However, once you do clear all of those hurdles, your rent checks will start rolling in every month.
Once you have a tenant paying $1,200 a month, that works out to $14,400 a month in gross income.
If you structure your real estate finance correctly, you can save substantial money on your taxes. Not too bad!
If you are lucky enough to purchase three rentals, than you can compound those rental checks. Three rentals would actually work out to over $43,000 per year. Not a bad income stream I’d say.
4. Renting Your Place on Airbnb
Also in the rental category would be to rent out your place on Airbnb.
This can be kind of challenging because you will have to find a place to stay while your place is occupied by out of town guests.
Ideally, for this to work you will want to find a long-term tenant, maybe one who could rent for a few months.
I knew a guy who had a house on a lake who rented it out for a couple months and made some serious coin; well over $20,000! It does happen.
That money, in turn, paid for his temporary place he was staying and he still had a big chunk of rental income left that he made.
5. Storage Unit Business
Another great way to create a passive income stream is by renting out storage units.
Getting into the storage unit business could take some work.
Once you are in, all you have to do is manage collecting the rents. There is not a whole lot of maintenance the storage units themselves need (since often times they are made out of metal).
If you are charging $50 for 20 units, that will come to $1,000 in monthly passive income. If you get into a bigger complex where there are 50 units let’s say, now you are talking $30,000 per year in passive income.
6. RV and Boat Storage Lot
If you have some land, boat and RV storage is a GREAT business.
There are a few RV and Boat storage lots in the area where I live. I happen to live in an area where boating and camping are in-demand things to do.
I was shocked to find out that to store a 40ft RV in a dirt lot is about $75 a month.
If you have some land and are able to store campers and boats, you could seriously clean up on this passive income.
You need to have the correct permits and zoning, but 10 RV’s or Boats would be $750 total a month, just for letting them park on your land!
The more land you have, then the greater your monthly amount would be. I have seen RV storage lots pop up on land as small as half an acre.
If you can squeeze 15 boats or RV’s, then you would be able to generate over $1,100 a month!
7. Cash Back Credit Cards
Cash back credit cards are a great long-term income stream.
Let’s face it we all pay bills. It is just the normality of life and something that we must do.
Well by using a cash back credit card to pay your bills, you can make some serious money.
Some cards now pay upwards of 2% on purchases made with a credit card. Some cards will even pay upwards of 5% depending on the category of purchases.
The best part about this is that you are earning money just by going about your daily routine.
You are not doing anything different then you normally would other than paying your bills with a cash-back credit card.
The only difference is that you are now earning up to 5% by using the cash-back credit card.
Your lifestyle completely remains the same but now you have just created an income stream by using plastic to pay with.
Passive Income Streams Can Be Income For Life
Any one of these paths above you take will create long-lasting passive income streams for you.
Some of these are extremely simple and some are more involved.
It all comes down to how much effort you want to make and how much work you want to do.
Combining some of these together at the same time will supercharge your passive income streams and help you achieve your financial goals sooner.
Whether that be to wipe down your college debt, or put away for retirement, these 7 passive income stream ideas can help you achieve that goal.
Anyone can do these 7 passive income stream ideas. Take the steps today to supercharge your financial life.
WHAT PASSIVE INCOME STREAMS WORK FOR YOUR FAMILY?