9 Low Cost Passive Income Ideas that Work [All Under $500]

If you want to start generating passive income, but don’t have a lot of money to start, you are in the right place.

This article will cover 9 low-cost ways to earn passive income. All of these ideas cost less than $500 to start and have the potential to make some really attractive returns over the long term. Of course, as with any investment or business undertaking, returns are never guaranteed and your results may vary.

Now I am not going to cover standard advice like putting money into a high yield savings account or buying dividend paying stocks. Sure, they can produce passive income, but the amount can be pitifully small (especially for high yield savings accounts). Plus, you don’t really need an article to tell you about these commonly known options.

My ideas are somewhat unconventional and some of them will require a bit of work to get up and running. But I also included strategies that are basically just plug and play. I think you’ll find a nice balance between the two in this article.

Here’s a preview of the strategies we’ll cover. You can jump ahead to any of them using the hyperlinks.

I use many of these ideas myself, including #1, 2, 3, 4, and 7, so I can confidently say that if done right, you have the potential to generate some great passive income using these strategies.

Let’s get into it!

If you would like to see a condensed version of this article in video format, check out my YouTube video on the topic below.

This post may contain affiliate links. If you click on a link and complete a transaction, I may make a small commission at no extra cost to you. 

The information contained in this post is for informational purposes only. It is not a recommendation to buy or invest, and it is not financial, investment, legal, or tax advice. You should seek the advice of a qualified professional before making any investment or other decisions relating to the topics covered by this article.

1. Rent Out Stuff You Already Have

How Much It Costs to Start: $0

There are a ton of ways to generate passive income from stuff you already own.  What I like about this strategy is that you don’t need any money to get started and you can keep it as low-key as you want.

Rent out Your Extra Rooms through Airbnb

This one’s pretty obvious, right?  Everyone knows you can rent out extra rooms through Airbnb and collect some cash on the side. 

But you should be careful to make sure your activities are permitted by your local municipalities, your HOA (if you have one), your landlord (if you are renting out your place), etc.

Rent Out Your Extra Storage Space

If you’ve got a spare bedroom or closet, or some unused space in your basement or garage, you can rent it out to people looking for extra storage space and generate passive income each month.

Check out Neighbor, who is a leader in this space.  I have used them myself – their platform is easy to use and you can get up and running in minutes. I participate in their “refer a friend” program, so if you sign up using this link, you (and I) will get a $50 Amazon gift card when you list your space.

If you want to learn more about this strategy, check out my article on the topic here.

Rent Our Your Cars Through Turo

You can also rent out your car when you aren’t using it on Turo.  According to Turo, you can make hundreds of dollars a month doing this.  Check out their Carculator to get a sense of how much you could make renting out your car through this platform.

If you want to learn more about this passive income strategy check out my article on the topic here.

2. Peer to Peer Lending

How Much It Costs to Start: $25

If you want an easy and simple way to generate passive income, consider peer-to-peer lending. 

If you don’t know what peer-to-peer lending is, it’s where you lend money to various borrowers through an online platform. 

As of this writing, some of the major platforms in this space include Prosper (which I use) and Funding Circle. Many peer-to-peer lending platforms are not open to individual investors, so be mindful of that when looking around.

The process is simple. 

Let’s take Prosper as an example.  You go to their website and open up an account (takes about 3 minutes). You then link that account with your bank account and fund your Prosper account. You can invest with as little as $25.  

Once your account funds, you can look for loans that meet your criteria and lend out your money.  Then you get paid.

Simple and completely passive.  I love it.

3. Blogging

How Much It Costs To Start: $0 – $150/year

This is one of my favorites.

If you have a knack for writing, you can start a blog.  You can write about any topics that you have some expertise in or that interests to you (preferably both!).  The topic you write about is often referred to as a “niche.”

You don’t need a ton of money to get started.

You will need to get a domain name from a company like namecheap or godaddy (for like $10-$15 per year) and find a company like Cloudways to host your blog. As far as hosting goes, I think Cloudways offers the best blend of price, scalability and customer service – I host three of my sites for around $10.

Cloudways is a bit more of a premier service and it allows you to run bigger blogs at a great price, but if you want a slightly more affordable option (at least in the beginning), check out Siteground. I used them when I first started blogging and they are a great hosting provider for new bloggers.

That’s really it.

You can choose to buy a bunch of extras, like premier themes (which are basically just website design templates) and paid plug-ins which can provide some nice features, like image optimization, etc., but honestly you can do just fine using a free starter theme, like Astra (which I use) and free plug-ins.

To learn more about how to start a blog, check out my article on How to Start a Blog From Scratch.

I cover all of the key areas you need to know, including how to set up your website and most importantlymy best tips for writing great articles, getting traffic to your blog, and monetizing that traffic.

Is Blogging Passive?

Not in the beginning. Setting up your website is not passive.  Neither is researching the right topics to write about or writing the actual articles.  All of that requires work. 

But once you are up and running, the payoff can be awesome.  This is definitely one of those things where the more you put into it, the more you can get out of it.

If you have a bunch of good articles that are generating traffic, you can start monetizing your blog through two main channels: (i) display ads and (ii) affiliate links (which are customized links to products you are promoting). If you want to expand your monetization options even further, you can create informational courses or ebooks and market them on your blog too. 

At that point, the business can be almost completely passive.  

This business has no customers, no inventory, no employees, no physical location, and very few operating costs. That’s about as passive as you can get!

If you want to keep growing your blog, you can.  Just continue writing articles (or improve existing ones), but even if you don’t, the blog is going to keep rolling even if you take a week off (or even a month off for that matter). 

If you want to short-circuit the work of starting a blog, one option is to buy an existing blog that is already making money. It can be a fine source of passive income for you with some great potential returns. Some of the main sites that sell blogs are Flippa, Empire Flippers and FE International. You can buy starter sites on Flippa for very little money (like way under $500), so it’s a great option if you are low on funds, but you will need to conduct your own due diligence to make sure you are getting a legit and high quality site.

Among the three, I really like Empire Flippers because they strike the perfect blend of high quality vetting (so you don’t see a bunch of scammy websites being sold) while still having a ton of profitable options to choose from.

They get a new batch of websites for sale each week (on Monday morning), so you can predictably see what’s new and jump on any great deals that are unveiled. I am an active user and love their service.

To learn more about this strategy, check out my article on Buying a Blog for Passive Income: What You Need to Know.

Now buying a money making blog can be expensive (especially if you want one that makes real money), so if you want a nice middle option, you can hire a service to create a website for you. Make Lemonade is a UK based firm that specializes in this.

I have used their content writing service to help me expand my blogs when I was running short on time, but they do offer a full service model, where they will create your website for you from start to finish and include content that has gone through their rigorous keyword research process.

Check them out here if you want to learn more.

4.  Affiliate Marketing

How Much It Costs To Start: $0 – $150/year (with website)

Affiliate marketing is another popular way to make passive income.  The concept is simple.  You are basically a salesperson for a particular product that you want to promote.  But instead of knocking on doors or calling people up, you “sell” the product online. 

A common method of affiliate marketing is putting affiliate links on your website.  As we talked about in the blogging section, this is one of the two primary ways you can make money as a blogger.

When someone comes to a page that has your customized affiliate link and they click on it, you will earn a commission if the person buys the product (or takes some other qualifying action, like signs up, etc.)

How Do You Find Affiliate Programs? 

Amazon Associates is one of the most popular affiliate programs out there.  They are especially well-suited for beginners because they have easy qualifications, carry almost every product you can imagine, and are a highly trusted source for customers wanting to buy stuff.

Love a particular product and want to write about its benefits?  Drop an amazon affiliate link in your article to the product you are recommending and make money every time someone clicks on the link and buys it. 

Of course, Amazon isn’t the only game in town. 

There are many other affiliate programs out there.  Just Google any product or company you want to promote and add the words “affiliate program” to the end.  You’ll find that many already have an affiliate program in place.  All you have to do is apply. 

You can also find tons of affiliate programs through affiliate program networks like awin, flexoffers.com, cj.com, clickbank, and Rakuten.

Can I Do Affiliate Marketing If I Don’t Have a Website or Blog? 

You can still do affiliate marketing by putting your affiliate links on other places where you have access to traffic.  That could be your social media accounts (e.g. Pinterest, Facebook, YouTube, etc.).  Or, you could generate traffic through paid ads on social media outlets (although that can get expensive and tricky). 

If you want to make this as passive as possible, you should go the route of setting up a website that gets relevant traffic and then let the traffic do its thing. 

5. Real Estate Crowdfunding

How Much It Costs to Start: $500

Owning rental properties is one of my favorite ways to make passive income.  But buying properties can be expensive. Luckily there are ways to invest in real estate without buying actual properties and managing them.

It’s called real estate crowdfunding and it has been gaining in popularity over the past few years.  

Real estate crowdfunding is a method used by companies to raise money for real estate investments from a broad range of investors. These companies typically operate online platforms where investors can review real estate investment options. 

If the investor finds something that they like, they can choose to invest in it.

The bad news is that, in many cases, these real estate crowdfunding platforms have steep minimum investment requirements.

Platforms like Fundrise and Crowdstreet are popular options, so check them out if you’d like to learn more.

I like Fundrise and invest with them personally. They have really low minimum investment requirements. As of the date of this article, their starter package only requires a $10 investment.

If you join them via this link, you can be part of their “refer a friend” program where you (and I) can receive $50 worth of bonus shares for signing up. If you want to help support the blog and also get some free shares, it’s something you may want to consider.

6. eBooks

How Much It Costs to Start: $0 (if you do everything yourself)

If you like writing, but blogging is not for you, you can write an eBook and get royalties from selling it online.  Amazon KDP (which stands for Kindle Direct Publishing) is a great place to do so.  Another option is Apple Books.

Like with blogging, once written, the book can continue to provide you with passive income for years. 

If you don’t like writing but do like the idea of receiving royalties on eBooks, you may want to consider creating “low” or “no” content books and selling them on Amazon KDP.  These can be journals (diaries), coloring books, guest books, music composition notebooks, planners, quote books, etc.

If you want a complete guide to making money with eBooks, check out my article: Making Money [Passively] Writing eBooks: A Simple 5-Step Guide.

7. Cash Back Credit Cards

How Much It Costs to Start: $0

Ok – you won’t become a millionaire using this strategy, but it 100% works. Depending on how much you use the credit card, you can generate hundreds (or even thousands) of bucks per year. 

The passive income strategy using cashback credit cards is simple: 

  • Get a cashback credit card that offers a good cashback rate (2% seems to be pretty decent)  
  • Put as many of your expenses as you can on your cashback card  
  • Pay off your balances in full each month (can’t mess this part up!) 
  • Collect the cashback rewards for some nice passive income

8. Online Courses

How Much It Costs to Start: $200 – $5,500+ Source

Another passive income idea that you can pursue is developing an online course and getting income from the sale of that course. 

Video is the prevailing medium for these types of courses, although audio courses and courses with slides and other written materials also exist. There are a lot of tutorials on how to create online courses.  A simple Google search on the topic will give you some great places to start.

Once you have created the course, you can market it through various channels, such as you own website (if you have one), social media, and online course platforms such as Kajabi, Udemy, and Teachable.

9. YouTube

How Much It Costs to Start: $0 (if you are completely broke but have a phone to record video). But realistically, expect to spend between $249 and $500. Source

If you prefer making videos instead of writing, you can start a YouTube channel. As with blogging, you will start to earn passive income (through ad revenue) once you get enough traffic coming to your channel.

Once you create the content, the passive income can begin, but getting there can take a lot of work.  Creating a quality video is not easy.  And like blogging, getting traffic to your channel can be a challenge.  You have to create informative (or at least entertaining) content and have compelling titles, and great thumbnails. You also need to understand how YouTube’s various algorithms work.

But if you can sort through these things and gain traction on your channel, you can make a ton of money through this platform.


So there you have it: 9 low cost strategies for generating passive income that you can start for less than $500. 

If you want more great passive income ideas, check out my ultimate beginner’s guide to passive income [25+ strategies that work], where I cover tons of effective strategies that generate passive income.

If you have no money and no time, but still want to generate passive income (I am talking really passive, like no upfront work involved, no ongoing work, etc.), check out my article on 15 ways to make truly passive income with no money.

On the flip side, if you can manage to invest more than $500 and are willing to devote some time and effort to a real business that can generate awesome levels of passive income, check out my article on the 12 best passive income business ideas. They include things like vending machine routes, laundromats, bounce house businesses, ATM routes, and much more.