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Passive income ideas that really work, according to experts

There are multiple, effective passive income opportunities to pursue right no. Getty Images

With inflation and interest rates high, many Americans are looking for ways to pad their income and ease the financial strain. Passive income streams are one way to do it. You can create passive income in endless ways. And though paid surveys are often mentioned in this capacity, they take regular legwork and will require time to pay off.

Don't fret, though. There are still some expert-backed passive income strategies that actually work. So, if you're looking to increase your income without putting in a lot of day-to-day effort it helps to know your best options.

Earn more on your money by transferring some to a high-yield savings account now.

Passive income ideas that really work, according to experts

Here are four effective ways to generate passive income now, according to the experts we spoke to.

Open a high-yield savings account

If you really want guaranteed earnings, a high-yield savings account can offer it. In today's market, many accounts are offering 4% to 5% APYs or above - meaning about $500 on a $10,000 deposit annually.

This strategy also "keeps your emergency fund safe and accessible but still allows it to earn money for you," says Kendall Meade, a certified financial planner for SoFi.

Certificate of deposit (CDs) are a similar type of investment, only you need to keep the money untouched for a few months or years. You'll then get a guaranteed return once the account matures.

See how much more you could be earning on your money with a high-yield savings account here.

Rent out your property (or closet space)

Renting out properties — as with Airbnb or VRBO, for instance — is a good way to make passive income, experts say. With properties, there's a big upfront investment, but if you bring in a property manager to handle the booking, cleaning, and marketing of the property, all you're left with is a cut of the rents. 

You can also rent properties out to full-time tenants. Again, you'd need to hire a manager to deal with repairs and other on-site issues, but other than that, it could offer stable, monthly earnings for the long haul.

If you don't have a full property to rent (or can't buy one), you can also use various apps to rent out storage space (Neighbor), parking space (SpotHero), yard space (Sniffspot), or a pool (Swimply) you already own. All it takes is setting up a profile and accepting bookings once they come in.

Rent out your belongings

You can also rent items out around your home — tools, outdoor gear, sporting goods, party equipment, and more — using tools like RentMy, Fat Llama, or Yoodlize. According to Emily Haleck, head of public relations at at Yoodize one user made $7,000 in the last two years by renting out his paddle boards on the app.

"He paid those off, then bought four more the next summer, paid those off, and was renting out up to 22 boards at a time last summer," Haleck says. "He has more than tripled his initial investment of $1,650 — and that's from renting them out only three months of the year." 

Another user apparently rents out her children's ski gear — skis, helmets, goggles, snow pants, and more — and makes around $1,700 every winter.

Buy into REITs

REITS — or Real Estate Investment Trusts — are another way to capitalize on real estate. With these, you purchase shares of companies that own commercial real estate — income-producing properties like office buildings, apartments and more. You then get a cut of those earnings as an investor.

"By simply opening a brokerage account, you can own stock in real estate companies that own, operate and manage commercial real estate," says Ashley Fox, CEO and financial education specialist at Empify, a fintech startup. "By investing in REITs, each month or quarter you will receive dividends — passive income — for every share you own."

Fox estimates that REITs can deliver anywhere from 4 to 17% returns annually. "And you can start with less than $200," she says. 

Share your skills

Another option is to create educational content that generates cash. If you have specialized knowledge in a topic, you can create courses for online schools like Udemy or self-publish books and list them on Amazon. You then earn royalties based on sales of these items.

That's what investment advisor Andy LaPointe and founder of Traverse Bay Farms has done to create a passive income stream. "I currently have over 4,400 students who have purchased my courses," he says. 

LaPointe also has a YouTube channel he's working to get up and running. Once he reaches 4,000 viewed hours, he can start monetizing his content and earning cash through in-video advertisements. The best part, he says, is that it required very little upfront investment. "It simply just takes time to create the course and write the book," he says. 

Explore your options

There are many ways to make passive income, but the best strategy will depend on your skill set, budget and how much time you're willing to put into the set-up. If you're not sure how to establish a passive income stream just yet, consider speaking to a financial advisor. They may be able to point you toward smart ways to boost your income. In the interim, consider opening a high-yield savings account to start earning today's elevated interest rates as soon as possible.

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