11 Effective Ways to Earn Passive Income in India in 2024

Source: assetmonk

Whether you’ve got a steady 9 to 5 job, run your own business, or you’re a freelancer, one of the best ways of regularly earning additional money without putting in a lot of effort is to find some passive income ideas in India.

Passive income is defined as earnings you get from a rental property or some other enterprise in which you are not actively involved. Essentially, it is money that doesn’t require you to do a lot of “active” work to earn. The main goal is to basically earn money while you sleep.

To do this, you might have to invest time or some money to create something upfront, and then this will help you to generate income down the road, with only a little additional effort along the way.

1. Investing in Rental Properties

Real estate investing is one of the best known ways to earn a passive income. With a little bit of investment, you can buy and rent out homes, offices, apartment buildings, and other types of real estate. Then you will be able to earn rental income each month, and even hire a property manager to manage day-to-day issues with tenants and collect any payments.

• What is the investment required? – Having a rental property requires a bit of work and financial investment at the start.
• How much can you earn? – Depending on how many properties you own, the types of tenants, and the rent amount, you can make a significant amount of money through rental properties.
• What to keep in mind? – There are a few financial risks to owning a property, such as being unable to find tenants, or face an increased mortgage. So, ensure that there is a market for your property before you invest.

2. Rent out your Home

If you are unable to invest in a separate property to rent, you can rent out your current properties by partnering with a rental company like Airbnb. This method will work well if you have spare rooms, or you have to be out of town for a while. You can even rent out your car to make a bit of extra money. 

• What is the investment required? – This requires very little investment and minimal extra work.
• How much can you earn? – Your earnings will be determined by the size of your property and the rental company you partner up with.
• What to keep in mind? – While there is very little financial downside here, you should always be careful when letting strangers stay in your space.

3. Investing in Stocks

When you make a stock investment, essentially, you purchase shares of a company. And when those shares appreciate in value, you will get payment (or dividends) at regular intervals from the company. Since these dividends are paid per share of stock,  the more shares you own, the higher your earning.

Many people are wary of investing in the stock market as there are no guarantees. But, if you diversify your portfolio and reduce risk, it can be a great way to earn you a passive income slowly over time.

• What is the investment required? – When you invest in the stock market, you might have to put in some work at the start to find the right stocks to buy. Apart from this, you will also need to make an upfront monetary investment.
• How much can you earn? – Profitable shares will result in high dividends for you, and can be a great way to build lasting wealth.
• What to keep in mind? – There is always a bit of risk in investing in the stock market, as when the companies are not doing well, or during times of uncertainty, the value of your shares may reduce. But, you can minimize this risk by opting for investing in exchange-traded funds (ETFs) or high-dividend stocks from financially stable companies.

4. Selling Digital Products

Digital products refer to types of downloadable or stream-able media. These include templates, plug-ins, PDFs, printables, e-books, audio or video courses, or UX kits. The content of these products can vary greatly, from recipe collections to design templates and wireframes. Once this product is created, you can generate a passive income by distributing and selling them through sites such as Udemy, SkillShare, or Coursera.

• What is the investment required? – To have a product to sell to others, you need to put in a little bit of work at the start to create the product.
• How much can you earn? – Digital products have high profit margins since you only need to make the asset once, but you can sell it as many times as you want online.
• What to keep in mind? – Since there are a lot of products out there on the internet, you might have to create something unique, or something that addresses a specific market to make good money from it. You also need to know how to market your products.

5. Affiliate Marketing Schemes

Affiliate marketing is a way that you can help brands that are looking for ways to spread the word about their products. You become an affiliate to a given brand or company like Amazon, and you promote their products to your followers or readers, including a link to the products on your site or social media account.

Then you can earn a passive income from commissions for marketing their products online by gaining a piece of the profit from each sale you help to make. Thus, the more people who buy these products using your specific link, the more money you get.

• What is the investment required? – While this might involve very little monetary investment, you will have to put in a significant amount of time at the start to build up a large social media following a website, blog, or growing an email list.
• How much can you earn? – Affiliate marketing is a growing industry, and thus there is a lot of scope for high earnings.
• What to keep in mind? – There is very little cost or risk to joining an affiliate program, and you can also easily scale up by promoting new products to your audience

6. Become a POSP Insurance Agent

A POSP, or Point of Salesperson, is an insurance agent. They work with insurance companies to sell insurance policies to customers as per their personal needs. While this requires an initial active involvement, you can also earn a passive income when these customers renew their policies.

You can find out more about the steps, requirements, and regulations for becoming a POSP agent here. 

• What is the investment required? – If you work hard initially and build up a good customer base, you just renew policies with very less effort and earn a passive income.
• How much can you earn? – Your income would be based on a commission, and so, the more policies you sell, the faster you can earn a high income.
• What to keep in mind? – There are not a lot of risks to becoming an Insurance POSP. Anyone with an aptitude for selling can become a POSP Agent, as long as you have a smartphone and a good internet connection.  However, it is always good to remember to read up on the company you are joining, and to read any contract before signing.

7. Go for Blogging

You can begin with a blog, as blogging is decent and passive income in the case of many individuals. Time investment is essential in building a successful blog, as well as your hard work. It is quite a lengthy procedure, and you have to continue putting up fresh and high-quality content alongside good SEO strategies in order to get people to read you.

Platforms like Tumblr, Blogger, or WordPress allow you to create a blog without extra costs.

• How much can you earn? – The more people who visit your site and read your content, the higher the revenue you can expect. It could be from ₹2,000 to ₹15,000.

• What to keep in mind? – Establishing a blog that grows well turns out to be a time-consuming process, and you have to be persistent. Focus on giving your target audience value, and be patient enough because it may take months or even years to have the desired outcomes.

8. Consider Peer-to-peer (P2P) Lending

If you have additional capital and want to venture beyond traditional investments, try becoming a peer-to-peer lender. Register on a site that links lenders to borrowers and start extending personal loans to persons or small businesses as a side hustle. You will get your money back with interest, which makes it the modern way to earn passively.

• How much can you earn? – Your possible profits via P2P lending vary depending on the platform you choose and the risk level you are comfortable with.

• What to keep in mind? – Never forget about the possibility of defaults when lending money. To avoid this risk, diversify your portfolio by investing in different loans and double-check the borrower's financial history before deciding.

9. Become a Social Media Influencer

Using social media is a brilliant way to earn some extra money. Platforms, such as Instagram, X (earlier known as Twitter), and Facebook are popular for becoming social media influencer. You can create videos, post photos, and engage with your audience to make money. Advertising various merchandise and getting involved along with your fans are methods to earn. Influencers are now the go-to for advertising and promoting products. 

• How much can you earn? –  There are many platforms where you can earn by making a video on Instagram, which can be as low as ₹20,000 and as high as ₹50,000. Similarly, video posting on YouTube can earn you as low as ₹20,000 and as high as ₹39,000.

• What to keep in mind? – Sharing relevant content always keeps your target market engaged and fascinated. Nobody enjoys following an inactive social media account.

10. Open Homestays in Ideal Locations

If you reside in a bustling tourist destination, consider this idea. Convert the spare areas in your own home into homestays for visitors. It is similar to renting out, but for shorter durations, and you can stay at home, too. Living in a popular area ensures a steady stream of income. 

• How much can you earn? – Your earnings from opening homestays depend on various factors such as location, amenities offered, and demand.

• What to keep in mind? – When considering opening homestays, remember to factor in aspects like local regulations, safety measures, maintenance costs, and guest management.

11. Make a Mobile Application

Developing a mobile app can be a lucrative avenue for passive income generation through consideration and answering a particular problem or demand. In the process of app development, you should be aware of all the steps: finding the problem, designing the app and its interface, and building and testing it. 

After finishing, you will be able to share the app on app stores like Google Play or the App Store, where the users can download it.

• How much can you earn? – It depends on your in-app purchases, subscriptions, or ads. 

• What to keep in mind? – When creating a mobile app, focus on developing a useful solution that addresses a specific need. Additionally, use effective marketing strategies to ensure visibility and user acquisition.

Before diving into passive income  in India, consider the following factors:

1. Research and Learn: Before jumping into any passive income venture, take time to learn about it. Understand the potential rewards and risks and how they align with your financial goals.

2. Be Patient: Passive income is not a quick fix. Achieving significant returns requires investing time and patience. You should not expect instant results and be prepared to wait months or even years.

3. Invest Time and Money: While passive income does not require constant effort, you will need to invest some of your time initially for long-term benefits.

4. Understand Taxes: Remember that passive income comes with tax implications. Know the tax laws and regulations beforehand. Some passive income sources have tax advantages, like dividend stocks or certain insurance policies.

5. Beware of Frauds/Scams: Although the digital world is quite safe, there is no harm in being cautious. Avoid engaging with random sites/links and ensure your safety.

Exploring passive income ideas in India can offer a lucrative opportunity to boost your earnings with minimal effort. By conducting thorough research, exercising patience and understanding tax implications, you can pave the way for a sustainable stream of passive income in the long run.