What Is Passive Income? Top Ideas for 2025

There’s hardly a person in the world who would mind earning a couple of extra dollars. And it shouldn’t necessarily be a second job or moonlighting. Passive income is a comparatively less demanding and time-consuming option. Let’s find out what exactly passive income is, ways to make it, and what the risks are.

This text is created to provide general information and inspiration. It’s for informational purposes only and shouldn’t be considered professional advice or a guideline to follow. Anyway, whatever option you choose, you’ll likely need a good document scanner. Whether it’s for applying to an account on one of the platforms mentioned in the text, signing papers, or filling out forms, iScanner will be of help. With the app, you can scan and sign documents for free. And if you’re a premium user, our AI will assist you by reviewing contracts and spotting potential issues to help you avoid mistakes.

What’s Passive Income?

According to the Internal Revenue Service (IRS), which is responsible for administering federal tax laws in the USA, passive income comes from two main sources: business activities where you don’t actively manage the business, and rental activities (unless you’re a real estate professional). Passive income can sometimes come in other forms, but the important thing is that it’s not connected to your regular jobs, whether it’s your first, second, or fifth. In other words, it’s income you earn without being actively involved, unlike employment or contract work.

Passive Income Benefits

• It gives you more stability. It allows you to search longer for a new job if you lose one.
• It’s often time flexible. It lets you earn a few extra dollars without devoting all your time and effort (however, this doesn’t mean you shouldn’t do anything).
• It gradually builds your wealth. Even if your passive income is just $50 a month, you’ll get $600 extra each year.
• It contributes to your financial freedom, giving you the confidence to take risks.

Passive Income Ideas

Selling Pictures on Photostocks (No Risks)

Whether you’re an amateur or an experienced photographer, it’s a great way to combine a hobby with a passive income source. This option involves no financial risks as the only thing you invest is your time.

There are plenty of platforms where you can upload your pictures and earn money by selling them. In fact, you don’t have to do it yourself. The platform will automatically pay you fees, taking a percentage of each sale. Some of the most popular ones are Adobe Stock, Shutterstock, Getty Images, 123RF, Dreamstime, and others.

There are two kinds of photostocks. Macrostocks, which are also called premium, pay more but have much higher quality requirements. On microstocks, it’s much easier to upload your photos, and even though the price is lower, you can sell more copies.

In general, you can earn from 10 cents to $30-40 per sale, depending on the site and the terms.

Tips:

• Carefully study the rules of each platform. On some, the platform takes a bigger percentage if you sell fewer downloads, and less if you sell more. Some also ask you to send a few photos and pass a test before you can start uploading.
• Create your strategy. You may focus on popular pictures that people usually want (though the competition will be stronger), or find your own niche and create exclusive content.
• Constantly expand your gallery. 
• Don’t forget to add relevant tags to your pictures. This helps your photos show up in more searches, boosting the chances of someone clicking and buying them.

A pro tip:

• You can earn much more by selling videos. It’s a bit more complicated and requires skills and time to create quality content, but it’s worth it. You can sell footage and videos both on some of the sites mentioned earlier and on specialized platforms like Artgrid or VideoHive.

REIT Investments (Minimal Risks)

REIT stands for Real Estate Investment Trust. It’s a company that owns, operates, or finances income-producing real estate.

The idea is that you don’t have to buy and rent property yourself. Instead, you buy shares in a REIT, which earns money from renting places like malls, apartments, and offices, and you get dividends.

Most REITs are called equity REITs. They own and manage properties like apartments or office buildings, making money mainly from the rent tenants pay. There are also mortgage REITs, which don’t own properties but instead lend money to real estate owners through mortgages. They earn income from the difference between the interest they receive and the cost of their own borrowing. Finally, hybrid REITs combine both owning properties and lending money, but after the financial crisis in 2007, they became rare.

Tips:

• Do some preparation first. Check the REIT’s dividend history to see if it has consistent income. Check how much debt it has, because high debt levels can be risky. Also, pay attention to the property types and locations the REIT invests in, as some areas or sectors might perform better than others. 
• Diversify. Investing in different REITs can help reduce risk.
• Don’t forget that REITs come with risks, including changes in interest rates, economic slowdowns, and issues specific to certain real estate sectors. So, always keep an eye on the economic environment and how it might affect your investment.

Real Estate Investment (Long-Term Option)

If you have enough funds, this might be an option for you. It’s been a tried-and-true way to invest for many years, and 2025 isn’t an exception. You can:

• Buy real estate on the secondary market and resell or rent it out.
• Buy a new apartment to resell or rent out later.
• Buy real estate outside the city.
• Buy commercial real estate to lease for offices, stores, and more.

Tips:

• Be careful when choosing an asset. According to Brett Johnson, a licensed Colorado real estate agent, “The biggest mistake is buying the wrong property at the wrong price.” This, he says, may lead to surprise repairs, empty units, or troublesome tenants.
• Be patient. Real estate is usually a long-term investment. Stay consistent and reinvest profits if possible.
• Be involved. Though real estate investment is a good way to earn passive income, “it’s about making informed decisions based on what your financial goals are and what’s happening in the markets,” said Chad Willardson, president and founder at Pacific Capital, a wealth management firm, in an interview with Newsweek.
• Have a good scanner at hand. Buying, selling, or renting out involves much paperwork. iScanner, a hybrid document scanner and editor, can be a multipurpose solution.

Crowdlending (Moderate/High Risks)

Crowdlending platforms let businesses borrow money from investors, skipping traditional banks. The idea is to make investments beneficial for both parties. Investors earn interest, and borrowers may get better terms than they would from a bank.

It’s as simple as that. First, borrowers apply for a loan on a crowdlending platform. Then, investors fund it. For instance, if $5,000 is needed, 100 investors could each contribute $50. Finally, investors earn money through interest on the loans. Returns depend on how risky the borrower is. Riskier loans can earn you more money, but the stakes are definitely higher.

Tips:

• Carefully study the regulations. For instance, crowdlending in the USA is regulated by the Securities and Exchange Commission.
• Think twice before diving in. The biggest risk is that the business that borrows money may fail to repay the loan. This means you could lose some or all of your investment, especially if you fund high-risk loans.
• Start small to understand how this or that platform works.
• Diversify. Don’t put all your money into a single loan.
• Always check the profile of the business that asks for money. Look at its credit history, score, and the purpose of the loan.
• Avoid high-risk loans, especially if you’re new to this.