7 Creative Sources of Passive Income To Consider in 2025
Written by
Angela Mae
Edited by
Rebekah Evans
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With 2025 less than two months away, many people are starting to think about their financial goals for the new year. In fact, the Pew Research Center found that 61% of people who make New Year’s Resolutions do so with finances in mind.
Whether you plan to wait until the after the holidays to start improving your financial situation, or you want to get started now, there are many creative sources of passive income to help you achieve that goal.
Invest In a Short-term Rental Property
Rental properties are a popular way to create passive income, and short-term rental properties in highly popular tourist destinations can be even more lucrative.
“Not only can you maximize rental income during high-demand seasons, but you also gain the unique perk of having your own getaway,” said Jen Yacoube, CFP, wealth advisor at Adero Partners. “This strategy blends financial gain with lifestyle benefits — a win-win for savvy investors.”
Just know that rental properties typically require upfront capital and, unless you go through a property management agency, ongoing maintenance. Depending on your goals, this might not be quite as “passive” as you’d like.
Reinvest Rental Property Returns
If you go the rental property route — even if it’s long-term — reinvest the profits into new properties. That way, you can build upon your existing returns to gain even more.
“Over time, each new property can generate more income to fuel your portfolio’s growth, gradually paving a path to financial independence,” said Yacoube. “This method is particularly powerful, because it’s sustainable, steady and capitalizes on compounded growth over the long term.”
According to Yacoube, real estate investing also has its share of tax advantages. You may be able to deduct things like property taxes, mortgage interest and even depreciation from your taxable income.
Rent Out Extra Space
Not everyone has the money to purchase a new property. If you don’t have the funds, but you still want to make some extra cash, consider renting out a space you already have. You don’t have to stick with the typical “room in your house,” though. There are other things you can rent out.
“You can rent out an extra bedroom, storage space in your basement or attic, or a parking space in your driveway or garage,” said Ryan Barone, co-founder and CEO at RentRedi. “Use that income to pay down your mortgage and build equity faster or save up for something bigger.”
If you do decide to rent out a room or home, you could make some decent returns. The average Airbnb host earns roughly $14,000 a year. But be sure to account for things like property maintenance, cleaning and taxes.
Use a High-Yield Savings Account (HYSA)
To keep things truly passive, avoid spending and save instead.
“One of the easiest ways to earn passive income that isn’t acknowledged enough is simply not spending your money,” said Erika Kullberg, an attorney, personal finance expert and founder of Erika.com. “Technology makes it easier than ever to spend money but also makes it easier to save money. Find an online-only bank offering an impressive APR on saving deposits and start saving. You can earn money simply by not spending money.”
Create Something With Ongoing Returns
Sometimes, the first step to building passive income is to invest in yourself and your skills. After that, you can design and sell something that keeps bringing in extra cash.
“You can create a digital product or online course with the money you earn from interest and start generating extra revenue each month,” said Kullberg.
Get as creative as you’d like with this one. You could, for instance, sell an online course where you instruct people in how to play the ukulele.
Invest In Traditional Assets
When you earn money from a high-yield savings account or similar investment, you can always reinvest the returns. That way, you’ll earn even more from what you’ve already made.
“You can even use the money you earn to invest in traditional investments — which are also a form of passive income — or to invest in yourself,” said Kullberg.
Traditional investments include stocks, bonds, commodities, mutual funds and real estate.
Get a Certificate of Deposit
If you don’t need access to a set amount of cash for a while, you could get a certificate of deposit (CD). These typically have higher returns than even HYSAs and can also give you reliable passive income — just over a potentially longer period.
“While many forms of passive income can involve risk — like buying a rental property or investing in stocks — savings products are extremely low risk. If you are lucky enough to have some savings, investing in a high-yield CD … can bring returns as high as 5%,” said Ben McLaughlin, U.S. president at Raisin. “And as long as you follow the federal insurance guidelines, your cash investment is 100% protected, making it one of the safest investments there is.”
Choose a financial institution that’s FDIC-insured if you go this route.
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