4 Passive Income Streams for Gen Xers Retiring in the Next 5 Years

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Are you a Gen Xer, age 45 to 60, considering retiring in the next five years? With a passive income stream, you can add to your nest egg before you stop working. Many passive income opportunities take little effort and a minimal investment.

From real estate to banking and more, GoBankingRates brings you passive income streams for the average Gen Xer.

What Exactly Is a Passive Income Stream? 

Passive income can be earned with little to no ongoing effort, unlike a traditional job. While it might take some work or investment to get started, the idea is to generate a steady stream of income over time. A good passive income idea can turn into a self-sustaining source of income. Below are a few passive income streams you can tap into now.

Join an REIT Platform

• Investment: $500

If you don’t have the capital to buy a home or building outright, consider a real estate investment trust (REIT) platform. The gateway to entry can be as little as $500, so it’s a good opportunity for people in a lower middle-income bracket with some savings. A REIT is a low-risk investment owned by multiple individuals. Examples of REIT platforms include FundRise, YieldStreet and RealtyMogul.

Open a High-Yield Savings Account (HYSA)

• Investment: $0 

A high-yield savings account boosts your income just by keeping your money in the bank. These higher-interest accounts earn more than a traditional savings account. While the average return of a typical savings account earns 0.43%, according to the FDIC, some HYSAs offer rates above 4%. It’s important to note that interest rates can fluctuate with the market and the qualifications differ based on your bank.

Rent Out an Additional Parking Space

• Investment: $0

If you live in a two-bedroom apartment with two parking spaces or have an empty garage, consider renting one out. If you have an extra parking space in an urban area with a high demand for parking, like Santa Monica, California, you can earn several hundred dollars a month. 

Renting a parking space or garage space for $500 per month produces a return of $6,000 per year and $30,000 in five years. If you live in a multi-unit residential building that supplies parking, check with the landlord or association to avoid being fined.

Invest In Rental Property

• Investment: $50,000 or more

If you have some capital to invest, buying or building a rental property can be lucrative. If you have the space on your property and your city allows it, build an accessory dwelling unit (ADU) to rent out for additional income. While the property will need to be maintained, you can hire a property manager to find tenants, collect the rent and handle maintenance requests. 

If building on your property isn’t an option and you have money saved to invest in real estate, you can earn a monthly income with a rental property.

Buyers can find great deals purchasing distressed properties in foreclosure or owned by the bank. You can also find pre-closure properties in public records. However, many of these homes have fallen into disrepair since the owners have been struggling with mortgage payments. A distressed property can be a wise investment while helping owners get out of debt.

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