One of the most popular topics in the world of personal finance is passive income. It’s not hard to figure out that most people would love to make money with minimal effort, but finding practical and realistic ways to do it can be more challenging.
Starting or buying a low-maintenance business is one option for generating passive income. These businesses are usually side hustles that generate extra money as opposed to being a primary source of income, but with these income-producing assets there are possibilities for scaling up.
While these businesses are often considered to be sources of passive income, they are not 100% passive. As the business owner, you’ll need to be involved to some degree. Most of these businesses are able to run with minimal involvement from the owner, but you’ll still need to oversee the business and put in some time and effort, even if it’s not constant effort like some other business models.
If you’re looking for low-maintenance business ideas, hopefully the options covered here will give you some possibilities.
When it comes to low-maintenance business ideas, running a laundromat is often one of the first types of businesses that is mentioned. It can be a great option because many laundromats operate with very little involvement from the owner, and often the business will operate with no employees present.
Customers are able to come use the washers and dryers on their own with no need for staff to be present, although some owners choose to have an employee present for safety reasons and to help protect the equipment.
In order to run a laundromat, you’ll need to rent the space (usually in retail strip malls), get commercial washers and dryers, and have a functioning change machine.
2. Car Wash
A car wash business is similar to a laundromat in some ways. The business can function on its own with very little involvement from the owner or employees.
There are basically two different types of car washes. The first would be a self-serve manual car wash where customers would pull in, pay, and then use the provided equipment, water, and soap to wash their own car. The second type would be an automated car wash where the customer would pay and then drive through the car wash. Both types are possibilities if you’re looking for a low-maintenance business idea.
To have your own car wash, you’ll need land (rented or owned), as well as the equipment. You may choose to have a worker present, but many car washes function without any employees on-site at most times.
3. Vending Machines
I’m listing this as “vending machines”, but aside from vending machines, it could also include similar things like crane/claw games and small gumball machines. In each case, you would own the machine, find high-traffic locations to rent, and keep the machine stocked.
You might be able to get your machines in restaurants, retail stores, hotels, office breakrooms, and other places that have a lot of foot traffic. In some cases, you would need to pay to rent the space, or you may be able to come up with another agreement with the host/owner of the property.
These businesses are low-maintenance because they can generate income around the clock without the need for any personal involvement. You just need to make sure they stay stocked and deal with any maintenance issues as they arise.
To get started you’ll need some machines, which can be purchased new or used. You can reach out to local businesses, offices, schools and universities, or any other place that has a lot of visibility. Once you get your machine in place, you’ll need to stock it yourself or hire someone to stock it for you. You can scale up and grow your business with more machines and more locations.
Compared to some of the other options on this list, this one comes with low startup costs.
4. Self Storage
Almost every town has at least one self-storage business where people can rent storage units. There is a high demand for storage units in a lot of places, and that creates an opportunity for entrepreneurs like yourself to start a low-maintenance business.
Smaller self-storage businesses often operate without an employee on-site at all times. Others opt to have the owner or manager living on-site for safety reasons, but that’s not always the case.
One of the nice details about this business model is that it generates recurring income. Your customers will be paying monthly rental fees, so it’s great for building a profitable business.
To get started, you’ll need some land (rented or owned) as well as the storage units.
Dropshipping is an ecommerce business model that does not require you to purchase or handle inventory. When a customer places an order through your website, the order will be shipped from a warehouse straight to the customer. You’ll earn a certain amount for each sale, but without the hassle and risk of buying inventory.
From the buyer’s perspective, the process is exactly the same as buying from a retailer. In fact, the customer probably has no idea that they are buying from a dropshipper. The product arrives to them and looks like it has been sent by you.
One of the major challenges of running an ecommerce business revolves around inventory. Buying inventory requires a lot of capital and cashflow is a constant challenge for growing ecommerce businesses. Holding inventory also means financial risk, since you will be on the hook if the inventory doesn’t sell.
But with dropshipping, you can avoid that risk and the challenges related to cashflow. The downside is, your profit margins will be smaller with dropshipping.
If you’re interested in learning more, please read How to Start a Dropshipping Business in 48 Hours.
6. Private Label Ecommerce
A private label brand does not manufacture its own products. Instead, they hire a manufacturer to create the product and put their branding/logo on the product.
Private labeling is a very popular business model for Amazon sellers. My wife and I ran a private label business selling on Amazon for about two years and did pretty well by running the business as a side hustle. We found a manufacturer in China (using Alibaba) to create our products and then we sold them on Amazon. By selling private label products through Amazon FBA you are essentially outsourcing the manufacturing process, as well as everything related to order fulfillment and customer service. And Amazon provides a massive platform and plenty of potential exposure.
A private label business can be relatively passive, depending on how you have it set up. Ideally, you’ll hire a company to inspect the products in China before they are shipped (assuming your products will be manufactured in China), and then shipments will be sent directly to Amazon’s warehouses or to a third-party that will store the inventory for you until it need to be sent in to Amazon. With this approach, the majority of the work will be off your hands.
A private label business gives you the potential to earn higher profit margins as compared to a dropshipping business, but it also requires more capital for inventory. Your startup costs will be higher, and as your sales increase and you expand to add more products, your inventory costs will also rise.
If you’re interested in this business model, please read my guide to selling private label products with Amazon FBA.
While there are a lot of things that you can rent out (see my article 20 Things You Can Rent Out for Extra Money), some will give you higher income potential than others.
One of my favorite opportunities right now is to rent out your car through Turo or Getaround. A few weeks ago I published an interview with Justin, who recently started a car sharing business and is already making more than $2,000 in profit per month with just a small investment of his time.
Another opportunity is to rent out an RV, if you own one. Most people who own RVs only use them a small percentage of the time, and they sit unused the rest of the time. RVs have a lot of rental value, and by simply renting out your RV occasionally you can make a nice side income. Websites like RVshare and Outdoorsy allow you to list your RV so potential renters can find it.
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8. Cell Phone Towers
If you have land, you may be able to make a significant amount of money by leasing it out for a cell phone tower. According to Vertical Consultants, the average cell phone tower lease generates $45,000 per year.
In order for this to be an option for you, you’ll need to have the land available and be in a location where cell phone towers are needed. With the rapid expansion and improvement of wireless networks, carriers are constantly analyzing new locations to place their towers. A lot of it will be outside of your control and you may have to wait a while until your location is of interest to the carriers, but if your location is chosen, it could be a nice payday.
If you’re interested in this possibility, please read 7 Steps to Get a Cell Tower on Your Property.