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5 Best Passive Income In South Africa

woman relaxing at her desk with her hands behind her head while earning a passive income

What are your chances of generating decent wealth with a passive income in South Africa?

Well, your chances are actually pretty high!

Today, there are many people who have implemented some of these income-generating ideas and strategies and have been using them as a secondary source of income for years.

In this article, we have listed a few passive income opportunities in South Africa that might be appealing to you.

So without further ado, let’s dive in.


What is passive income?

A passive income is a form of income generated from money that is earned with minimal or no effort (passively).

The idea of passive income is that you can earn money without having to exert too much effort on a regular basis. You won’t have to take care of your passive income every day, but you’ll still have to do some work from time to time after you start earning money passively.

There is usually an initial investment of time, money, or other resources associated with passive income ideas. In addition, they require a bit of monitoring or maintenance to keep things working, but you don’t have to spend a lot of time making small talk or committing tens of hours each week.


How to make passive income in South Africa? 

While many South Africans consider passive income as a side hustle, you can actually build real wealth if you decide on multiple streams of income. It’s up to you to find which one suits your interests and lifestyle best. 

With this in mind, adding a side-hustle could help you to make even more money with one of the passive income prospects that we list below. Check out our post on turning your hobbies into side-hustles if you’d like to start a side-hustle of your own.


Passive income opportunities 

We hand-picked a couple of easier passive-income opportunities that are most applicable for South Africans: 


1. Real estate


Rental Property 

Your house is on bond. What is your most suitable option?

  1. Do you rent it out and pay it off faster?
  2. Stay in the house and repay the bond on your own?

It depends on the cost. For some, paying off their own bond is a safe way to put money aside for the future. This is especially true for South Africans that live in areas where houses are more affordable.

While for others that live in more expensive areas, there’s an opportunity to create passive income by buying and renting out a cheaper home in a more affordable area, while continuing to rent their own home (that might be too expensive to buy).

There is no doubt that option 1 is one of the best passive income opportunities in South Africa. Plus, it can help take the pressure off paying your mortgage debt.



Do you have enough space to host a person or two in your place? 

If your answer is yes, then it may be time to use that extra space to make money with Airbnb. Being a gracious host is a dream come true for many travellers around the world.

Using Airbnb, you can also connect with guests who are interested in renting your space for a special occasion. So, host them, have fun, get paid, and earn more passive income from your Airbnb. 

Pro tip: Want to be as hands-off as possible? Use an Airbnb management service to manage your Airbnb for you. Do your research and find the best solution in your city.


2. Fractional investing


Fractional property investment 

Now, you can own a fraction of a house, and earn money from property rental or value appreciation without owning an entire property.

A popular fractional-property investment platform in South Africa is, Easy Properties (you may already know Easy Equities) — check out the platform if you’re interested in earning a passive income from a fractional property investment in South Africa.


Impact farming

This is a new initiative that helps to fund farming initiatives and lets investors (you) earn a passive return on your investment by owning a portion of the venture.

Fedgroup, offers a variety of impact-farming opportunities for South Africans. Use the platform to invest in a blueberry bush, a lettuce stack, a hemp plant, a beehive, a moringa tree, a macadamia tree or a solar panel to start earning a passive income.

It is possible to make a very safe investment in impact farming, and it can produce an income for the investor as long as the farm produces a profitable harvest.

Check to see if you qualify to reduce your debt instalment with our quick quiz

3. Earning interest with bonds, stock, ETFs

Investment in financial instruments such as bonds is a common method of earning passive income. For lending them money, you will receive interest payments as well as protection from your initial investment. They are a safe investment, but the drawback is they offer lower interest payments.

Stock market investing involves more risk since there are no guarantees, but the idea is to buy shares that will appreciate in value over time. Dividends will also be paid on good shares.

In addition to being low-cost and diversified, ETFs are also considered low-risk investments since they hold stocks or other securities. Individuals who are looking to diversify their portfolios should consider ETFs as an ideal asset class.

Tip: start with a tax-free savings account


4. Selling digital products

To make passive income in South Africa, you can create educational products, membership sites, templates, and tools to sell to others.

Unlike some of the other forms of passive income, this will take a little more up front effort, but digital products can be reproduced infinitely, so once you’ve made something, you’ll be able to sell it an infinite number of times.

It takes work at the beginning to create the product, but once it is finished, it can be leveraged to produce a passive-income. Get your product out there and let the sales roll-in.


5. Royalties 

Basically, a royalty is a payment made by a third party to the owner of a product or patent for the use of it.

As a general rule, royalty rates are determined by factors such as the exclusivity of rights, technological advancements, and alternative options. It can be for book royalties, franchise royalties, patent royalties, mineral royalties, and performance royalties.


Final thoughts

Remember: Passive income is not your job, it’s not freelancing, and it’s not an online job. You earn passive income by doing something once and then reap the rewards years later.

Having a passive income in South Africa can help you elevate your finances, help you get out of debt, and fill in the gaps that your 9 to 5 job can’t. It won’t take long for the rewards of your work to become apparent if you keep the right mindset and are consistent.

Do you know whether you qualify?

Find out if you’re eligible to reduce your debt and protect your belongings.

Disclaimer: This website and any information herein is not intended to be, nor does it constitute, financial, tax, legal, investment, credit, or other advice. Before making any decision or taking any action regarding your finances, you should consult a qualified professional directly.

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