Summary
- There are many options for producing monthly income, from real estate to dividend investing. Some have more risks or rewards than others.
- Running a business is an option for generating monthly income, but there are risks to consider.
- Finding the right investment for monthly income is a complex decision. Unbiased can match you to a financial advisor who can help you evaluate your choices.
12 investments that pay a monthly income
Monthly income investments can provide cash flow while helping your money grow.
If you’re looking for a monthly income beyond your 9-5, take a look at these 12 ideas to see how much money they could possibly generate.
All examples of potential returns are illustrative. Investments can rise and fall, returns are not guaranteed. For investment advice, seek expert financial guidance.
1. Real estate
If the idea of providing safe and clean housing for a family or a relaxing space for vacationers in a short-term rental is appealing, real estate might be for you.
To truly succeed, you need to own real estate in a strong market and be good at creating systems and managing maintenance.
Directly owning real estate isn’t the easiest way to earn a monthly income, considering the amount of work it requires. However, the ability for real estate to appreciate while providing monthly income cannot be overlooked.
Rewards:
- Property appreciates while you’re earning income each month
- Build your net worth exponentially
- Create beautiful spaces for families
Risks:
- Non-payment from renters
- Wear and tear on property
- High maintenance costs
- Turnover and vacancy costs
What this could look like in practice:
Invest $400,000 in a duplex that rents for a total of $4,000 in monthly income. Subtract expenses of $2,600 from gross rents of $4,000 for $1,400 in monthly income. Numbers will vary depending on your area, loan, property, and other financial details.
2. Rent out a room, car, extra space, or your house
If you have an extra room, car, storage space, or anything else that can be rented out, you could make a monthly income. It can be as simple as it sounds: connect with a renter, get paid, and repeat.
Rewards:
- Rent out things you already own and are not using
- Low upfront investment
- High monthly income
- Flexible
- Easy to earn money on a platform
Risks:
- Damage to your personal property
- Insurance and liability issues
- Regulations could limit your business
What this could look like in practice:
Rent out your car on Turo. The hosts earn an annual average of $10,489 for one car, which works out to around $874 per month.
3. Annuity
An annuity is a contract that provides guaranteed income, either immediately or in the future.
You can invest in an annuity either in a lump sum or through regular payments. You typically purchase an annuity from an insurance company. There’s no market risk, but they offer lower returns than investing in the market.
- Death benefits
- Guaranteed income for life
- Tax-deferred growth
- No market risk
Risks:
- Lower returns
- Difficult to get out of
- High fees
- Complex and easy to misunderstand
What this could look like in practice:
Invest $400,000 in a Single Premium Immediate Annuity (SPIA) with a 10-year certain time period. You’ll receive $4,074 per month for 10 years for a total of $488,880 in payments.
4. Dividend Investing
Dividend investing is a strategy where you buy shares of companies that pay cash dividends.
You benefit from both the appreciation of the stock and regular income. Brokerages offer various ways to invest in dividends, including dividend stocks, dividend index funds, dividend ETFs, and other options.
Rewards:
- Passive income
- Compound growth when dividends are reinvested
- There may be tax advantages
- Dividends could be cut
- Market risk
- Limited growth as companies pay out dividends instead of reinvesting
What this could look like in practice:
You buy a $400,000 dividend ETF that has a yield of around 4%. The $400,000 investment would produce $16,000 in dividends for the year, or approximately $1,333 per month.
5. REIT
A REIT, or real estate investment trust, is a way to invest in real estate without directly owning a piece of property.
Brokerages often sell REITs, but you can also buy REIT funds or invest directly in a company like Fundrise or Crowdstreet. By law, REITs must distribute 90% of annual taxable income, so they’re an attractive option for dividends.
Rewards:
- Higher dividend yield
- Not having landlord duties
- More liquid than owning property
- Portfolio diversification
Risks:
- Dividends can be cut
- Susceptible to market volatility
- Returns are correlated with interest rates
- Taxed as ordinary income
What this could look like in practice:
A REIT that earns a return of 4.25% with $400,000 invested works out to be $17,000 per year, or $1,417 per month.
6. CDs
CDs, or certificates of deposit, offer guaranteed income for depositing money with a financial institution. You can find CDs at your local bank, credit union, an online bank, or a CD broker. They’re a safe investment option, but typically don’t have high yields except in times of high-interest-rate environments.
Rewards:
- Low risk investment
- Fixed interest rate
- Passive income
- Many options to choose from
Risks:
- Money is locked up for a period of time
- Lower return
- Withdrawal fees
What this could look like in practice:
Deposit $400,000 in a CD with a 4% interest rate. Yearly income would be $16,000 or $1,333 per month.
7. Small Business
Opening a business is not for the faint of heart, but it could also be more rewarding than you realize.
If you’re great at developing systems and leading others, you may want to consider starting a business for monthly income. It’s not passive, but it can be more rewarding.
Rewards:
- Start something you love
- High profit margins and ROI
- Unlimited upside
- Tax advantages
Risks:
- Startup costs
- Inconsistent income
- Large time investment
- Location dependent
What this could look like in practice:
Vending machines make an average of $75 per week. By investing $30,000 into a vending business with 10 machines at a cost of $3,000 each, you could generate $750 per week, or $3,000 per month.
8. Money market account
Money market accounts (MMA) are a type of savings account that have a higher interest rate. There’s a limited upside, however, and it has some restrictions on transactions and a minimum balance requirement.
Rewards:
- Liquid and easy-to-access funds
- Higher yield than a savings account
- Secure funds
- Convenient banking features
Risks:
- Minimum balance requirement
- Few transactions allowed
- Some MMAs have fees
- Limited upside and lower returns than stocks
What this could look like in practice:
A money market account with a 3.5% yield with $40,000 deposited would earn approximately $1,400 per year, or $116 per month.
9. HYSA
A high yield savings account (HYSA) is similar to a money market account in that deposits earn a higher interest rate while maintaining their liquidity. There are account requirements you need to meet, such as minimum deposit requirements or a monthly withdrawal limit.
Rewards:
- Great liquidity
- Higher yield than a traditional savings account
- Funds are safe
Risks:
- May have fees
- May have minimum account balance requirements
- May have limited withdrawal requirements
What this could look like in practice:
A HYSA with a 4% yield with $40,000 deposited would earn approximately $1,600 per year, or $133 per month.
10. Bonds
A bond is essentially a loan to a government or corporation when they need to raise money. Investing in bonds, whether it be corporate bonds, municipal bonds, treasury bonds, mortgage-backed securities, high-yield bonds, or any other type of bond can provide steady income. You’re paid as the bond issuer repays the loan at regular intervals.
Rewards:
- Yields typically between 3.50% and 4.60%
- Interest is generally tax-exempt for municipal bonds
- Less volatile investment
- Low risk
- Good diversification
Risks:
- Most pay out only twice per year (though there are ways around this)
- Bonds can be repaid early, and you’ll need to find another investment
- Bonds may not keep up with inflation
- If you need to sell before the maturity date and the bond’s price has fallen, you’ll lose part of your principal
What this could look like in practice:
You buy $40,000 of municipal bonds paying a yield of 3.5% per year. This results in $1,400 in annual income, or $117 per month. This looks even better when you consider the tax advantages.
11. Mutual funds
A mutual fund is a pool of investments funded by a group of people. Mutual funds can both appreciate and produce income from dividends.
Rewards:
- Great liquidity
- Income from dividends
- Diversified by the investments included in the fund
- Actively managed to beat the market
Risks:
- Mutual funds fluctuate with the market
- Distributions may be taxable
- Expense ratios for different funds could be high
What this could look like in practice:
Investing $40,000 in a mutual fund with a 5% rate will earn $2,000 per year, or $167 per month.
12. Peer-to-peer lending
Peer-to-peer lending is where you loan money to borrowers as if you’re the bank.
It’s common to use a platform to connect borrowers with lenders. Monthly income from peer-to-peer lending comes from the payments borrowers make back to you.
Rewards:
- Control over what investments you choose
- Monthly income
- Yields could range from 8.86% to 13.08%
Risks:
- Higher default risk
- Income is reduced as the loan is paid off
- Low liquidity
- Interest is taxed as ordinary income
- Platform fees
What this could look like in practice:
Investing $40,000 with a return of 10% annually would result in income of $4,000 per year, or $333 per month.
Get expert financial advice
When you’re looking for a place to put your money to help you earn a monthly income, who better to ask than an expert financial advisor?
If you’re looking for a financial advisor to help you sort through your investment options, get matched with an advisor through Unbiased. It’s an easy way to find a financial advisor that can help you today.
Fact checked on 10/28/2026