The 5 best investments to generate monthly income

At PeerStreet, we want to give our accredited investors the opportunity to generate monthly income. Extra monthly income can be incredibly empowering — and put you on a path that’s more in-line with the life you envisioned for yourself. It can help you live a more fulfilling retirement, or even retire early. It can give you the boost you need to help fund your side hustle, or the freedom to ditch your day job and finally pursue your passion. Passive income can give you the resources to travel more often with friends and family. And it can even help you build wealth faster, creating a self-perpetuating cycle of wealth for future generations. 

Investing in the stock market can be a great option for people looking to build wealth over time. But where can you invest when you want to earn passive income every month that you can use immediately? Here are some of the best opportunities out there right now:

1. Real estate loans

Average yield: 6% - 12%

Investing in high-yield, short term real estate loans has the potential to give you some of the highest returns out there — better than bonds, savings, and other equities. Part of the reason is because real estate debt is backed by physical assets. So even in rare cases, when a borrower walks away from a property, the principal (plus, more) can be recouped and distributed to investors with the sale of the property. Plus, the real estate market operates independently from the stock market, so it’s a great diversification asset.

But, anytime you invest, there’s always risk involved. Because real estate debt relies on borrowers to make their payments, some may see this asset class as higher risk than others. While foreclosures can happen, at PeerStreet, it’s rare (of all the loans that paid off since June 30, 2020, 99.6% paid off for a gain). To mitigate the difference, we’ve created a Secondary Marketplace to allow our current investors to sell their positions in certain loans to institutional third-party investors.

2. Real estate investment trusts (REITs)

Average yield: 5% - 8%

Real estate investment trusts, or REITs, are known to be an advantageous investment opportunity. Generally speaking, you can buy interest in publicly-traded REITs just like you would stocks, making them a highly liquid asset since you can sell them off quickly. Because the SEC requires public REITs to pay out 90% of their dividends, they’re also higher-yield investments. 

But because public REITs tend to move in-line with the stock market, they can be volatile assets, limiting the potential to diversify your portfolio. And because only 10% of profits of public REITs is used for growth, share prices may not grow as quickly as other assets. That said, if you want to start investing in real estate, public REITs may be an easy first step.

3. Rental properties

Average yield: 4% - 10%

If you think you’ve got the chops (and money on-hand) to fix-and-flip homes or become a landlord, you can earn solid passive income. Rental properties may increase your net worth over time as the properties you manage appreciate in value. Plus, rents generally adjust to inflation, so you most likely won’t have to worry about diminishing returns and your tenants can pay off your mortgages. 

However, despite high yields, returns on rental properties can fluctuate with the real estate market. Also, they require a certain skill set and are notoriously illiquid. You can combat risk by screening tenants, protecting yourself with rent default insurance, and ensuring you’re an effective property manager. If you have the knowledge, drive, and money, rental properties can be a profitable endeavor.

4. Bonds

Average yield: 0.1% to 3.3%

Bonds are paper assets that represent loans made from investors to borrowers. Investing in corporate and government bonds are typically less volatile investments than stocks and are, therefore, low-risk. Because of this, many people nearing retirement find them to be a reliable investment. That said, they’re also low-return investments and have less growth potential than stocks. Bonds are one of the safest assets you can find when looking to earn monthly returns.

5. Certificates of deposit (CDs)

Average yield: 0.4% - 0.8%

Certificates of deposit (CDs) are traditionally considered very safe investments and can help supplement your monthly returns. While they’re not the option with the highest yields, CDs can earn investors more returns than savings accounts (and they’re FDIC-insured). 

When you invest, you can only withdraw your interest before the CD fully matures if you want to pay a penalty. CDs either give you access to monthly interest payments or let you receive the full return  at the end of the term. Most terms are at least 12 months, so if you want immediate access to cash, this might not be the best option for you.


Building a diversified portfolio is within your reach — and earning passive income is the easiest thing you can do to set yourself up for a comfortable future. At PeerStreet, we’ll give you the ability to generate passive income through monthly recurring payments. So you can take your portfolio to the next level.

PeerStreet is an intuitive technology platform for investing in real estate that provides high-quality real estate investments at your fingertips and makes the market work for you. Try PeerStreet today.

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