Software Developer Passive Income Streams in 2021

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Looking to develop software developer passive income streams? The demand for software developers grows year after year, and those who are particularly good at the craft will find income to be hardly a problem. 

While opportunities abound and money is generally easier to come by for those who have computer development prowess, generating passive income can be a lot trickier. Those looking for a life free from constricting schedules will pick up a thing or two from this comprehensive guide. 

There are a lot of opportunities in generating passive income for software developers. No matter what language you specialize in or you’re currently learning, there’s always something you can do to generate money on the side – even when you’re not working.

Our list includes a plethora of different side gigs, which includes blogging, and selling assets, chatbots, tools, themes, purchasing an online business, and capitalizing on plugins and software. Before we begin, here’s an important note about generating passive income. 

What you need to know about passive income

Most people think of generating passive income as something that requires little or no effort. While this can be true in some cases, you’ll only be able to make a decent amount of money if you invest. 

When deciding on a passive income strategy, you’ll have to decide if you’re more comfortable investing time, money, or both. There are no ifs or buts – you have to invest if you’re looking to get something out of your endeavor.  

If this looks like something you can do, then continue reading our list of the best software developer passive income streams. 

The 13 best software developer passive income streams

1. Blog

Blog illustration

Remember when you began your career hungry for knowledge? There are millions of aspiring developers just like you, all looking to become even better at their craft. If you have the knowledge to impart, then blogging can be one of the best software developer passive income streams. 

With a minimal effort of one blog post per week, you can offer programming knowledge that aspiring developers will find interesting. The more you set yourself up as an expert in your field, the more visitors you’ll have. 

Select a good host. If you’re just starting out with blogging, I recommend hosting with Bluehost. This web hosting platform integrates well with WordPress, has stellar customer service when you’re troubleshooting, and a host of SEO tools to give your website an edge.

Monetize your blog. Here’s where you’ll start generating money. Once your website is populated with great content, you’ll want to decide on the best monetization strategy. You can run Google Ads and get paid for every click, try affiliate marketing and earn a commission from each product or service your viewers purchase from you, or have your visitors pay a monthly membership fee for exclusive access to your content. 

See Related: How to Quickly Make Money As A Blogger

2. Buy a website, app, or domain

Illustration of a website

Another awesome software developer passive income stream involves buying websites, apps, or domains. Through platforms like Flippa, you can purchase ready-made and running websites or apps and manage them yourself. Once you’ve taken ownership, you can keep the monthly earnings of the website or app you’ve purchased through app purchases or affiliate marketing. 

You can think of buying a website on Flippa as a shortcut to building your own website or app. Since you’re already buying an established website, you can immediately skip to the monetization part. It’s faster and easier, but do take these factors into account:

Work may still be required. Developing cash flow from websites isn’t exactly as passive as opening a bank savings account and seeing your interest grow year after year. Here, you need to do a few hours of heavy lifting, which includes generating new content or improving some of the website’s aspects. 

There are, however some websites and apps you can purchase that require very little owner involvement as they use methods and tools to reduce the workload. 

Evaluate the business model. Some websites are truly passive with completely automated processes, while only requiring you to work a couple of hours a month. Others, however, require more involvement.  Whether a website is passive or not depends on the tools and processes the website is employing. 

Consider automation. Is the process automated? Can they be automated? These questions are essential if you’re looking for a true software developer passive income stream. 

3. Utilize chatbots

Illustration of a chatbot

Chatbots are starting to become an essential part of running an online business. From collecting user information to greeting visitors and offering quick answers to frequently asked questions, chatbots streamline the buyer’s journey while improving sales. 

Software developers can create chatbots in a variety of programming languages while taking advantage of the demand for BAAS (Bots as a Service). You’ll find thousands of companies looking for chatbots to simplify their most demanding tasks in freelance marketplaces like Toptal, SolidGigs, and FlexJobs. Here’s are a couple of ways on how you can generate a software developer passive income stream out of chatbots. 

Develop a chatbot and receive commissions. If you’re looking for a passive way to earn from chatbots, you can give them away for free and earn extra commissions on every client it brings in. If you can negotiate a good margin and your chatbot is particularly efficient, the earning potential is limitless. 

Employ chatbots for affiliate marketing. Chatbots can also be used to earn commissions from affiliate marketing.  Whenever a visitor interacts with a chatbot, it can refer them to affiliate links where the user can purchase. If the visitor buys a service or a product from your affiliate partner, you immediately receive a percentage commission. 

Use chatbots for PPC advertising. If you’re looking to improve your chatbot income, you can consider embedding your chatbox to your landing page and putting ads around it. These ads can be sponsored ads or pay per click Google Ads. You can then earn revenue from the clicks or ad views. 

4. Sell effects, functions, or animations. 

Illustration of programmer writing code

 

If you’ve developed special effects, functions, or animations in the past, they can continue to be useful to others even years after you’ve made them available for purchase. Therefore, selling them can be one of the best software developer passive income streams.  

Sell through a platform. Sell your creations in platforms such as Unity Asset Store, GameDev Market, or the Unreal Engine marketplace. You can also consider selling upgrades to your basic frontend code for a yearly subscription. 

5. Sell web apps

Illustration of web apps

 

Businesses require web applications that boost their productivity, enhance project management, and streamline money management. If you’re looking for a passive income source without having to create new content, you may consider buying and selling web apps. 

Do note that a lot of businesses aren’t confident about what software will best help them. You can step in and suggest features and add-ons for these businesses and earn passive income while doing it. Check out platforms like Flippa where you can find a plethora of web apps to build and sell. 

6. Flip niche sites (but earn from them first) 

Web apps

A great way to generate passive income as a developer is by flipping niche sites. Platforms like Flippa offer access to a vast market of niche sites that are easy to purchase, resell, or improve on. This is a particularly great endeavor if you’ve got chops in content creation, blogging, and search engine optimization. 

You’ll find a vast selection of websites on different topics that you can purchase at an affordable price. If you’ve got more time, you can spruce them up and add some new content just to boost the website’s monthly revenue. You can earn passive income from these websites until you decide to sell them for a higher price. 

Here’s what sets a good website candidate apart from bad ones.

Pay attention to unique content. The website you choose must develop unique content. Platforms like Flippa already offer information about uniqueness on their listing pages, but you can also check for duplicate content through websites like SiteLiner

Select older websites. Websites that are at least one year old have better authority with Google and will be able to rank for keywords faster than new ones. The site’s age is already provided by Flippa if you choose to flip on their platform. 

Evaluate Monetization. If the website of your choice is already being monetized with Google AdSense, you’ll discover that there are a lot more ways to improve on the website’s earnings.  

Check for penalty issues. If the site of your choice has good rankings and organic traffic, there’s a huge chance it’s free of penalty issues, but flippers still need to do their due diligence. Consider asking the seller for Google Search Console access and check for issues under the manual actions section. Sharp traffic drops in Google Analytics may also be a red flag. 

See Related: 10 Easiest Items to Flip for Profit (Including Ways to Resell)

7. Build your own software

Illustration of software

This option should come as no surprise! One of the best ways to generate a software developer passive income stream is by actually building your own software. 

Once you’ve developed your software and settled on a strategy for monetization, you no longer need to put much work into it. This is especially true if the software in question has a single purpose without the need for additional features. Here’s how you can develop a passive income stream by building your own software. 

Make it a personal project. Develop a software people will find useful and consider selling it as a SaaS or by advertising within the platform. As long as the software you’re building eases a consumer’s pain point, there’s a good chance you can earn money from it!  

One of the best things about building your own software is that the creation process is a learning experience. This is a great opportunity to learn a new framework or language you’ve always wanted to master. 

Consider partnering up.  Another way that you can generate a software developer passive income stream from starting your own project is by partnering up with a business owner who has a brilliant idea for an application. While this would most likely lead to you being a freelancer, you can elevate your relationship by actually being business partners. 

Negotiate on a contract that gives you a percentage of the profit or revenue for the product. Additions or updates will most likely be needed for the software you’ll create, which you can outsource to a developer or work on at a reduced hourly rate. 

With a business partner, your hands can be completely free from having to handle the business aspect of selling your software – all you need to do is to wait for your royalty checks. 

See Related: 16 Ways to Get Paid to Code Online

8. Set up eCommerce for clients

Ecommerce illustration

If you’re a software developer, never has there been a better time to dabble in eCommerce. Thousands of businesses around the world are looking to set up their own online outlets, and you can generate a software developer passive income stream by lending your expertise.  

Reach out to these businesses and offer to build their online stores for free. You can walk them through the process of building their site and in return, ask for a small percentage of the revenue. This offer is hard to turn down as it’s low-risk to the business owner – if the shop doesn’t sell well, the business owner is no worse off than before since you offered your services for free. 

9. Sell QA Automation software

Quality assurance

Bugs are the bane of business’ existence. Whether it’s a business tool, an app, or a mobile game, bugs are something all of us hate. Releasing buggy software not only hurts sales but the overall reputation of a business. This is exactly the reason why software companies put great value in automated testing.  

With your software development skills and scripting, you can employ automated testing on any business to check code and functionality, which is much faster than hiring a team of testers.  

To get your first project, consider cold-pitching to companies or joining freelance boards like Upwork, SolidGigs, or FlexJobs. You can turn this endeavor into a passive income source by developing your QA processes for free then charging recurring fees for each use. 

10. Start a YouTube channel

Illustration of YouTube

Got plenty of knowledge to share? Starting a vlog can be one of the best sources of software developer passive income streams. Software developers can share their expertise on video and create a monetized channel through ads or selling products or merchandise. 

While this is an article about generating passive income, I’m going to relegate YouTube vlogging as a pseudo-passive income source, as consistent posting will still be required to keep the money rolling in. In the long run, however, you can get away with posting just one video a week. Here are a few tips to get started.

Choose the right demographic. Understanding what your audience will be like is essential to the success of your monetization. Since each kind of content has its own demographics, targeting your audience with the right type of content is essential. 

Is your audience composed of newbies or are they more experienced? Should your content be geared towards teaching fundamentals, or can you delve into more complex topics? Make sure your content is focused and targeted to build a solid following (go too far off course and you may risk losing subscribers). 

Populate your channel with content. After creating your channel, consider posting a batch of around 10 videos on your first few weeks to give your viewers an idea about what kind of content you publish. Later on, you’ll be able to post fewer and fewer videos every week once you’ve built up your channel. 

Over time, your YouTube channel will have a good collection of videos people can watch and come back to again and again. Once you’re done setting up your channel, you need to select a way to passively monetize it. 

Sign up for the partner program. YouTube requires its vloggers to meet certain goals in their numbers of subscriptions and views before they are allowed to join the partner program and begin earning money. As of 2021, you will need to have at least 1,000 subscribers and around 4,000 hours of watch time within the last year for your channel to be eligible for monetization review.  

Try affiliate marketing.  YouTube is the second-largest search engine after Google, making it a good venue to promote affiliate links and product reviews where your viewers can make a purchase. This is a great source of passive income as your videos are regularly being viewed and your links are constantly shown even when you’re not working on them. 

See Related: 3 YouTube Secrets You’ll Never Hear from the Pros

11. Build an educational course

Illustration of educational course

If you’re an expert in your field, you can consider creating online courses to generate a software developer passive income stream. Creating and selling courses is easy with platforms like Udemy that give you all the tools you need to build your curriculum. To earn passively, you can charge for online courses in several ways. 

Charge a one-off fee. If you create a course in Udemy, you can charge a one-off fee for your entire course. You’ll then make passive income whenever a student signs up for your course. Instructors in Udemy are paid through Payoneer with income sent directly to their local bank. 

Charge subscription fees. If you’re creating an ongoing learning program, you may want to consider charging on a subscription basis. Do note, however, that this method requires some work as you’ll have to create several courses to make consistent income. 

Follow a tiered payment system. If you choose to operate on a subscription model, you can give everyone access to some levels for free and only charge for more premium functions. You can also charge a discount on basic courses while charging more for advanced material. 

12. Create an eBook

Illustration of ebook

Creating and selling eBooks is one of the most popular ways to earn extra money as a  software developer. If you have some knowledge to impart, drafting an eBook and sharing it with others can earn you extra money, but to generate truly passive income, you need to follow a few tips. 

Consider working with affiliates. To generate a software developer passive income stream from eBooks, you need to constantly promote it to keep making sales. To ensure that you get constant exposure, it’s best to utilize platforms like Teachable, FlexOffers, and Send Owl to handle your promotion for you. These companies connect you with influencers and affiliates who will promote your products for a cut of the sale.  

Tap into your leads. If you have your website, then you already know how collecting leads is essential to your business. Consider your new subscribers are fresh opportunities to generate passive income. Platforms like Constant Contact can automatically promote your eBook to everyone who signs up to your website, allowing you to generate passive income. 

13. Make the most of your downtime

Illustration of time and money

Software developers can earn a little extra on the side by incorporating a few activities into their daily lives. Here are some suggestions. 

Install a browser app. Platforms like the Nielsen Computer and Mobile Panel will pay you by just installing their browser app and allowing them to record your online behavior. This is a great way to earn money from something you’re already doing.

Shop through cashback sites. If you’re looking to earn a little extra from your shopping or groceries, consider using platforms like Dosh, Ibotta, Swagbucks, or TopCashBack. These platforms give you back a percentage of the money you spend in shopping through their websites. 

Get paid to play video games. Platforms like Mistplay will pay you for testing out video games and giving your opinions on them. If you’re a gamer, this can be a great way to get paid for something you enjoy doing. 

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