[cheald]

I've done a few passive income projects, and by far the most lucrative have been:

a) Self-serve subscription services (SaaS/hosting platforms have a high buy-in, but are very low maintenance once they're revved)

b) Ad-supported projects targeted at loyal niche markets. (Building enough audience for any ad-supported project is hard enough already; if you can build a tool that hooks into an existing community, go for it!)

[leoedin]

I totally agree with b. I made approximately $2000 from ad supported sites over a 3 year period. The site wasn't particularly unique (a wiki) and I did very little to contribute to it. I was part of a community, noticed a need for somewhere for people to share information about a particular piece of hardware, and introduced the solution at the right time.

I think with most of these things the ability to make money is largely related to timing and luck. If you get a large community behind you, people will promote your site with very little effort on your part.

[cheald]

Absolutely. I did several for World of Warcraft players (~11m people in that market), and each made $150-$1100/month in AdSense revenue for between 6 and 18 months. Each product has died off as it has become obsolete or replaced by something better, but plugging into an existing loyal and social community meant that I just had to give each product a gentle push, and off it went under its own steam.

This does touch on the other edge of the passive income sword, though, which is that passive income projects of this sort tend to not sustain themselves for too long. If it's a good idea, someone will come along and do it better. If it's a bad idea, it'll eventually wither on its own. The passive AdSense project that makes you $40k/month in perpetuity is more or less a myth.