Niche sites

There are multiple avenues possible to create passive income online. The last few days I have been reading the smart passive income blog fanatically trying to gather as much knowledge about all of this as I can. Well for now it seems that the first avenue I want to give a shot is the development of niche sites.

What is meant by niche sites is sites that discuss a niche topic and help people find resources online. How can that generate passive income?

The two main ways are:
1. Advertisement
On niche site it is pretty easy to place Google AdSense advertisement which can generate revenue per click.

2. Participating in an affiliate program
This means that you basically, on your site, provide direct links to an online reseller. In exchange for this, the reseller will give you a commission, generally a percentage of any purchase that is made by someone visiting the reseller's through the links you provide.

The trick here is that you have to find a niche that can be profitable, that is not too saturated and that you can provide content about that is relevant enough to make your page come through near the top of the google search results for your niche.

Right now I'm at a point where I have a few ideas for niche sites, but I am still a bit hesitant about spending the initial fee required to get me started. Those fees are pretty small all things considered (web hosting, good web platform... and that's pretty much it!) but I still think I could get a bit more info before getting my feet wet...

But then again, am I just stalling because I am a bit scared to go on that path?