As a blogger since 2009, I love blogging. As a real estate investor since 2003, I also love real estate. Therefore, I thought it would be smart to do a real estate versus blogging showdown! Exactly which is a better investment? They require different amounts of effort, capital, and skills.
In Stocks vs. Real Estate, I compare which asset class is best suited for which type of person. My preference is for real estate due to its tangibility, income, utility, and one's ability to improve the asset class. Your physical real estate portfolio is unlikely to lose a ton of value overnight as with a stock portfolio.
With stocks, you are a minority shareholder with no say in the business and not utility gained. At least with real estate, you are the king or queen of your holdings. You make the decisions and get all the rewards and losses.
But what about real estate versus blogging? If you're looking to build next-level wealth or are searching for new ways to make money from home, then choosing between real estate versus blogging is something to consider. After all, we're all spending more time at home. Blogging could be the best work-from-home job there is!
Making Money In Real Estate Versus Blogging
When trying to compare two things, I find it helpful to create a comparison matrix of different variables. In this real estate versus blogging showdown, I'd like to use the following:
- Ease To Start
- Ease Of Maintenance Income Upside
- Profitability, Sustainability
- Joy
- Risk
- Exit Potential.
The scale is between 1-10 with 10 being the easiest/best/most enjoyable and 1 being the hardest/worst/least enjoyable.
Ease To Start (Blogging/Online business Wins)
For real estate, it generally takes 10% – 20% down to buy a primary home residence. If you are to buy a rental property or multi-unit building, the down payment requirement often rises to 30%.
If we take the median home price in America of ~$420,000, we are talking about $42,000 – $126,000 in startup capital plus ongoing property taxes, maintenance, potential HOA fees, and insurance. The funny thing is, when I first wrote this post in 2016, the median home price in America was only $250,000! Go real estate!
For an online business, it costs $36 a year for a basic server account with a free domain name for the first year. You can use one of the hundreds of free WordPress designs. Or you can spend $50 and get something a little fancier with custom designs.
As your site grows, you can pay for more powerful hosting. You can also hire a webmaster to make sure your site is up as much as possible. After more than 11 years of blogging, I'm now paying $250 for a private dedicated server to host Financial Samurai. I've also got a webmaster on retainer for $50 a month to support my site in case something happens.
Blogging has a low hurdle to get started compared to real estate
Because of lower start-up costs, it's clear many more people can start a website than buy real estate. When starting a blog, there is no need to slave away at work and save every last penny to come up with a large downpayment.
Over my blogging career, I've seen countless blogging buddies – who were making under $50,000 a year at their day jobs – quit their jobs and blog full-time after several years. If you live in a low-cost area, all the more reason to start a blog that has no boundaries.
As for the degree of startup difficulty, I give real estate a score of 3. Coming up with a large enough downpayment is the largest hurdle for real estate investors. Then you've got to buy the right property and maintain it and manage tenants.
Blogging gets a score of 10 because you can create a blog in 30 – 60 minutes or less. Further, you just need to use your own creativity or hire a creative person to come up with a pleasing design and original content.
Ease Of Maintenance (Blogging Wins)
For real estate, something always breaks because nothing physical ever lasts forever. Over the past six months, I've had to replace a microwave oven, fix some loose door handles, replace a window hinge, and repair a broken wood plank. On average, I expect something to be fixed once a year. It's just part of the job of being a landlord.
If you have a list of reliable plumbers, electricians, and handymen to fix things, you're half way there because everything is fixable. It just takes money and time. Other things to account for are natural disasters. Good thing there's homeowners insurance.
For blogging, things break too. Whenever there is a WordPress (blogging platform) update, sometimes the various plug-ins installed may no longer work because they haven't been updated to be compatible with the latest WordPress update. Your shared host might go down because it was overloaded by another site's traffic. Or, a construction worker might accidentally sever a cable, causing your site to go down for hours.
Then, of course, there's the possibility someone might hack your site. If you've ever seen those 404 error messages or down for maintenance pages when you visit a site, it's because something is broken.
Real estate is more hands on and complicated than blogging
With real estate, once you've got your list of go-to repairmen, maintenance is not that big of a headache unless your tenants are difficult. The headache is finding reliable, affordable repairmen.
If you don't have a property manager, then you must take time out of your day to meet the repairman on site. I use the strategy of authorizing my tenants to hire someone from my list to fix what's broken up to $250 ASAP without waiting for my approval. Then, I reimburse them for their out-of-pocket cost.
Regarding fixing websites, I know very little. This is why I've got a brilliant guy on retainer to monitor and fix Financial Samurai. He always knows what to do, and I rest easy knowing my site is in good hands if anything bad happens.
Based on the ongoing cost and peace of mind, with regards to maintenance, I give real estate a 5 and blogging a 9.
Income Upside (Blogging / Online Business Wins)
With real estate, income is stickier. Rent is generally fixed for one year and adjusts to keep up with inflation. Having a reliable source of income is very comforting to many people because it allows you to budget more precisely. Even though rent increases move in a step-up function with limited upside, rent is sticky on the way down too.
Sometimes, real estate investors can get lucky and experience an extraordinary amount of rent growth. This is what has happened since 2020. In general, it's better to hold onto your rental properties in a high inflation environment to be a beneficiary of inflation.
During the past two downturns, I never had to lower my rent once because by the time the lease was up for renewal, the economy was already recovering. The worst case was keeping rents flat for another year. In fact, I've recently been able to generate $1,300 more a month in rent after remodeling a property.
Below is a real estate model I did for one of my rental properties I ultimately sold. It shows how income and equity can grow over time.
Blogging Income Is Much More Volatile
With blogging, income is much more volatile. Despite having grown to over 1 million organic pageviews a month as a fake retiree, there are often 30% month-over-month positive and negative fluctuations in my revenue.
The reasons for revenue volatility are many. They could include changes in click-through rates, search interests, clients shutting down or changing their terms, seasonality, Google algorithmic changes, people copying your content, and my own personal hustle to cement business partnerships.
Further, new exogenous threats like artificial intelligence could take away search traffic and cause more competition.
Every month, it's a little adventure learning how much you made as an entrepreneur. But the correlation is relatively tight with traffic growth.
Given there are over three billion people online versus only one master tenant for your rental property, the income upside from blogging is much greater. Couple this fact with low startup costs, and it's apparent why blogging has become such a popular small business choice for so many people.
Real estate income is steadier than blogging income
For income upside, real estate gets a 7 because it is a very defensive income stream that also has a natural tailwind due to inflation. The stickiness of real estate income is much more comforting for retirees. As a result, I've invested roughly 50% of my net worth in physical real estate and private real estate funds.
That said, the income upside from real estate is much lower. You can't aggressively raise rents every year. Instead, rent generally doesn't catch up with the market the longer your tenant lives at your place.
Blogging gets an 8 because there is much more upside if you can get things right. But, you can also have much larger downswings if things go poorly. Think about real estate as a bond and blogging as a growth stock that also pays a dividend.
Here are more takeaways on investing in private real estate offerings for over the five years. You've got to be purposeful in your real estate investing to maximize returns and minimize losses and taxes.
Profitability (real estate wins for most)
Unless you pay 100% cash for a property, it's hard to immediately turn a profit in some high-cost areas due to mortgage expense, maintenance, property taxes, HOAs, and vacancy.
If you buy properties in more expensive coastal cities like San Francisco, NYC, and LA it often takes 2-3 years to break even after putting down 20% because their cap rates (net rental yields) are so low e.g. 3%-4% vs. 10% in the Midwest.
A longer breakeven point is the reason why I like to buy a property to live in for at least two years first and then rent it out. During the time I'm living in the property, I can improve it, take the mortgage interest deduction, and learn everything there is to know about the neighborhood and property before marketing it as a rental.
Generally, the longer you rent out your property, the larger your operating profit margin. This is because your costs are largely fixed while rent is usually increasing due to inflation. Wait 10 years and you might have a 50% operating profit margin e.g. $2,000 rent, $1,000 all-in costs = $1,000 profits on $2,000 in revenue.
However, from a sale standpoint, due to the sheer price of a home, you will likely make more money selling real estate than selling a blog.
High Profit Margins For Blogging
Compared with almost all other businesses in the world, an online business has huge profit margins. It's why I've written blogging is the best business in the world.
For example, you can run a site for less than $100 a year and make $10,000 a year before tax as a side hobby if you wanted to. That is a 99% operating profit margin ($9,900 / $10,000) if you don't account for your time.
Let's say you decide to create an infoproduct like a book. Once you've spent the time making the book incredibly valuable, thanks to search engines, you can link your book's sales page on your site, kick back, and let the money roll in. If you want to increase your sales, you can write relevant articles about the book, do guest show appearances, and throw in some advertising dollars.
I currently make about $50,000 a year from sales of my severance negotiation book, which was recently updated. I lose about 3% on each sale due to fees paid to Paypal and eJunkie. However, it's been quite a worthwhile passive income stream. I enjoy helping people and continue to receive positive reviews and feedback from readers who have benefited from the book's tips and guidance.
The biggest downside to profitability for blogging is time. I spend 20-25 hours each week writing, responding, prospecting, and optimizing. That's 1,200+ hours a year. However, my income from running a website is much higher. I can even earn brand ambassador income as well.
Real Estate Is Much More Passive Income
Alternatively, I only spend around 12 hours a year on real estate if I don't need to look for tenants and 30 hours a year if I do. Therefore, depending on how much you value your time, real estate can be considered much more profitable.
For profitability, I give real estate a 7 and blogging a 5. It's hard to make a significant income blogging in the beginning, but once you get going, the upside is massive. Therefore, my profitability score is for the majority, not for the top 1% blogger.
One thing that is going in real estate's favor, however, is the rise of private real estate funds. Once I hit my limit of four rental and vacation properties, I started invested in real estate crowdfunding to earn more passive income.
For example, I can now invest in Fundrise, which has multiple real estate funds investing in properties like single-family homes in the Sunbelt. The investments are 100% passive. The investments also diversify away from my expensive San Francisco property holdings.
Another great private real estate investing platform is Crowdstreet. It offers accredited investors individual deals run by sponsors that have been pre-vetted for strong track records. Many of their deals are in 18-hour cities where there is potentially greater upside.
If you are a real estate enthusiast with more time, you can build your own diversified real estate portfolio with CrowdStreet. However, before investing in each deal, make sure to do extensive due diligence on each sponsor. Understanding each sponsor's track record and experience is vital.
I've invested $954,000 in private real estate investments since 2016. So far, it's been a strategically strong decision and 100% passive. As a dad of two young children, time is more valuable than money. To be able to earn 100% passive income is my goal now for the rest of my life.
Joy (Blogging Wins)
Real estate is enjoyable because you feel proud owning a tangible asset. Every time I drive by one of my rental properties, I feel very happy to have scrimped and saved in my early 20s to buy San Francisco real estate in 2003, 2005, 2014, 2019, 2020, and 2023.
Given one of my properties is across from a park, I sometimes pull over on the way home, get out of my car, go sit on a park bench, stare at my condo and reminisce. To own a piece of America is such a wonderful feeling, especially if you're an immigrant.
On the flip side, dealing with HOA members can, at times, get very hellish. The HOA is why I won't be buying condos anymore. It's either a single-family house or owning an entire apartment building from now on.
Further, when a tenant doesn't take care of my property as agreed in the lease, I get bummed out. Overall, I give real estate investing a 8 in terms of joy. It's nice to own a real asset versus just funny money, especially when the stock market melts down. But owning real estate requires constant maintenance, which is not enjoyable at all.
More Satisfying Blogging Than Owning Real Estate
There's a different type of joy when running your own online business. I would describe the feeling more like “perpetual satisfaction.” Every day I wake up feeling like it's Christmas morning because I'm curious to know if anybody shared my post or left an insightful comment.
Nice reviews on my podcast provide a nice boost too. Can you imagine always feeling like a kid the morning before you're about to open presents? Magnificent!
It's incredibly satisfying to put your thoughts into words and see an article make its way through the internet. You get a nice feeling of accomplishment when you create your own product that never existed before.
Publishing my new WSJ bestselling book, Buy This, Not That, has given me a tremendous amount of satisfaction. Given it took over two years to write and edit, it might provide the same joy as delivering a baby. But of course, I don't know for sure!
I did beam with pride when it became an instant bestseller though. And I know being able to release a book with Penguin Random House wouldn't have been possible without blogging. So I'm very grateful for that.
Blogging Provides Perpetual Satisfaction
The law of attraction dictates you will find your tribe of people who share your same interests. That's the magic of blogging. Of course, you will also attract your haters as well. But that only means you're doing something meaningful.
It is this perpetual satisfaction from blogging that enabled me to feel 50% happier, despite making 80% less for the first two years after leaving my job. The loss of income was more than filled up with a sense of joy and purpose from writing online.
In terms of joy, I give running a blog or web business a 9. Blogging is not a 10 because there will be the inevitable server crash or extremely rude commenter or client. The larger your site grows, the more positivity and negativity it will attract. Hence, you have to grow a thick skin.
Key realization: The reason why both real estate and blogging score relatively high in Joy is because both are entrepreneurial endeavors. You are the CEO of your business and property. And being your own boss feels so much better than having to report to someone!
Sustainability (Real Estate Wins)
An online business / blogging can come and go. In comparison, real estate is highly sustainable. All you've got to do is keep up with the regular maintenance and your property can last over 100 years. There are wonderful Victorians and Edwardians here in San Francisco from 1880 – 1920 that are in great shape.
Unfortunately, exterior paint jobs can cost $10,000 – $50,000. Changing the electrical system from knob and tube can run $20,000 – $50,000. And building or remodeling a master bathroom can easily cost $50,000 – $100,000.
If you want to do the bare minimum, real estate doesn't cost that much to maintain compared to the income it can generate. Changing the carpets on a 1,000 sqft place should cost no more than $2,000 every 10 years.
Appliances last 20+ years. Interior painting can be done once every 5 – 10 years for $2,500. If you want, you can leave your property empty and it will sustain itself just fine. However, something always comes up with real estate, so mentally prepare. Given these reasons, I give real estate a 9 for sustainability.
Businesses easier than real estate
They say that most businesses don't last beyond the five-year mark. I believe it. The biggest reason for blogging failure is lack of effort. Too many folks quit before the going gets good. Therefore, you've got to really love the topics you are writing about. Otherwise, you have a higher chance of burning out.
Given margins are so high with an online business, the only reason why your site would fail is if you give up producing content or releasing new products. Of course, you could simply have dull content or a bad product. But very few people are ignorant enough not to learn from their mistakes and improve.
What I do love about owning a lifestyle business is that it is one of the top financial moves that eases anxiety. If you have a day job, a side business generates extra income. If you have children, a family business can provide career insurance for your children.
I give blogging a sustainability rating of 7. Blogging should be easy to sustain, but after more than 13 years blogging, I've seen many disappear. Whereas, owning real estate for 13+ years is quite common.
Risk (Blogging has much less risk)
No risk, no reward as they say. Due to leverage in real estate, you can either make $5 for every dollar your asset goes up with a 20% down payment, or you can lose 100% of your down payment if your property declines by 20%.
Due to the long-term trend of real estate moving up and to the right, the risk of owning real estate declines over time. You just don't want to over lever at the top of the market and be forced to sell at the bottom. Hopefully more people will follow my 30/30/3 home buying rule.
There's also concentration risk when buying real estate. The median American has ~80% of his/her net worth tied into real estate. This is why investing in publicly-traded REITs and real estate crowdsourcing companies that allow for smaller, more surgical real estate investments around the country are good solutions.
Due to leverage and concentration risk, I give real estate a 6. If I knew everybody would hold onto their property for 20+ years, then I'd give real estate an 8 or a 9. But a lot of people lose their minds and buy too much property at the wrong point in the cycle because they can't control their real estate FOMO.
Blogging is a low-risk endeavor
The biggest risk you have when blogging is your pride. You're either going to write something that resonates with someone or you're going to hear crickets. When you hear too many crickets, it's easy to feel hurt and give up. Don't. If you're someone who is not a self-starter and doesn't have thick skin, blogging can crunch your ego.
Given blogging costs less than $100 a year to run a basic site, there's very little financial risk. If nobody visits your site your life will be fine. Since you've probably already paid for hosting for the year, you can just leave your site up and do nothing rather than take it down.
With blogging, there won't be a need to do a short sale or a foreclosure. For these reasons, I give blogging a 9 in terms of risk (hardly any risk).
Even if you get no readers, you'll learn a tremendous amount of new skills in writing, marketing, SEO, social media, advertising negotiations, HTML, and more. The only risk with blogging is really your time and a hurt ego.
Here are my reflections of making money blogging since 2009. I can't believe it's been over 14 years already!
Exit Potential (Real Estate Wins)
Selling a property is relatively easy nowadays thanks to technology. Selling a blog is also easy due to website marketplaces and brokerages that help facilitate blog transactions.
People have been property owners since the founding of our great nation on July 4, 1776. There are more homeowners than bloggers. Therefore, the market to sell property is larger. However, property usually faces a local demand curve, unless you own in an international city like NYC or SF. Blogging, on the other hand, faces a global demand curve. Anybody can buy and operate a blog from anywhere.
The price you can get for a property depends on where your property is. In places such as Manhattan and San Francisco, you can sell your property for 30X estimated annual rent e.g. a rental property that can command $100,000 a year in rent can sell for $3 million. If your property is in the Midwest, you might only be able to sell for 6-10X annual rent. Real estate opportunity in the heartland is why I've been investing there for years.
Blogs can be sold for millions too
If you have a blog that is generating a tremendous amount of cash, don't sell it! The value of any cash-flowing asset is high. If you sell, I think you will regret your decision forever.
It is much easier to sell real estate for top dollar. Real estate valuations are also much higher than blog valuations. As a result, I give real estate a 9 and blogging a 6. I would give real estate a 10, but the average 5% selling commission that still exists is a bummer for sellers.
Why Not Invest In Both Real Estate And Websites?
Based on my scores, running your own web business or blog is more profitable and more enjoyable than being a real estate investor. However, for long term sustainability, owning real estate will likely keep you rich for longer.
Before starting Financial Samurai, real estate was absolutely my favorite asset class to build wealth. But as I get older and hopefully wiser, I find I have less patience dealing with people who do not follow the lease. I like the asset-light model of running an online business.
You'd think I'd also enjoy investing in stocks more, but it's a distant third. The main reason is that I have no control over a stock's performance. Even riding Apple or Tesla to all-time highs provides less joy when compared to blogging or owning real estate. Now stocks have crashed. And when you can't even enjoy your stocks, what's the point?
Blogging Plus Real Estate Is A Powerful Wealth Combination
With blogging, I know that if I spend more hours a week writing and marketing, traffic and revenue will most likely increase. Blogging is the ultimate side hustle for those of you who are gainfully employed.
With real estate, I've got the ability to expand a property, find better tenants, refinance my mortgage, and remodel for more passive income. The correlation with effort and performance is one of the best feelings.
I know we all like to romanticize making lots of money passively. I certainly do. However, it feels very rewarding making active income from blogging and real estate as well. So much of the joy comes from creation. Creation from writing is obvious. But creating new space after a remodel from an architectural drawing is also very satisfying.
If you can, I would try blogging and investing in real estate. Who knows, you might be able to meld the two together like I have. The more income streams you create, the safer your financial freedom will be.
Related Post: How To Start A Profitable Blog Today
Real Estate Recommendations
If you don't have the downpayment to buy a property, don't want to deal with the hassle of managing real estate, or don't want to tie up your liquidity in physical real estate, take a look at Fundrise, my favorite private real estate platform today. You can get started with as little as $10.
Also consider Crowdstreet if you are an accredited investor looking for individual deals.
Both platforms are sponsors of Financial Samurai and Financial Samurai is a six-figure investor in Fundrise funds.
The longer I blog, the more I believe that blogging is a superior asset class to real estate. Once you build momentum, cash flow really ramps up. For example, I sold a home in 2017 for 7-figures that was generating roughly $6,000 a month after all expenses. With blogging, I can regularly make more and have no capital risk.
I think the two things are separate. Real estate takes money and blogging takes time. I started an Internet business 19 years ago with no money and now buy real estate.
I think the most successful bloggers would do it for free because they truly enjoy it. It takes awhile for success and it’s challenging to write regularly. I enjoy programming and would do it for free. That’s why the opportunities on the Internet are great. Worst case is that you don’t like it and it cost about $100 to set up.
I also love real estate but took awhile to start because of the initial risks. I thought it would be full of hassles. I own warehouses with good tenants though so the businesses take care of most of the maintenance.
Well said. I think both are good but they both require different skill sets. I much prefer blogging, but it takes awhile to get into if you are completely new.
Hi Sam – do you have any advice/recommendations for someone looking to purchase an already established content site?
I have seen Flippa but just have a hard time trusting these traffic numbers etc!
Would love it if you have any experience or can comment at all on things to look out for if wanting to purchase a blog.
Thanks!
Try getting added to their analytics. Also check page authority on sites like ahrefs. Check Similarweb. Use the Wayback Machine to see what the site looked like over time. Also do some google searches to see what they rank for.
The benefit of buying an established site is that you’ll start ranking in google immediately. Most sites on Flippa are not great but they do have a few diamonds. Especially if you can take an existing site, optimize it, and add content.
Yes diversify! Do both!
Truly elaborated! Both the side have their own pros and cons! Thanks Sam for the insightful comparison.
The final heading put a smile on my lips…
While reading the post the same thought kept coming to my mind: Why not do both?
I’m glad you feel the same way. I’ve noticed that as bloggers we often compare multiple options and ignore that one does not exclude the other.
Now that I’m aware of it, I try to stop myself from falling into this trap.
Sometimes I still catch myself comparing two options where quite frankly, both are great choices.
Interesting comparison and great read! Although there are two points I personally think are very important but didn’t get as much of a emphasis in your comparison.
1. Time value. Time is the one thing I cannot pay any amount to get, so even though the price tag is 0 dollars, its the most valuable commodity. As you mentioned, you spend 1/100 of time on managing real estate per year vs. managing a blog business. I will take that 99/100 of free time any day over any amount of profit from a business that requires active managing — it is currently impossible for me to fork over any additional bandwidth to actively managing anything outside my daily work/family responsibility/existing investment regime/fun activities/future planning.
2. Another aspect overlooked seems to be the predictability. It is important to have predictability in one’s income. Rental real estate provides that; blog business has some but as you said, with more fluctuations. Other common investment regimes, such as stock etc., fall far behind for me personally. There is a lot of merit in knowing for sure the income and how much is coming for a fixed amount of time (ie. length of signed lease). This is really the only effective way to budget and plan for future.
As a person with type A personality, the structure and predictability help me feel in control and the peace of mind comes with that feeling is priceless.
:) Just my $0.02.
I’ll address point 1 with this post, Active Income Is So Much More Rewarding Than Passive Income!
For point 2, I can add some of the income stability thoughts in the Sustainability or Income Upside sections. Rental income is like working a government job. It’s steady, but very uninspiring each year. Blogging / web entrepreneur has more volatility, but it is inspiring every single day because there’s a STRONG correlation with effort and reward. That’s the most alluring thing anybody can ever ask for.
Agreed, Sam!
You cannot quantify the pleasure and the potential derived from an online, recurring income!
I like yourself do both, and this seems a good option. Make volitile cash online and put it into stable long-term assets (such as property).
I agree with your points viewing online business as more risky but a lower entry cost. I do find online business takes more upkeep in the long-term.
Here in the UK we are facing a massive backlash against property investor’s, being at the end of a bear market a lot of people see property as unaffordable and look to point the finger at the easiest target.
This has led to a whole bunch of new law’s being passed (such as extra tax to pay on purchase and lack of using mortgage interest as an expense against your property income) this only seems to have fanned the fire even more so I’ve learnt to never read (in fact I don’t even visit these sites anymore) online articles mentioning property where huge amounts of name calling takes place in the comments.
I wonder when the next crash comes and investors and the only people offering to purchase houses (and thus pick the market back up) if the public opinion will change?
Anyway, keep up the great work – fantastic balanced article.
Sam
P.S.
You were the inspiration behind starting my own personal finance blog (aimed at 20-30yr olds in the UK).
Hi Sam,
Nice to hear from you and great job starting your own site in the UK! I’m only aware of a couple UK PF blogs, and have wondered why there aren’t more. Or maybe I’m just not plugged in. Monevator is a nice one I’ve followed for 7 years.
End of a bear market, or end of a bull market? Seems like we are coming to an end of a bull market after Brexit no?
This is the problem w/ real estate. The government and the people can raise taxes at any time. But, all this will do is RAISE rents as landlords collectively pass these taxes on. In other words, voters are just hurting themselves.
Who knows when asset prices will become dirt cheap again. I hope they won’t, but I do forecast a ~10% correction into 20018 in the coastal cities of the US.
Cheers
I like your parting words, “My advice is to build your brand online, get neutral inflation by at least owning your primary residence, grow your dividend paying stock portfolio, and work a day job until you can’t take it anymore.”
Very well said.
I’m proud to say that’s pretty much exactly what I’m doing, and it seems to be working.
Nice comparison of pros and cons. Blogging and rental properties are my 2 main interests right now, so this article was very timely. Interesting point about selling your website you’re right that market just isn’t very developed. I tried to search about it recently and most of the websites I found were pretty shady and shoddy. Hopefully some silicon valley company will decide to make the process easy and fair.
Sam, the rating scale for rental property to a large extent depends on if the tenant gives you any headaches or not. Also with professional tenants squatting in a property it could take a lot of time, stress and money to evict. Which services have you used for screening a tenant?
Hi Sam!
Great post again! I actually wrote an article about this post on my blog because I liked it so much!
I am very interested in investing in real estate, as I have read all your posts about it and am intrigued by it. However, since I am only 18, I don’t have the capital to even start up a RealityShares account. Any other ideas on how I can diversify some of my investments into the housing markets?
Tj
Real estate is more my style personally. I read all your articles on blogging and think the idea sounds great but I can’t think of anything to write about. Coming up with something to write every week or a few times a week sounds like an impossible task. I have always hated writing. Any time I have to write a paper for a class I am so unhappy until it is over with.
Extremely interesting post – and very timely. We just made the decision to have Mr. Smith decrease his work hours, so he can put in some work remodeling our rental property. At the same time, I will be trying to spend more time on my blog and with freelance assignments to cover his lower income. This revision to our plans will decrease our debt payoff rate, but I believe that the returns on these “investments” will be worth it in the long run.
Of course, as you suggest, I also plan on staying with my day job for the time being.
Hi Harmony, sounds like a great adventure! Having more time to work on real estate and spend more time on your site and freelancing assignments WILL pay dividends because there is a correlation with effort and performance with these two asset classes.
The same cannot be said for investing in the stock market or other passive investments. My biggest fear when leaving corporate America in 2012 was that there would be no correlation with effort and performance. But after almost five years of independent hustling, I know that things get better the more we work at them!
This is an excellent comparison. I’m going to do both. I’m sorry that I did not start earlier with both of them. In my twenties investing in real estate was seen as my route to living in my own home. But now my thoughts have shifted to viewing real estate as a way to create an income in my future. I started blogging a few years ago and then stopped – I was studying and could not dedicate as much time as I wanted to. But now…. I realised that I should have had better time management skills.
Great post! I love the level of detail you’re able to dive into with these types of A vs B analysis. I agree with this type of activity, there is room to make it an AND instead of an OR.
I don’t have experience with rentals, but I grew up with two parents who are real estate brokers. I suppose I’m still a bit skeptical on how great a deal it is now compared to “how obvious of a bubble” it was before. I understand people will need to rent forever and to do our homework – but I’m also aware we are subject to cognitive biases much more powerful than we can fully account for. No one buys a property with the intention of being burned down the road.
Then again, you’re right, even with a large market downturn, the only people who really get burned are those who are overly leveraged. It is the whole, “Don’t bite off more than you can chew.”
Blogging FTW! I do want to get into Real Estate sometime down the road (I think in the next 5 years, I will have a mortgage under my name, scary to think!) but I love blogging so much. I would give joy a 10 instead of 9. There’s only a few instances where I wish that I would have started earlier, and blogging is definitely one of them. My growth has accelerated 10x and the people that I’ve met – priceless! Here’s to 100 more years of blogging, Sam!
This is a fascinating analysis. Based on knowledge I gained from reading your site, I have a site and it has earned $9.20 via ads and $0.11 via Amazon. My site is less than six months old. I spent the $100 get yourself started for a year kit and nothing else but time and effort. I have not yet been able to use the knowledge I’ve gained from reading you to purchase real estate, but I anticipate I will make similar good decisions when the time comes around. My current plans do not include real estate as an asset class, but an inflation hedge for me to live in.
I am still surprised at the level of joy that blogging brings me. Creating something and sharing your knowledge with others is heady stuff.
Sam – I have what I am sure is an elementary question, but one that is nonetheless not clear to me. I understand the concept of CPC’s and RPM’s, and that revenues from these are driven by clicks and/or traffic. What is not clear to me is how these get on your blog in the first place? Put more simply, do you solicit the advertisers, or do they come to you requesting to be on your site?
Thanks.
Good analysis. Online business in definitely something almost anybody can start, even if he/she doesn’t have technical skills, whereas real estate is for “selected few.”
As someone who had online business many years ago and got an offer to sell it for amount of money I could buy real estate, I understand that making money online is very much possible. Too many people just give up until payday.
This is a comparison I’ve never heard made before, but for me, the answer is blogging. Hands down, it’s blogging. The idea of a revenue stream where you don’t have to deal with people, don’t have to do property maintenance, has almost no startup costs, AND you can write about the things that are interesting to you? Hell yeah!
It’s all about making it work. It’s like that for ANY business, but paying less than $100 for a venting platform with unlimited upside is much more preferable to me than paying hundreds of thousands of dollars to deal with other people.
That said, I do like the idea of living in a multi-unit property and renting out the rest of the units. By moving the rent towards your mortgage, it’s like creating your own affordable housing program!
Too bad property is so expensive in my area. I’ll need an FHA loan just to have a chance at that down payment.
Sincerely,
ARB–Angry Retail Banker
Hi Sam. Thanks for posting such interesting content. I really enjoy visiting your site. In your post you touched on/compared “capital” risk, but what are your feelings with regard to investments and “litigation risk” (and how that might affect the “joy” of participation among various assets)? Obviously, you have a written disclaimer at the bottom of your blog informing readers that your blog does not constitute any investment advice. However, with RE (and all of the appropriate insurance policies and proper protective “incorporations”)… as one’s RE empire grows and (hence) exposure to many different individual renters expands (regardless of thorough vetting)…. Over a many decades long holding period and many dozens of renters, Do you have any guesstimate or feel for the likelihood/probability of facing litigation hassles with regard to tenants (or THEIR guests) injuring themselves or dying or having any other reasons to bring suit (through no fault or negligence of your own)? And does this factor into the analysis process? As a shareholder of publicly traded companies, individual litigation risk is virtually non-existent (I believe?). The army of corporate attorneys will do battle for the corporation. However for a “smaller” RE investor (even if held in a “protective entity”) will you not still have to possibly be deposed or inconvenienced by the litigation process? I would love to hear your thoughts on the matter. Thanks again!
Jim
I think “risk” and “ease to start” are too much correlated and should be grouped together.
Plus: before selling to the world this “you should own a website” thing, I guess a deeper research on the likelihood of success should be presented. My gut guess is that 99.9% of the blogs on the web die before becoming profitable. Reaching the break even (being able to earn enough to repay the hosting) seems so easy, few dollars per month, but my guess is that the vast majority of those who try can’t make it.
Anyway, great article! thanks for sharing your thoughts!
Bummer, you and OB @ Out of State Investor need to have a debate on the need for Risk category as he asked to put it up!
No guessing allowed on statistics. Give it three years and come back to me on how blogging and RE investing compares so you can see for yourself!
Related: Stop Self-Sabotaging: You Are Your Worst Enemy
I’m doing both, but the jury is still out for me! Once I’m pulling in a decent stream of income on the blog, it’ll be fun to compare the time spent vs. reward against RE investing.
All I know is I’ve spent a ton of time in both. :)
I’m glad to see your breakdown! Congrats on your continued success. Thanks for sharing.
Thanks. Give it three years online and you will see the difference!
I am happily active in both. They’re totally different from one another which is part of why I enjoy both I suppose. It’s nice to own something tangible and also invest time in something that’s intellectually stimulating. I never would have thought I’d become a blogger or a property owner when I was growing up but I’m glad I did! Great in-depth analysis in your post!!