I’ve been blogging since 2009 and investing in real estate since 2003, and I absolutely love both. So, I thought, why not compare the two to see which one is a better investment? They both require different levels of effort, capital, and skills.
In a previous comparison, I looked at stocks versus real estate, and I found that real estate was more my style. I like that it’s tangible, provides income, has utility, and can be improved. Plus, it’s less likely to lose a ton of value overnight like a stock portfolio can.
But what about real estate versus blogging? If you’re looking to build wealth or find new ways to make money from home, this is something to consider. Especially now that we’re all spending more time at home, blogging could be the best work-from-home job there is!
To compare the two, I created a comparison matrix with the following variables: ease to start, ease of maintenance, income upside, profitability, joy, risk, and exit potential. I rated each variable on a scale of 1-10, with 10 being the best.
Starting a real estate investment generally requires a 10% – 20% down payment for a primary home residence. If you’re buying a rental property or multi-unit building, the down payment often rises to 30%. Considering the median home price in America is around $400,000, you’re looking at $40,000 – $120,000 in startup capital, plus ongoing property taxes, maintenance, potential HOA fees, and insurance.
On the other hand, starting an online business like a blog costs just $36 a year for a basic server account with a free domain name for the first year. As your site grows, you can pay for more powerful hosting and hire a webmaster to ensure your site is up as much as possible.
When it comes to maintenance, real estate can be a bit of a headache. Things break, and you need to have a list of reliable repairmen on hand. Blogging also has its maintenance issues, like when a WordPress update causes plugins to stop working, or your site goes down due to high traffic.
In terms of income, real estate provides a steady stream that adjusts with inflation. Blogging, however, can be much more volatile, with monthly revenue fluctuations of up to 30%.
Profitability is where real estate shines. Unless you pay cash for a property, it can take a few years to break even, especially in high-cost areas. But the longer you rent out your property, the larger your operating profit margin becomes. Blogging also has high profit margins, but it requires a significant time investment.
As for joy, I find both real estate and blogging enjoyable for different reasons. Real estate gives me a sense of pride in owning a tangible asset, while blogging provides a sense of perpetual satisfaction.
When it comes to sustainability, real estate wins hands down. Properties can last over 100 years with regular maintenance. Blogs, on the other hand, can come and go.
In terms of risk, blogging has much less risk than real estate. The biggest risk with blogging is your pride, while real estate involves financial risk due to leverage and concentration risk.
Finally, selling a property is relatively easy thanks to technology. Selling a blog is also easy, but the market for selling property is larger.
So, based on my scores, running a 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.
In the end, why not invest in both real estate and websites? The more income streams you create, the safer your financial freedom will be.
