Real Estate Versus Blogging: Which Is A Better Investment?

Real Estate Versus Blogging Financial Samurai

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 ~$400,000, we are talking about $40,000 – $120,000 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.

Rising Rents pushed by rising 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.

Rental income is very sticky, even during downturns.
Rental income is very sticky, even during downturns.

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.

Blogging For A Living Income Example: $300,000+
Blogging income statement

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.

How To Engineer Your Layoff Ebook New Edition
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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 real estate funds investing in single-family properties 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. Crowdstreet 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 want to get more surgical in your private real estate investments, Crowdstreet is a strong solution. I've met the people at Crowdstreet on two separate occasions and came away impressed with their risk-management and product offerings.

As a result, 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, and 2020.

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.

Buy This Not That Book Reviews

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!

Wealth breakdown including business equity
The wealthy own businesses. The non-wealthy have most of their wealth tied up in a primary residence.

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.

Real Estate Versus Blogging Comparison Chart For Profitability And Joy

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.

Fundrise manages over $3.5 billion in assets and has over 500,000 investors across its many private funds. Fundrise predominantly invests in residential real estate in the Sunbelt, where valuations are lower and rental yields are higher.

Also consider Crowdstreet. Crowdstreet 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 want to get more surgical in your private real estate investments, Crowdstreet is a strong solution. I've met the people at Crowdstreet on two separate occasions and came away impressed with their risk-management and product offerings.

Fundrise is a long-time sponsor of FS and FS is an investor in Fundrise funds. Since 2016, I've invested $954,000 in various private real estate funds and individual deals.

Fundrise returns

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 probably make $6,000 more a month regularly within a year and have no capital risk.

97 thoughts on “Real Estate Versus Blogging: Which Is A Better Investment?”

  1. 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.

  2. 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.

  3. 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!

    1. 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.

  4. Paul Walker

    Truly elaborated! Both the side have their own pros and cons! Thanks Sam for the insightful comparison.

  5. 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.

  6. 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.

    1. 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.

      1. ExpertBoomer

        Agreed, Sam!

        You cannot quantify the pleasure and the potential derived from an online, recurring income!

  7. 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).

    1. 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

  8. Fiscally Free

    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.

  9. 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.

  10. 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?

  11. 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

  12. 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.

  13. 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.

    1. 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!

  14. 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.

  15. Matt @ Distilled Dollar

    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.”

  16. Finance Solver

    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!

  17. 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.

  18. 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.

  19. 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.

  20. 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

  21. 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

  22. 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!

  23. 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.

  24. 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!!

  25. Sam, I’d be very curious as to how you market the 1 on 1 financial consultations. I’m doing $100 student loan consultations with people, but only because I’m convinced it doesn’t fall into the financial advisors regulations with FINRA and the SEC as I’m not giving advice on an investment product. Anything involving financial planning might possibly fall under these regulations, requiring burdensome state registration fees, licensing fees, errors and omissions insurance, and more.

    If you’ve found a way to limit the scope of the consults and also have no regulatory scope over you that’d be awesome to hear about. I know there’s an exemption for financial educators but idk how far that goes.

    And if you penalize blogging for time, it’s a horrible financial investment, but a thrilling life investment. I’m definitely much happier in my career since starting Millennial Moola, even though I’ve barely made $1000 doing it in my first year

    1. I actually don’t market my one on one consulting services mostly because I don’t have capacity. Based on my experience marketing anything, there will be too much for me to handle. The most I want to spend A week consulting is one or two sessions.

      As for who you are allowed to speak to, if you are afraid of speaking to people where you have expertise then the best recommendation I can give you is to talk to a lawyer. Perhaps freedom of speech is not 100% allowed in America. But I’m not sure, so best to talk to a First Amendment lawyer. Let me know what she or he says!

  26. Middle Class Millionaire

    This is a great comparison. I agree that why not do both? Both can get you away from your 9-5 if you keep at them. If you enjoy real estate investing, and if you run a blog on something you are very interested in, then you aren’t really working :)

  27. Aliyyah @RichAndHappyBlog

    What a well-thought out comparison. I personally would rather invest in building an online business through blogging than a business through real estate. I do find home ownership and value appreciation attractive. I just think, as you mentioned, blogging can be more enjoyable in the long-term.

  28. Sam, so many people don’t understand the simplicity of blogging and the huge profit potential. My wife didn’t. Two years ago she was trapped in a lucrative sales job. She got into sales right out of college because she “wanted to make a lot of money”. It worked. She managed to save enough for our down payment on our current house. But she was absolutely miserable two years ago and couldn’t take it any longer.

    I’d recently learned A LOT about content marketing, having built our company’s blog from nothing to 500k uniques in 18 months (now 1MM+ uniques/month). I came home one day, told her to quit her job and start a blog. She thought I was nuts, but I showed her bloggers online making great money. She started a crafting blog and an Etsy shop. The blog took time to ramp, but now makes some decent side hustle money. Her Etsy shop did quite well and she pulled in something like $72k the last 12 months.

    She no longer does the Etsy shop and has limited time to blog because she’s a full-time mom now (her absolute dream job), which was our plan the entire time… keep her sane until we were ready to start a family.

    The problem for most people is they have no clue that blogging is even a viable alternative to the 9-5 grind. Even if/when my wife understood it, she had no clue how to get started and would have made tons of mistakes had I not been able to teach her all the best practices we’d figured out at my company.

    I know there are ebooks out there now that teach folks how to blog, so that part isn’t as bad as some commenters are alluding to here. But awareness is a huge issue in my opinion.

    1. Great example of starting a craft blog and selling things on Etsy! She went from disbeliever to believer because she TRIED. So many people don’t try. They let their disbelieve prevent them from even starting. What a shame.

      I was never an arts and writing type of person. I was more of a sports + science + finance type of guy. So my entire family is surprised I went this route and so am I! As boys, we are taught to play sports and do more “male oriented” things b/c this is what society says.

      I say try more things. You just never know what might happen. The repercussions for failure are now so financially small it would be a shame not to try.

  29. There are a lot more successful real estate investors than successful bloggers. That to me makes real estate the much easier way to make money.

    You can also lose a lot more in real estate than in blogging. But real estate does not take nearly as much talent and devotion, as blogging does. You can set up a real estate investment portfolio, hire property managers, and then treat real estate as passive income. I am not sure you could setup a blogging site, outsource all the writing, and see the same level of success.

    1. I think that’s simply because real estate investing has been around since our country was founded several hundred years ago, whereas the world wide web began in 1991, a mere 25 years ago. Despite massive internet penetration and various social media sites all under 15 years old, people have yet to realize they can create their own sites easily.

      But that’s changing more and more now that sites like WordPress make creating your website so easy. And self-hosting prices have drastically declined as well. The capital required to start real estate investing is so much greater than the capital needed to start a site. As a result, many more people have the potential to create passive income through blogging if they just tried.

      Related: Adopt An Abundance Mentality To Build Wealth

  30. Graham @ Reverse The Crush

    Another great post Sam!
    I love your advice at the end of the article about focussing on building a brand online and a dividend portfolio. Such great long term income stream advice.

    I thought the comparison between real estate and blogging was extremely interesting. I was excited to read the article as soon as I saw the title. And although I have no experience with real estate investing myself, I was happy to see an astute investor such as yourself willing to compare the two asset classes.

    I’d give blogging a 9 because it’s something I already love to do and plan to continue for as long as possible. I’d give real estate a 5 because I have no current experience, but it has the potential to be an area of interest down the road.

    I think your comparison sounds logical and agree with it. However, I don’t think blogging is for everyone. It takes too much patience and learning in the first few years for some. But in theory, I’m totally with you. I think everyone should have a blog.

    Thanks for sharing. Fantastic post!

  31. Hi Sam,

    I disagree with your comparisons. Our country just went through one of the worst real estate melt downs in history. However, my guess is only about 10 percent of real estate holders were negatively affected. The majority of people were able to hold on till prices recovered. They also had the added benefit of living in their property or collecting rent while the recovery occurred.

    Compare that success rate to blogging. I have no way of knowing the success rate in blogging but my guess is that it is extremely low. Most likely low single digits. The problem with blogging is that the majority of blogs are not very interesting. Sure anyone can start one, but are they putting out interesting original content? In my opinion no they are not.

    I think your selling your blogging abilities short. Your blog is very original, your content is interesting, your writing style is easy to understand without being remedial, and you have the credibility of successfully working in finance. Very few people poses all those abilities.

    It just took me 30 minutes to try and express my feelings in this comment which probably could be summed up in a sentence or two. I, like the majority of people probably would be better served if I took that time and studied a 10k, or went to a open house or worked at my day job.

    Thanks, Bill

    1. Hi Bill,

      You’re free to disagree with my comparison, but I’ve enjoyed writing about the comparison anyway b/c I always thought real estate was my favorite asset class UNTIL I started writing online. Then I’ve come to fully realize that after seven years of running FS, that online income upside far surpasses the income upside of real estate investing.

      Just remember to always compare “success” with “startup capital.” With practically zero startup capital, you don’t need to be a huge success running a site. I have another site that generates a respectable $800 – $1,200 a month where I now write a post once every two months on average. The site costs about $500 a year to run. It should be less, but I put it on its own server b/c it is a custom built site w/ lots of issues.

      I think you give me too much credit as well. But thank you all the same. There are plenty of people out there who are doing way better than I am. There are more successful real estate investors because RE has been around since our country was founded several hundred years ago, whereas the world wide web began in 1991, a mere 25 years ago. Despite massive internet penetration and various social media sites all under 15 years old, people have yet to realize they can create their own sites easily.

      But that’s changing more and more now that sites like WordPress make creating your website so easy. And self-hosting prices have drastically declined as well. The capital required to start real estate investing is so much greater than the capital needed to start a site. As a result, many more people have the potential to create passive income through blogging if they just tried.

      Things are changing, but it will just take time.

  32. Interesting comparison, Sam!

    What’s your view on differentiation/edge? How much have you found it necessary to have an edge in your real estate deals versus having an edge for your blog content? In the classic RE reads, author talk all the time about finding motivated buyers, negotiating the best deal, etc. And with blogs, it seems pretty clear one needs to hone a unique perspective to attract visitors. Which one have you found to be harder/take more time?

    I plan to pursue both as you mention, but curious how you’d stack them.

    1. You must have an edge in everything you do, otherwise, you might be sent to the slaughterhouse if lots of parties are involved (realtor, gov’t, seller, lawyer, other middlemen). Edge comes w/ knowledge and a willingness to keep on learning.

      I’ve found finding an edge in real estate investing to be harder b/c the market is much larger and more efficient. Everybody is looking at the same deals you are looking at. But I do have an edge in real estate due to this site.

      For example, I hunted aggressively for my panoramic ocean view property in San Francisco after deciding not to buy in SF. Once I found and bought my fixer, I then wrote about Golden Gate Heights and the best area to buy property in San Francisco. Now, plenty of readers have read the post and plenty more prospective buyers have as well. I’ve essentially put GGH on the map and strangers have told me about my post. (https://www.financialsamurai.com/the-best-area-to-buy-property-in-san-francisco-or-any-major-city-today/)

      If you Google “The Best Place To Buy Property In San Francisco,” my post comes up. So now, folks want to know where else I will be buying, or what I think about SF real estate before I post something. That’s pretty powerful and can positively affect perception and value. But, you can’t do that if you don’t have a strong track record or brand.

      W/ blogging, finding an edge is much easier. Write something unique that few others are writing about and repeat. What other post on the web compares Real Estate Investing and Blogging? I can’t imagine there are many, and if there are, I don’t think it will be as thorough as this 3,200 word post with proprietary charts.

  33. Permian Buyer

    Interesting read. How big of a readership do you feel like you need for a blog before you should spend time looking for corporate sponsors?

  34. One factor that I think makes blogging less of an option for the vast majority of people is that most can’t write or don’t like to write or don’t have the discipline to write on an ongoing basis. Sam, while it fits you perfectly because you like to write and do all the detail analysis I’d imaging that it would not fit most people. In this case I think real estate investing is the more feasible option for most despite all the great reasons to set up your own blog.

    1. I don’t know about most people not being able to write. We’ve all taken writing in English class in high school and we all know how to speak so why can’t we write as well?

      More than 30% of us have gone to college, which requires more writing. And then large majority of us enter the workforce which requires even more writing. Therefore, I truly believe anybody can start a blog, even someone like me who has a poor grasp on the English language having grown up overseas for the first 13 years of my life.

  35. Great comparison Sam! Though I think I’d also add risk as another variable to compare between real estate and blogging. When you also consider risk, I think it further tips the scale towards an online blogging business.

    I fully agree with you that people should do both real estate and blogging. In fact, I actually do both too! I view these as mutually exclusive businesses. I see real estate is as a means to preserve my wealth (from my day job, any other side hustle income earned, or blogging income) and incrementally grow it over a long period of time. Whereas with blogging, the costs are minimal to start up but takes incredibly more time that I view it more of as a job.

  36. Very timely article as I launched my blog this week. A question, has there been any studies on the typical trajectory of a blog towards your 300k views a month concept. I see your ease of start talking about money, but I’m curious about the difficulty from drumming up the initial set of users and driving the marketing. Finding the affinity marketing opportunity and similar opportunities later on also is something I don’t hear mentioned often in terms of difficulty and approaches. I’m not necessarily targeting income from my blog, but I do find these things interesting.

  37. Jack Catchem

    “You are the king of your castle and CEO of your business. Being your own boss feels so much better than having to report to someone!”

    The independence and control of both asset classes appeals greatly to me. I still remember a scientific study back in college on the experience of stress on low level employees and the C suite. The lower levels reported lower levels of stress and said it negatively impacted them. The C suite reported higher levels and experienced it appreciatively.

    I experienced this myself while on the bottom rung of the Marine Corps. No independence, no worries, massively detrimental stress. Once I climbed a few rungs and was given control and responsibility my daily strains dramatically increased, but I actually loved life again!

    I appreciate the mentality that you bring to the strain or “effort” of these two assets, Sam. Sadly, the modern response is to shy away from effort, most people shy away from effort seeing it as uncomfortable.

    Proper mindset seems to be everything. Is it stressful to maintenance your properties and post three times a week or a thrill to own and create? It reminds me of a violin. The durn thing only sounds best when stressed or strained by all four strings simultaneously. Loosen the D string out of tune and your A string will sound “off” even though it may still register as an “A” on the tuner.

    A blog and real estate eats time and money. Both require effort, but I think that same “effort” makes you more interesting than, say, just another early retiree hustling people at the tennis courts all day. Multiple efforts (especially ones you control) keep you in tune!

  38. “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.”
    You took the words out of my mouth. Do it all!

    I want to try it all. I have already been pre-approved to buy a rental but putting that 20% down is sort of killing my ambition. Do I sell $100,000 of stock to put in a down payment? Is it worth it.
    I want to be a slum lord but the price of entry might just be a bit too high.

  39. Ten Factorial Rocks

    Interesting comparison Sam. The biggest advantage of blogging over real estate is that it is truly Portable, and can be run from anywhere in the world. Theoretically, you can also be mobile while owning rental real estate but until you outsource all the property management tasks, that would not be practical.

  40. Stefan - The Millennial Budget

    Very unique breakdown and I think you weighted everything pretty accurately, based on your personal feelings. Real estate is definitely harder to get into but the income can be more reliable than a blog as you pointed out.

    I think one thing that anybody reading this post and is thinking of starting a blog out is that you need to be mentally tough. Many bloggers quit within a year because they either start it for the purpose of money and realize that money will not flow quickly or do too much in the start and get burnt out. Blogging is a waiting game almost as you need to be discovered and have credibility but once the ball starts rolling it seems to really pick up, at least from what I observe.

    1. Patience, perseverance, belief, and mental toughness. Sooner or later, you will get picked up somewhere if you stay consistent. Once that happens, the opportunities start rolling in.

  41. Thanks for the breakdown on each. My wife and I have talked about buying investment property, she thinks it’s a good idea, but to be honest she doesn’t understand how online business makes money. I’m pushing to get more income from online business before we start investing in such a large thing as a rental property.

  42. Simple Money Man (SMM)

    Hi Sam,

    Inspirational stuff! I’m still trying to get the hang of wordpress, widgets, plugins etc. But like you’ve mentioned before content is the most important thing. If you write stuff you believe in and can back it up, that’ll give the most satisfaction and it feels good to deliver something that has the potential to reach sooooo many people!

  43. Nice article. I agree that there are a lot of advantages to doing both for you given the established success of the blog. One bonus of real estate that you didn’t highlight is that it is easy to deploy extra cash and earn the same return on investment that you’re accustomed to. A blog on the other hand provides the best returns when you are willing and able to invest time.

    I recommend focusing your time on the blog and investing the profits in real estate. Maybe even hire a property manager to minimize the tenant and maintenance headaches.

    I would also have a slightly different take on the ease of starting a blog. I think the time required to build up an audience (at least 1yr) means you should definitely score it less than a 10. It would seem fair to figure the typical annual profit from a real estate investment and determine how much effort it would take to replicate that annual profitability.

    1. Ah, hope folks don’t confuse time it takes to launch a site versus building an audience. Let’s keep things apple to apples here by comparing launching a site to acquiring a property.

      On deploying extra cash to make money with your site, it’s actually very easy. Spend $1 in advertising to make at least $1.01 in returns. This is what affiliate marketers do all day long. Once you’ve found your proper test, you can throw money at it all day long and make lots of money.

      I should get started on this strategy! I’ve been totally organic, probably out of stubbornness and a “can’t be bothered” attitude.

  44. After reading your blog for several weeks now, I have become very interested in starting my own blog. I am struggling a bit to narrow down what I’d like to write about, but I’ll get there. I also have real estate, but if I could generate some additional passive income to help pay off the properties, I’d be further on my way to financial freedom! I do enjoy writing, I just hope people enjoy reading what I write as much as I enjoy writing it.

    I’m very glad I stumbled across your website as it had made me very motivated to achieve total financial freedom.

    1. Glad you enjoy writing. You won’t know whether people will like what you’ve written until you hit the Publish button. Of course, you could always guest post and “try before you buy” if you’ve got an interesting story or angle you want to share. Let me know.

  45. We shall see!!!!!

    Currently my real estate is paying the vast majority of my retirement income, takes little time to mange, and has appreciated 40% in the last few years.

    If my blog EVER gets anywhere close to that, I’ll come back to this post and tell you so.

    It may take a few years…or decades.

    1. How long did your RE empire take to build? I bet w/ equal amount of time dedicated to your site, you could crush your RE returns with 99% less capital. Hmmmmm, damn that sounds like such a good challenge.

  46. Financial Canadian

    Another huge advantage of investing in real estate is the insane amount of leverage you can achieve through a mortgage. Most online entrepreneurs aren’t going to be levered 4x, as you would be with a mortgage and a 20% down payment!

  47. Good stuff Sam! How long do you estimate it took you to gain meaningful traffic to your website? with the low startup costs you could go indefinitely and if you bring enough quality content the people will come. The story is not the same in real estate – need renters from day one.

    I am new here and have been binge reading your articles – awesome content…keep it up!

    1. Howdy. One year is a good minimum barometer. After one year, you can easily make $100 – $1,000 a month. After two years, $500 – $5,000 a month. After three years, it just scales up that much greater. If I was a $52,000/year earning median household in America living in an expensive town, I’d start an online business ASAP. The hurdle to get to $52,000 is not as high as someone who needs $200,000 / year to live in SF, for example.

      I’ve seen several dozen people who median incomes do just that and leave Corporate America several years later.

  48. Real estate is not like a bond. See 2007-2009. Also, if your entry point on a investment property is B/E at 2-3 years, you didn’t purchase the right rental property. Cash(flow) is king, not appreciation plus cash. Your calculations look like you’re banking on the come. And although you mention the like-kind exchange option, you really have a bit more income/ tax savings opportunity here than you lay out. That’s also a one-time every few years option that typically won’t work for folks with families, schools and real jobs.
    I love you didn’t try to sell us on either option being “passive income” because as you point out, both are and can be extremely active.
    Not sure a tangible vs intangible asset comparo really works but I love the effort! If the end goal of a blog is a book and consulting, so be it. But at its core, there’s no comparison.
    You’re actively buying revenue producing websites at 2-4x annual? Did I read that right? Where do you do that?!?

    1. I saw 2007 – 2009. I owned RE then. It was quite bond-like to me. Rent kept coming in and did not go down, just stayed flat. Principal values went down, so the rental yield went up just like a bond. And now principal values are way higher than the last downturn, just like bonds are today trading at 10% – 30% premiums to par.

      If the S&P 500 is trading at 25X trailing earnings, and operating profit margins are 70%+ with income producing websites, why wouldn’t I spend less than 5X operating profits in this low interest rate environment?

      See: https://www.financialsamurai.com/buying-selling-blogs-how-i-built-my-blogging-business/

      What made you decide to only write about Medicare?

      1. Sam,
        Been reading for a long time, but never saw that article. Thanks. And WOW FS has 200k backlinks? Looks like I’ve got work to do. How’d you get so many so fast?
        Why Medicare? A sense of service. From PhD to GED everyone finds the options and enrollment periods confusing. Throw in a healthy dose of sales agents and company ads and people get overwhelmed. The wrong choice can cost you money and access to healthcare. I wanted to create a place where I could help people. 10,000 people a day turning 65…. Now only if I had 1,500 articles like you! And those backlinks! I’ll get there. Time and typing…. Repeat.

        1. Hi Ben,

          Does FS have 200K backlinks? I don’t know actually. Where did you find this info out? I forget what those sites are called. I’ve frankly not paid attention to my stats in a long while after I hit a minimum goal a couple years ago.

          If you have a great passion for Medicare and keep it up over the long run, that is key. You just got to keep going for a long enough time and sooner or later you will get there!

          And once you are there, it is like a magical kingdom. I am not exaggerating either!

  49. I really like your comparisons of all the different factors, Sam. The amount you can (not in debt like real estate) leverage a blog to the huge amount of people on the internet is huge and I love the potential.

    I suppose both the blog and real estate require their markets to be growing to make more money (if advertisers aren’t willing to pay much, you lose out, and if the property crashes, that’s obvious). I like how diverse your blogging income and views can be, it only takes 1 tenant to not leave the property to wreck things.

    Tristan

  50. Apathy Ends

    Interesting breakdown Sam, never really thought of comparing the 2.

    The only real estate I invest in currently (excluding primary home) are REITs so I don’t have any control their either

    Blogging is definitelythe easiest way to try your hand at starting a business – the downside is you lose 50 if you quit, probably why so many blogs call it quits after 4-12 months

    1. That is an interesting point. It’s easier to quit if you DON’T have much skin in the game just like it’s easy to foreclose if you put nothing down on your home.

      I invested $1,100 or so to start FS by paying some random person off Craigslist to set things up. B/c of that initial investment, I was determined not to quit. Now, everything is so much easier and cheaper.

      1. Jack Catchem

        I’m glad things have gotten simpler! I don’t know if I could have trusted a Craigslist guy enough.

        I went for Bluehost’s 3 year rate to ensure failure was not a result of giving up too soon (and lower rate).

  51. Well I think I’m fairly aligned with everything you talk about in this post! Multiple rental properties and we own two of our own homes – nothing fancy, but nice. We’ll downsize into a rental by the lake next fall – and ask our tenant of 22 years to leave :( My hubby is working hard re-modeling a rental – but he’s retired from FT work, so that helps! What I find hardest write now is to write good content on the blog when back to work full-time for a few months. I still have a few part-time side gigs but mixed with the full-time job makes for very long days. But I’m hoping a once a week post for a few weeks is plenty and the power of the search engines is working too. I also think it’s very important to still read/comment to others. Giving first seems to give back an awful lot.

  52. The Green Swan

    I think this comparison is funny at first (mainly because I’ve never thought to compare my blog income to my investments… since my blog income hasn’t quite gotten to that level… yet). But in your case you absolutely and should do both! You’ve built a good base of rental properties and have built a strong online presence. Keep up the good work!

    1. I’m trying to make people realize would could become. Too many people give up before realizing the potential. I see the light. It is crazy how much opportunity there is once you have an online platform. It is way beyond what I ever could have imagined back when I started in 2009.

  53. FIRECracker

    Hmmm…interesting. I’ve never thought of comparing blogging to real-estate before. Though in my case, because I’m horrible at monetizing, I’d probably pick real-estate over blogging in terms of financial rewards (And you KNOW that says a lot considering how I feel about real-estate).

    That being said, I agree with your that in terms of joy, blogging wins easily! The amount of joy you get from writing, meeting like-minded people, and learning from others is incomparable.

    1. Right! A lot of people have blogs, but only a few can effectively make money from their sites. It’s a bit easier to make money from real estate. Also, blogging can take up a ton of time.

    2. You’re only horrible at the beginning, when you don’t fully realize the magnitude of your online platform. Give it a couple years and your eyes will start widening on the practically UNLIMITED upside potential to blogging.

  54. If you are capital constrained, a website is the way to go. You also never have to worry about the market being too “hot” to get in, right? Stocks are so high right now that it’s tough to build a dividend portfolio and real estate is valued high in so many markets too.

    You can always start your own business online and never worry about getting in at the wrong time.

    This was a great comparison Sam!

    1. That is a good point. When you start from scratch, there is NOTHING BUT UPSIDE.

      When you buy real estate or stocks today at all-time highs, the same cannot be said. You are more at the mercy of exogenous variables.

      I’d rather be more in control of my own destiny, or at least have the illusion of control. Who knows, maybe you or another blogger might highlight this post in a future post and this post could really start to take off as an interesting comparison!

    2. KP at PassiveFinance

      Great point! My research time has increased significantly for my stock investments (plus I’m covering EVERY position I make to cover my a$$ on the downside. No such risk when it comes to running your own online business.

  55. What a fun comparison to read. One of the comparisons that I thought might be a little unfair was the start-up cost. Sure, I can start up a website, start to finish, for about $100. However, I had to spend countless hours reading about plug-ins, SEO, marketing, and the like. I’m no where close to recouping my cost. I probably will have it back right at the one year point (I’m six months in), but I won’t have a suitable side income for a few more years.

    With real estate, sure my start-up capital is way higher, but my return starts nearly immediately. I understand your argument — you live in SF, it’s probably reasonably to build a 2 year break-even point into your rental; however, in Florida, and probably the majority of America, you can start making a few hundred bucks in operating profit at the start. Thus, the blog is easier on the front-end, but way harder on the back-end and vice-versa for real estate. Equates to a near wash in my mind.

    That said, I still think blogging has more upside. But I plan to do both and am hoping to buy my first rental in two years.

    Also, I just saw your new box for comments and subscription I really like that…may have to implement it for my site.

    1. To me, I LOVE to read and learn. I can read about new interesting things all day long, so reading about SEO, online marketing, social media were all fascinating to me. I didn’t see any of this as a cost, but a knowledge enrichment. If you see this as a cost, then blogging/creating an online business may not be the right thing for you.

      But I think everything new takes time to learn and get good at. Hence, the importance of doing what you enjoy.

      Are the returns in RE immediate? You might have to wait a month or two months to get rent, but then you’ve got to cover all your expenses. I would say coming up with a 20% – 30% downpayment for a primary/rental is easier on the front end than starting a site in under 30 minutes. No way!

      1. KP at PassiveFinance

        Sam – it’s amazing to me how long you’ve kept things going with FinancialSamurai. Most websites fizzle out because of lack of effort or make no money for the first few months / years, especially if they aren’t consistent in their output.
        I plan to follow your lead with my site, passivefinance.com – I have a long way to go but I’m going to keep plugging away! Btw, any recommendations on a good email service that integrates well with WordPress? Been struggling with mine..

        1. I just had a conversation with a friend the other day over lunch. She said to me “I’m amazed that you’re still able to find time and content to write twice a week after six months!”

          I couldn’t help but respond “So am I”. It’s way harder than it sounds. Best of luck to you to stay consistent!

      2. Oh, I enjoyed reading all of the stuff, because now I know it and that makes me a more rounded person. And now that I know it I apply it incredibly quickly in each article. However, it was still a lot of hours that I couldn’t spend working, or trading stocks, or reading other literature that I enjoy. It’s still a labor cost.

        And in my area, returns in RE (once you have a renter) are immediate. I can still buy a $65,000 home, put some renovations into it, and have a renter for $850-900 a month. After taxes, and expenses, insurance, and misc costs (like vacancy and maintenance) I can still take home 200-300 a month and get a 20-30% cash on cash return. Compare that with my blog, which took a week to set up after design and knowledge gathering, I’m still six months, best case, to recoup my cost. Although, I guess in two years when I buy my rental, maybe my blog will be producing $300 a month and then, absolutely, I will come back and say “FS — you were right.”

        1. Good stuff. If in two years you aren’t making $300 a month from your site after keeping a regular posting schedule of at least once a month I’d be shocked!

          Almost as shocked as you being able to buy a $65,000 house! How does that work? If you ever want to remodel a home or buy a new fridge aren’t costs astronomically high as a percentage of the home value? A GE range or Samsung fridge costs the same in Dayton as it does in SF!

          1. Yeah, I make a few bucks here and there, and then the occasional conversion as a Republic Wireless affiliate. But my readership is growing, so I plan to reach out soon to try and do a featured posting or something similar with a local business. It’s nice to hear though that, so long as I stay consistent, and true to my content, you don’t see me having an issue.

            And yeah, there aren’t many $65,000 left — most are going to be in the $75-85,000 — and they’re all going to be low income areas like Deltona and North Orlando. However, there are some gems to be had even in Central Florida. You are right though, appliance and other renos are going to be a good portion of your home value, so you just have to be careful on going a little lower end or striking a great deal. It’s possible to get sub $400 fridges. You’re still better off though. Super low mortgage, 3.5% and lower interest rates. Even if I have to buy a $500 fridge, I’m not going to snuff at 30% cash on cash.

            Before you get too excited though, most homes in Central Florida are selling for $250,000+. The only reason I am even considering doing low income rentals, is because I work for a police agency and have access to over 3500 coworkers that need that type of housing.

            1. Interesting stuff! One thing I tell myself when buying such expensive real estate in SF or perhaps Honolulu is that the fixed costs of refinancing, remodeling, expanding are such a lower percentage of the overall value of the house, therefore, there is a greater economic return.

              For example, yes a house might cost $1M here, and $250,000 there, but if I spend $400/sqft to build an additional 1,000 square feet of living space, I can sell at $800/sqft. But I’m not sure I can build for $40/sqft there to get $80/sqft sale price.

      3. Hi Sam,

        I have a question. How do you think the stock market will perform if democrat wins or if republicans win? Looking forward to your insights.

        Rene

        1. I think if Trump wins, the S&P 500 could tank by as much as 20% in the first month. Investors like certainty, and Trump poses a whole list of uncertainty. The market is currently getting spooked by his rising probability of winning (still an underdog), especially after Hillary’s “pneumonia.”

          Under a Clinton victory, I expect a relief rally, then fade as economics and earnings fundamentals take over. Less dire, but I’m still not bullish over the next couple of years. This is why folks need to take an ACTIVE role in boosting their wealth and income, be it through blogging, real estate investing, or whatever. Be prepared for one’s existing investments to be a DRAG on net worth, not a tailwind.

          Related: Investment Ideas At The Top Of The Market

          1. The Long Haul Investor

            Wow that’s quite the drop you expect Sam. The S&P has a lot of support in the 2100 area. I don’t see that type of move unfolding considering the way markets turned down and based from August’15 to May’16. Even if the market is “unhappy” about who wins the election I think you are mis-interpreting the market here. If a Trump win would cause the markets to decline, that move will be anticipated by sellers. You’d see the drop starting to unfold before the election.

            1. Sure thing. That is why we have a market.

              How are you positioning your portfolio and do you work in the finance industry? What do you expect will happen in the election and how do you think the market will move and why?

            2. The Long Haul Investor

              Sam I posted a reply but it’s not showing up in the comments. Either way I’ll try to re-do what I wrote.

              Exactly that’s why we have markets, and winners and losers.

              I position my portfolio to own the best names available, and I currently use downturns as opportunities to add.
              As for the elections I’m not sure why people think Trump is bad for markets/economy, and Hilary is good for markets/economy. I’d take the businessman over the lawyer. As for the election outcome all I can point to is the Election Indicator I highlighted on my site. It’s proven to be very accurate.

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