Nowadays, people search for new ways to make money from home or build next-level wealth. However, whatever their preference is, choosing between real estate vs. blogging is worth considering. Especially to work out which out of the two, real estate and blogging, is a better investment strategy.
Some people love blogging and think that it is a better investment strategy. On the contrary, if you are a real estate investor, you will love real estate due to its tangibility, predictability, control, income, utility, etc.
Both of those investment strategies require different amounts of capital, effort, and skills.
Therefore, I thought it would be reasonable and intelligent to write this article and to provide a real estate versus blogging comparison. In that way, by understanding these two terms, one will get the idea of a better investment strategy.
But, before reading further, it is better to know about real estate investing, blogging, its pros and cons, and finally about which is a better option among both.
Let’s start rolling… Shall we?
What is Real Estate Investing?
When investing in real estate, a person’s primary goal is to put your money to work today to help you make more money in the future. Therefore, whatever profit or return you will get will help you cover the risk and taxes you pay.
Moreover, there are also some other costs of owning real estate. For instance, it includes utility, insurance, and maintenance.
However, it is necessary to understand the basic concept of investment, economics, and risk. Thus, it will help you to know more about real estate investing.
When you understand real estate investing, you can buy more and more properties while avoiding bankruptcy, etc. Apart from that, you can also earn more through rent and even buy more properties.
But always keep in mind that if you make a mistake, then the consequences can be from minor inconveniences to major disasters.
Now the question might come to your mind: what is the real estate investing definition?
Here we go…
Real estate investing is the purchase of property as an investment to generate more income instead of using it as a primary residence.
In more simple terms, it is correct to say that any land, building, infrastructure, and other tangible property is movable but transferable. One can say that it is a secure form of investment.
Some examples of real estate are a house, any office buildings, commercial pilots, any agricultural land, etc.
According to Forbes, many billionaires made more wealth through real estate investing more than any other category. The combination of a consistent cash stream flow, capital appreciation, and tax breaks lay the foundation for great fortunes and stable retirements.
But the fact is billionaires are not the only ones who know how to invest in real estate. In short, you can also do it and invest in real estate from whatever continent or country you belong to, like Australia, the USA, Canada, Europe, etc.
Now, let’s turn on to blogging…
What is Blogging?
Another excellent investment strategy is blogging. But we need to understand what blogging is
and why it is so essential for everyone to have a blog.
A simple process that implies creating articles, photos, and other forms of content is blogging. The primary step of blogging is publishing them on a website.
Most importantly, some of its essential characteristics include regular updates, informal language, a laid-back atmosphere, etc. Similarly, it also has essential tips, life hacks, and a high level of customer engagement.
The word blog has a short form that is “weblog.” However, these weblogs allow early internet users to “log” the details of their every day in diary-style entries.
The most fantastic thing about the blog is that it will enable readers to comment on other blogs and engage in helpful conversations with them.
The content of every blog varies significantly. For instance, some people have travel, fashion, health, business, and technology blogs. Thus, it depends on one’s interest and which niche one will choose for blogging.
After understanding real estate investing and blogging, we can further discuss the pros and cons of both terms.
Pros of Real Estate Investing
The remarkable thing about real estate investing is that it is highly profitable for many people.
Some people are willing to hold on to their property for a longer time. However, they do this to take advantage of property appreciation. On the contrary, some go wrong in their decisions and face a loss.
The following are the pros of real estate investing.
1. Acquire Real Estate at a Below-Market Price
Sometimes some sellers want to sell the property quickly. Hence, if you have sufficient funds in hand, you can purchase the property at a below-market price; however, if you want to take advantage of these anomalies, you must have deep knowledge of the local market prices.
In short, this becomes easier to obtain if you commit yourself to real estate investing on a full-time basis.
2. Steady Cash Inflows
Suppose you have enough rental properties going on, so you have a stable income stream for your business. A property that is on rent generates monthly rent payments. Therefore, it is the reality that real estate generates steady cash inflows that are beneficial for you in the long run.
Besides this, some properties have additional payments like washers, dryers, storage, parking, or electrical maintenance etc. Hence, the net cash inflows may be substantial depending on the offsetting cash outflows for maintenance, property taxes, and mortgage payments.
3. Defer Taxes
Until you sell it, you don’t have to pay income tax on any increases in property value. It will not take place until years to come after the initial investment.
Under the current tax laws, it is possible to roll the gain over into another real estate investment, further extending the tax deferral period. Therefore, because of these mechanisms, one can avoid income tax on the sale of a property for the entire life.
Tip: Tax laws differ between countries and even within different regions of the same country. Please take advice on tax regulations applicable to your location through a qualified Accountant.
4. Appreciates
Another great advantage of real estate is that it appreciates but depends on the area and local demand levels. However, it can vary for a shorter distance, but it can understand a more extended period if you choose the property carefully.
The value application of real estate is beneficial for people, and for you as an investor. Thus, it is correct to say that the purchase of property that encounters capital appreciation is a real estate investment in the long run.
Time and patience are the key to your real estate success…
Cons of Real Estate Investing
Despite the benefits we have read above, there are also a few cons to consider before investing in real estate.
Don’t get me wrong; the following cons are significant enough to keep some from proceeding.
1. Requires Time
Suppose you invest in real estate, so it requires a significant amount of your time. You will need to learn about the neighbourhoods in which you are investing.
Secondly, you should identify the problems with prospective investment opportunities. Then, you must know how to deal with maintenance issues.
However, you can hire a property manager who will deal with tenants.
But, dealing with the property manager also requires a certain amount of your valuable time and a positive professional approach.
2. Transaction Costs are High
The cost of transactions related to buying and selling is quite steep. These costs can easily wipe out the appreciation in the market value of a property.
These costs include;
- loan origination fees,
- commissions,
- title insurance, and
- closing costs.
You can offset these costs if you hold the property for an extended time. Thus, in this way, they can appreciate it to a substantial degree.
Agent’s commission
also has many costs and varies by property type. The Realtor will charge his highest commission on a free-standing home. No question!
3. Requires Maintenance
Sometimes, unexpected maintenance issues arise — for instance, a leaky roof or a failed water heater.
However, the replacement or repair cost may be substantial, and it can also wipe out your cash reserves if the home inspection on a recently acquired property did not spot the issue so it can come as a surprise. Hence, it is also a disadvantage that real estate requires maintenance.
4. Unique Risks
Investing in real estate has unique risks that need to be adequately understood. Some of them include buying the wrong property at the wrong time.
Sometimes there will be increased liability of accidents on the property. Another one stuck with a professional renter who knows how to work with the legal system at your expense. That’s when an experienced property manager can make a difference!
Getting overleveraged is another pitfall that can bring down a real estate investor. In addition, you must make monthly payments on your debt.
In short, you must make payments despite tenant problems, maintenance costs, unexpected repairs, market dips, etc. You are the owner, and it is your responsibility!
After understanding the pros and cons of real estate investing, we must know about the advantages and disadvantages of blogging too to compare real estate investing to blogging.
Starting and maintaining a blog is not an easy task but a big undertaking.
There are a lot of pros and cons of blogging, but the main ones of them are as follows.
Pros of Blogging
It is correct to say that blogging is one of the most convenient ways to make money online. Hence, it is one of my personal favourites to have a blog or a few.
Let’s get into the four essential pros of starting a blog.
1. Ranking Optimization
Suppose you will create valuable and informative blog posts, allowing you to rank higher on the search engine.
With evergreen articles, this is obvious that your website will rank better on Google and drive organic traffic.
In addition, to improve your site’s performance, you must update your content regularly.
2. Good Relation and Communication
Customer and reader engagement is an essential task with your brand promotion and sales. That is why it is necessary to reach your target audience and connect with them.
Starting your blog allows you to get a wider audience. Thus, they can explore your relevant content, rate your material, and leave valuable feedback.
Apart from that, you can update your customers with your company’s latest launches, products, and news. In this way, you can have a good relationship and better communication with your audience.
3. Additional Revenue Generation
Blogging allows you to make additional profits. Thus, if you have a successful blog, you can generate more income by selling products and from blogging itself.
For instance, your revenue can come from affiliate links, traffic, advertising, webinars, sponsored content, e-books, courses, etc.
4. Flexibility
Blogging is a platform that is available all the time means, 24/7.
As a result, bloggers can write and publish their content any time of the day. Not only that, but they can also access their blog anytime.
Unlike other jobs, people who have blogs can work at their convenience. Thus, it depends on the blogger’s choice to blog part-time or full-time. If you are on a work schedule, it gives you the flexibility to manage your time accordingly.
Cons of Blogging
The following are some of the cons of starting a blog.
1. Time Consuming
Blogging does not come easy, and it is a challenging or demanding task.
Whether you have an e-commerce store, blog on any particular niche, etc., it will take a lot of time to establish yourself as a brand.
Likewise, if you aim to make money online, you still have to put in the work. Some work includes new blog topic idea generation, blog posts, keyword research, and interacting with other influencers.
Thus, all of these will take time and effort.
2. Requires Patience
If you want to become successful overnight, then blogging is not the source of money that will make you rich. Not at all, so to find success, you need to have patience as your website traffic compounds over time.
However, the moment you get too giddy and start spamming or over-sharing, then it is time you get yourself in the penalty box.
3. Consistency
One of the most demanding parts of blogging is maintaining consistency.
Most importantly, blogging is not about posting one or two blog posts and then stopping at some point. Instead, you have to post one blog per week to attract readers.
On the contrary, if you are inconsistent, it will harm search engine optimization.
4. Negative Comments
Once you start your blog, you have to face haters as well as everyone on the internet is not that gentle. No matter how genuine your content is, some people don’t agree with your opinions.
Thus, if you are a person who gets offended easily, then blogging is not for you.
The only way to handle negative comments is to delete them.
Which is Better? Blogging or Real Estate?
Whether you choose blogging or real estate depends on your interest. But before choosing, you must read the above pros and cons of real estate investing and blogging as it would help you decide which investment strategy is better for you.
Some people love real estate investing, and others prefer blogging because both are entrepreneurial endeavors. Some even do both!
However, you are the king and queen of your castle and CEO of your valuable business in both businesses. Being your boss feels so much better than working under someone or having to report them.
Both are better, but you have to see your circumstances and budget before choosing any one of them.
When Blogging is a Better Option over Real Estate?
Blogging is a better option than real estate when you want something easy to start and maintain with no to fewer risks involved.
Blogs are pretty easy to start as you can create a blog in 30 – 60 minutes or less. However, you need to add your creativity or hire a person to develop original content and pleasing design. Because of lower start-up costs, people prefer blogging instead of real estate.
Apart from that, real estate income is stickier, but blogging is much more volatile. Similarly, there is no risk in blogging while in real estate if the property declines, so you can lose your down payment.
When is Real Estate a Better Option over Blogging?
Real estate is a better option than blogging if you are more inclined toward these three factors. They are profitability, sustainability, and exit potential.
If you purchase a property, rent it out later to be profitable for you. The longer you rent out your property, the more prominent your operating profit margin will be.
Similarly, real estate is incredibly sustainable. You have to keep up with the regular maintenance, and the property can last over 50 years easily if you maintain it well.
It is also easier for you to sell real estate. There are more homeowners than bloggers. Therefore, the market to sell the property is quite large.
Conclusion
There is always a debate about whether blogging is better or real estate is the best investment strategy. However, it depends on your suitability and interest.
Some people like real estate, while others love blogging.
Real estate will be your best investment if you are more towards an income-producing investment. One of the most excellent perks of real estate investing is its positive cash flow and steady passive income.
On the contrary, some people consider blogging as a much better and more worthwhile investment strategy. These people think that blogging is a more visible way to showcase your brand, niche, content, product knowledge, and industry.
What do you think? Which investment strategy fits well with your strengths and interests?
