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Further Comparison Of Online Income vs. Real Estate Income

7 December 2010 2 Comments

In the past I’ve compared online income versus real estate income (read here).  I’d like to comment on this further.  As my online income has stabilized and held up even with some advertising attrition, I’m further encouraged about the ability to generate significant income from online properties.

This continues in the midst of a prolonged weak real estate market.  Let’s compare on a few characteristics the two…


Most individuals generating a return on real estate have significant debt on the properties.  Most of the times, in the order of hundreds of thousands of dollars.  In order to own the properties to cash-flow them, debt is used.

Online income is built with straight hard work.  No debt needed.


Piggybacking off the last point, debt increases risk.  If you own real estate via debt and you lose your tenant, you might get screwed.  If your online income dries up, it’s no big deal, you don’t owe any money.  You can wait it out until income picks up without any increase in stress.


Many would probably speculate that online income isn’t consistent, and while it’s valid to an extent, how consistent is rental income nowadays?  You can easily have a tenant bail on you in the middle of a contract/lease, or your tenant might lose his or her job, or just decide they’d rather buy an ipad than pay rent.  With the current economic environment, tenant management is extremely tough.

I Prefer Online Income

I have no intentions of purusing rental income.  I know several people personally with both residential and commercial rental properties.  Most have had troubles.  All have significant debt.  Some even have hundreds of thousands in debt and the constant headache of the property all for a measly few hundred bucks a month in cash flow.  The rate of return is low, and my websites are generated well in excess of that with none of the risk and none of the debt.

Yes, I will continue to pursue various online income streams.  Read more on online income here.


  • Rojo said:

    Agreed. Rental income is riskier, and it is nothing short of a pain in the a**. I view my rental properties as nothing more than a savings account to be built up over time. They offer nearly nothing in terms of income, and I am lucky enough to be able to keep them afloat out of my pocket. Believe me, tenants suck.

    the only positives for real estate are:
    1. inflationary protection
    2. depreciation and other potential write-offs. these are only positives if you have income to offset.

    Most of us with RE investments have no choice but to hold them now, but if you have the cashflow and the ability to get debt, it could be a good time to buy…

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