One type of passive income versus another. Let’s see how they stack up.
First we’ll start with rental income. Where I live real estate is cheap. I could buy a duplex for as little as 0,000. I could rent this particular one out for around 0 a month per unit, so that’s ,000 a month coming in. If I put a little down and got a decent mortgage rate on a 20 year loan, I would be paying about 0 a month for mortgage and property taxes. So I would pocket 0 a month minus any expenses, vacancy months, maintenance, etc. Whatever I did make extra I would probably use to pay down the principal, so I could get it paid off early and avoid some interest. Not bad. Hopefully after 16 years it would be mine free and clear and I would take in the full rent or sell the duplex for a lump sum. I’m not a real estate expert but this doesn’t sound that great to me.
Now let’s look at an online passive income.
I do some research and find a few niches that I think are profitable. I build a few websites. Domains and hosting cost me less than 0 a year. I spend a few months developing a product, promoting another product, or whatever method I decide to use for that particular niche. I promote the websites, write articles, build backlinks, exchange links, pay-per-click, social bookmarking, etc. After a few months of dedicated work, I am making 0 a month per website or 0 a month total. Then I spend a few hours each month maintaining my residual income.
Time for the comparison.
The total cost or capital required is no comparison. Anyone can afford to build a passive income online if they have the time. Sure you don’t have to actually have much money to get a loan for the duplex if you have good credit.
But then you are using your passive income to pay off the mortgage. With an online passive income you are pocketing almost the whole amount other than the taxes you pay on it.
Time required. This one goes to the rental income. While the time probably comes out about even after the first several months, the initial time investment is going to be greater with building the online income, plus it may need to be repeated over the time frame we are discussing.
Final take. With the online passive income I make ,800 a year before taxes and expenses assuming I make no other websites. I am putting money in my pocket right away that I can invest or use for other opportunities. My money is liquid and not tied up in a mortgage. I needed no credit or money for a down payment. In my mind the choice is clear, the online passive income wins hands down.