Real Estate Investing Is Back On the Table

By | March 29, 2012

A few weeks ago I wrote about how I was starting to see a shift in my early retirement plan, when I said that online real estate is better than physical real estate. The truth is that owning and managing websites still has a lot of advantages to owning rental properties. Yet, my approach is coming full circle to include rental properties once more. You may think that I am wishy-washy in my thinking, but that’s what this blog is all about.

Passive Income to Retire is all about my goal to develop passive income from various sources. It not only tracks my goal with the passive income reports, but it shares my opinions about everything involved. If you think that the best plans are those that don’t change, you are grossly mistaken. I think that the best ones are those that adapt and change to meet the changes of the market that they are currently facing and will face.

Why I Was Re-Thinking Real Estate Investing

I wrote the article about online real estate (a.k.a. websites) being a better option primarily because of two reasons:

  1. There seems to be better rate of return, with lower upfront costs. If I can generate $500 per month with a blog that costs me less than $10,000, why would I instead take this money and use it as a down payment on a rental property only to see at best $100-$200 positive cash flow for the next 30 years?
  2. I wouldn’t have to deal with tenants or maintaining a residential property. Not only would this be a hassle, but it would require me to learn a whole new trade. I don’t know the first thing about maintaining a house, let alone how to detect if a property needs major repair.

I think these two reasons say enough about why I thought it wasn’t the best route to take. Online income seems to be the way to generate income within a short period of time. Yet, as events unfold online, I am starting to move back towards my initial plan to achieve early retirement.

Why Real Estate Investing is a Real Option Now (again)

Real estate investing is not a get-rich-quick scheme. In fact, it’s often a long-term means to build wealth. While it may not be easy to produce income in a short period of time, it is a legitimate long-term source of income. The simple fact that people will always need a place to live echoes in the back of my mind as I write this. This old saying describes one of the most attractive parts to real estate investing – a almost guaranteed source of demand. People will always be renting – it’s as simple as that. That is why a property investment is so attractive.

The truth is that this is the major reason why I am considering real estate seriously (again). Unlike the internet, whose source of income seems shaky at best, real estate investments offer a long-term source of income. Just recently, many sites faced penalties which greatly restrict their potential income. At this point, none of my sites have been hit, but it does remind me that making income online is not as easy as it sounds. It indeed takes time to build up a site and it is hard to make sustainable income from either CPC (cost per click) advertisements or affiliate ads (payment upon conversions).

It is for this reason that I will be using the next year (as I originally planned) to do two things:

  1. Develop my websites that I currently own. Not only working to increase their traffic, but also income. I am going to make an extra effort to build up the sustainable sources of income and not just rely on private advertising. This next year will be a testing phase to see if I can make any serious (sustainable) income that will make me comfortable with doing this long-term.
  2. Use the income generated from my websites as money to invest in real estate. I will use the money that I have saved from my websites as a down-payment for a rental property. This will help me diversify investments and offer me a long-term source of income. The truth is that if I had enough money right now, I would probably look to buy a rental property – but I don’t. It’s only a matter of time, though.

Have you considered real estate investing?