Website Investing vs Real Estate: Which Is Right Wealth Building Vehicle for You?

When considering where to invest your money, the real estate and online business ownership through acquisition both appeal those seeking ‘financial freedom’. Both avenues offer unique opportunities and challenges, but which is the better fit for you? Having contemplated this myself, I’ve chosen to stick with website investments.

Let’s jump into the nuances and I’ll explain my take have invested in both.

Mobility and Accessibility

One of the main reasons I prefer online business ownership is the ability to manage everything from my computer. I can work from a Starbucks or the airport and if anything breaks, the resources to fix it are all within my computer. While real estate doesn’t require you to be onsite daily in my experience, you’ll need to go on site to review and manage things. Yes real estate can be ‘managed remote’ but you’ll find out quickly the costs quickly creep up, while quality goes down.

Risk Profile

When it comes to risk, online businesses generally carry (substantially) more of it compared to real estate. They’re heavily influenced by platform risk—think of how changes in Google’s algorithm or a new competitor on Amazon could impact your business overnight. Real estate, on the other hand, is relatively stable. While property values can fluctuate, real estate assets don’t face a situation in which their value goes to ‘zero’.

Upside Potential

Online businesses offer more upside potential compared to real estate. You can scale an online business in countless ways, often without needing significant capital investment. Sweat equity—putting in the hard work—can lead to exponential growth. The nice thing about the sweat equity in online businesses is that it is often just planning, with the actual work outsourced at a low cost.

Real estate, however, is generally constrained by market comps and property type. While you can improve a property, its value is often tied to external factors like location, size, and property type. And improving the property is relatively costly — if you’re not actually breaking a sweat.

Effort and Management

This is a headache of online business ownership that is not really spoke about. Owning an online business requires a consistent effort to stay on top of things like SEO, the latest marketing methods, and keeping your products or services current. The digital landscape can change rapidly, meaning you need to be proactive and adaptable. Real estate, although not without its own challenges, tends to be more predictable. However, it comes with the headaches of physical property management—dealing with bad tenants, repairs, and maintenance, as well as potential damages from natural disasters.

On That Note

In the end, the decision between real estate investing and online business ownership comes down to your personal preferences and lifestyle. If you value mobility and are willing to take on more risk for the potential of higher returns, online business ownership might be the way to go. You might notice the online business world is highly appealing to a younger without kids demographcis.

If you prefer something more stable and are comfortable with the responsibilities of managing physical assets, real estate could be your better bet. This is generally appealing to those that have families and like lifestyle stability.