Digital real estate is a property that is on the web. This can be websites or social media profiles, YouTube channels, or anything else that would be found online. In my example, I am primarily talking about websites that can be bought and sold as an asset.
I believe that digital real estate is going to produce a better return for 2023. The housing market is still overvalued and it will be another year until we see values hit what I would consider a good deal again.
Here is how I compare the two.
Valuations for websites right now are between 30 and 55 multiples of earnings. This means that if you can get a website up to a $1000.00 per month profit you will get somewhere between 35000 and $55000 if not more for that website. Now if you are really good you can get your website up to 1000 per month in less than 6 months but easily within a year.
Let’s say you need 100 articles to get to 1000 per month and on average you are paying 50 per article if you cannot write them yourself. That means you have invested 5000 into content and maybe another 1000 into link building, hosting, and web development. That leaves you with a profit of anywhere from 29000 to 49000 at a minimum.
If you invest in a house, let’s say it costs you 150000 it needs a little bit of work and you think you can resell it for 20% profit or 180000. Let’s say you just do the minimum to the house to resell it because you got such a great deal.
Typically the minimum is painting, flooring, and some maybe some light landscaping or remodeling. Right now the price for getting anything done is really high and in my area, the cost for doing this on a 2000 square foot house would be about 10000 to 15000.
So if you buy a house for 1500000 put 10000 into it and sell it for 180000 in six months your profit is 20000 now this does not include any real estate fee’s for the broker or title agent, inspection fees, or capital gains since you only held it for 6 months.
Now based on this example the website is the better deal and could make you more money, but the website is riskier. There is no guarantee that you will make any money from it. You may have picked a bad niche or google never ranks your content or delists you. There is much more risk in digital real estate than there is in traditional real estate.
With traditional real estate, you will always be able to resell the home or at the minimum rent it out and at some point sell it. Whereas with digital real estate that is not always a guarantee.
I really think you should invest in both to hedge your bets. If one goes down the other hopefully goes up and in a perfect world both go up and you hit the jackpot
I personally am investing in digital real estate for 2023. I plan on trying to test out 1/2 dozen or so niche sites and go all in on one really big content site, that I am going to try and turn into an authority site in its space. I will keep you updated the as I go through 2023 and what I have learned and what my strategies are
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