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. You could buy a duplex for as little as $110,000. You could rent this particular one for around $500 per month per unit, so that’s $1,000 per month. If I pay a little and get a decent mortgage rate on a 20-year loan, I’d be paying about $800 a month for mortgage and property taxes. So I would pocket $200 a month minus any expenses, vacant months, maintenance, etc. Anything he made extra, he would probably use to pay down the principal, so he could pay it off sooner and avoid some interest. Nothing bad. Hopefully, after 16 years, I would be mine free and clean and either take the full lease or sell the duplex for a lump sum. I’m no real estate expert, but this doesn’t sound so good to me.

Now let’s take a look at a passive income online. I do some research and find some niches that I think are profitable. I build some websites. Domains and hosting cost me less than $200 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 earn $300/month per website or $900/month total. I then dedicate a few hours each month to maintaining my residual income.

Comparison time.

The total cost or capital required is not comparable. Anyone can afford to make a passive income online if they have the time. You sure don’t have to have a lot of money to get a duplex loan if you have good credit. But then you’re using your passive income to pay off the mortgage. With a passive income online, you are pocketing almost the entire amount, aside from the taxes you pay.

Required time. This one goes to rental income. While the time is likely to come even after the first few months, the initial time investment will be higher with creating income online, plus it may need to be repeated over the time frame we’re discussing.

Final take. With passive income online, I make $10,800 a year before taxes and expenses, assuming I don’t do 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 to a mortgage. I didn’t need credit or money for a down payment. In my opinion the choice is clear, online passive income wins hands down.