Web Real Estate is the New Real Estate

Arnold Schwarzenegger’s autobiography Total Recall is one of my favorite books. Something that always stuck with me is that Arnold didn’t make his early fortune as a bodybuilder or actor, but as a landlord and owner of a construction company.

Long story short, Arnold Schwarzenegger started working in construction because it was both a good source of extra income and a good way to get extra training for his bodybuilding career. He gained experience, started a construction company with his friends, and used his experience and connections in construction to start buying and fixing multi-family rental properties.

It is unlikely this strategy would work for a web developer in 2021. Rental cap rates are extremely low in the US, and construction is not a good side hustle for web developers. But we have something better.

Blogs monetized via ads/affiliate links sell for approximately 2.5x annual profits. This isn’t great news if you’re looking to build and sell blogs. But this is great news if you’re looking to buy income.

To put it into perspective, with cap rates in San Francisco at 3.5%, that means rental properties in San Francisco are selling for nearly 30x annual revenue. A stock with a 5% dividend means that the stock is selling for 20x annual payouts to investors. Buying blogs takes a lot less capital to buy the same amount of income.

Plus, since many of you are cutting-edge web developers (you’re reading this newsletter after all), you have an edge when it comes to maintaining and improving sites. Maintaining sites definitely qualifies as a good side hustle for web developers, because it helps you practice skills you use at your job.

Like how Arnold Schwarzenegger used his construction skills as an edge in buying real estate, maybe web developers should use their skills as an edge in buying websites.