Buying a Blog For Passive Income? What You Need To Know

Are you looking for a passive income investment that can potentially yield over 30% returns annually?  Sounds too good to be true, I know.

But, if done correctly, buying a blog for passive income may do just that.

Unlike other some online businesses, buying an existing blog can generate passive income without you having to do much of anything.  There is no inventory to manage or customer complaints to address (unlike Amazon FBA or e-commerce) and no employees to supervise.  

Blogs are generally monetized through ads or affiliate links placed on the website (we'll discuss more about these monetization channels later).  So you get paid every time someone visits the blog and clicks on ad or buys a product you are promoting through one of your affiliate links.  

It's really that simple.

That being said, buying an online business comes with significant risks, especially if you don’t know what you are doing.  You need to be aware of these risks and carefully consider them if you want to pursue this passive income strategy.

With that in mind, we are going to cover three areas (click on the link for each part to go directly to that area):

Part I:  Introduction to Blogs

  • What Is a Blog?
  • How Do Blogs Make Money?

Part II:  Benefits of Buying a Blog for Passive Income

  • Affordability
  • Passivity
  • Strong Returns
  • Growth Potential

Part III: Risks of Buying a Blog for Passive Income

  • Buying the Wrong Blog
  • Google Changes Its Algorithm
  • Competitive Pressures
  • Mismanagement of Blog
  • Monetization Channels May Change or Go Away

There’s a lot to cover, so let’s get started.

The information contained in this post is for informational purposes only.  It is not a recommendation to buy or invest, and it is not financial, investment, legal, or tax advice.  You should seek the advice of a qualified professional before making any investment or other decisions relating to the topics covered by this article.

Table of Contents

What Is a Blog?

According to Wikipedia, a blog is a discussion or informational website published on the web consisting of discrete, often informal diary-style text entries. 

For example, this website is a blog.  Simple enough, right?

How Do Blogs Make Money?

There are four main ways that a blog can make money:

  • Ad revenue
  • Affiliate Marketing
  • Sponsored Content
  • Selling Its Own Products and Services

Ad Revenue

You can make money by getting ad revenue from an advertising network, like Google AdSense.  If your site gets a lot of traffic, that’s valuable online real estate.  Companies want to place ads on your website so that you can drive customers to them.   

Ad networks have relationships with these companies.  So when you work with an ad network, they will place ads on your website and you will receive part of the money that these companies pay the ad network for this placement.  

Generally, you get paid in two ways: (i) on a “per-click” basis, which means you make money each time a visitor to your website clicks on one of the ads placed by your ad network; or (ii) on the basis of “impressions,” which just means that the more people view the ads on your website, the more you will get paid.  

Affiliate Marketing

You can also make money by affiliate marketing.  That’s when you have an arrangement with a company to market their products and services on your website.  

You do this by adding custom links or banners throughout your website that link to that company’s sales page.  That link allows the company to know that you are the source of the referral.  

If a visitor to your website clicks on the link and purchases the promoted product or service , then you get a commission based on the sale.

Sponsored Content

You can also make money by agreeing to write sponsored content.  Similar in concept to affiliate marketing, this is where you write posts that promote a company’s products or services.  

Sell Its Own Products and Services

You can also make money by selling your own services and products on your blog.  This could include t-shirts, informational courses, memberships, or any other products or services you create.  

Ok – now that we've covered the basics, let's dive into the benefits of buying a blog for passive income.  

Benefits of Buying a Blog for Passive Income

The main benefits of buying a blog for passive income are affordability, passivity, strong returns, and the ability to grow revenue.

Buying a Blog Can Be Affordable

You can buy small blogs at a very affordable price (think under $1,000).  As with any business, the larger and more profitable it is, the more expensive it’s going to be. 

Several sites offer a marketplace for buying online businesses, but some of the most popular are flippa, empire flippers, and FE International.  Flippa has the cheapest sites, with Empire Flippers taking the middle slot, and FE International operating at the high end of the price range. 

Buying a Blog Can Provide Passive Income

One of the best features of buying a blog is that someone else did the hard work of setting up the blog, writing all of the content, and establishing the monetization channels we discussed before.  If you buy the right blog, you can get a steady stream of income without doing much.

To be fair, owning a blog is not going to be completely passive.  You will still need to monitor the blog to make sure it is performing well.

You may want to occasionally update all of your plug-ins (plug-ins are like apps for your blog that help you do certain things, like protect the site from attacks, monitor analytics, help your site to have fast loading times, etc.).  There is an auto-update feature for most plug-ins if you really want to automate it and don't care to monitor what's changing. 

If you want to create new content after you buy the blog, you will need to hire writers to do that or you will need to do the writing yourself.  The effort of growing a blog means your investment will now be less passive, but it can be a profitable strategy if you want to pursue it.

Buying a Blog Can Provide Strong Returns

Based on what I have seen on the various online marketplaces, most blogs command multiples of 25 to 40 times their monthly net income.  So if a blog makes $1,000 per month, you can typically buy it for $25,000 to $40,000.  

In a year, that blog would make $12,000, so you are looking at an annual return on your investment of around 30% to 48%.  Of course, that is in a hypothetical scenario.  There are risks to buying blogs that can affect those numbers, but we will get into that later on.

Another nice feature of a blog is that ongoing costs are typically low.  

There is little risk of going out-of-pocket on a given month so long as your average revenue is pretty good.  Compare that with brick and mortar businesses that have high fixed costs (like rent) and inventory to deal with.  

You Can Grow a Blog's Revenue

As mentioned before, a blog is a business and you can grow it.  

There are several ways to do this, but the most obvious way is to add more content.

Each article on the website is a source of potential additional traffic, so the more articles you have the more potential traffic you can have. 

More traffic can lead to more ad revenue and can also help other sources of monetization, like affiliate marketing. 

You can also grow the blog by rewriting old posts to improve their Google rankings, switching to an ad network that pays more (Google Adsense is a good initial option, but there higher paying ad networks that you can qualify for as your site grows), increasing traffic through social media channels, or improving your backlinks profile to raise your website's authority with Google.  

If you choose to grow your backlinks, you need to be careful about how you do it.  We discuss some of the dangers of building backlinks later on in the article.  

You can also start a youtube channel that links to your blog.  This can be a fine source of additional traffic to your website.

Finally, if there are monetization channels that the existing blog did not use (like an ebook, web course, etc.), putting those in place can also boost revenue.

Risks of Buying a Blog For Passive Income

The main risks of buying a blog for passive income are:

  • Buying the Wrong Blog
  • Harmful Google Algorithm Updates
  • Competitive Pressures
  • Mismanagement of Blog
  • Monetization Channels That May Change or Go Away

Buying the Wrong Blog

Buying the wrong blog is far and away the biggest risk here.  You should be hyper-focused on getting this right.

Scams

Scams abound in this space.

People set up sham websites and try to sell them.  Or they may take your money and never deliver the website.  The website could be propped by fake numbers.  In short, the scams can take many forms.

The best protection against these types of scams is thorough due diligence. Don’t take things at face value.  Dig into the claims made by the sellers.  We talk about some of the things you should do in the following sections.

And if you can afford it, go with one of the premier selling platforms like Empire Flippers or FE International.  They vet the websites being offered on their listing platform, so you know that experienced pros have examined the websites beforehand.  They also have in place escrow services and other protections that help prevent fraud.

You can use Flippa and there can be some great deals there, but it is much more like the Wild West.  You have to be skilled at figuring out the good from the bad.  If you are a first-timer, I would be extremely careful.

Misleading or Fake Numbers

Some sellers may provide inaccurate or misleading numbers.  These include traffic numbers, income numbers, and expense numbers. 

With regard to traffic, make sure you get access to the seller’s Google Analytics account, so you can see the numbers as reported by Google.  This is standard practice.  

Sometimes you will see a sudden boost in traffic – there could be a lot of reasons for this, so make sure you get to the bottom of it.  Was it due to paid advertising?  A flurry of blog posts?  Bots or other sketchy strategies to boost traffic?  You need to find out.

With regard to income, make sure you confirm the revenue numbers that the seller is providing against statements from affiliated programs and advertising networks (and any other monetization channels). Make sure the numbers match.  Check expenses too and make sure they make sense.

If you need help or feel something is off, you may want to hire a due diligence specialist who can look into all of this.

Questionable Backlinks

You want to avoid sites that have used questionable backlinks strategies.  A backlink is a link from one website to another.  If the site giving the link is a good one, the website receiving the link will get a boost from google because it is now viewed with more credibility.

If this happens in the normal course, that’s fine.  For example, a website owner may have found your content helpful and linked to it in one of their articles.  I do it all the time.  

But some people use sketchy strategies for building backlinks, like buying backlinks from a site or putting in spammy links pointing to their site in the comments sections of other websites.

Google does not like these practices and if it finds out, the website could take a hit.  You can examine a site’s backlink profile by using tools like SEM Rush, Ahrefs or other backlinks evaluators to see if these questionable practices are going on. 

You also want to be careful about private blog networks (PBNs).  These are a network of websites that link back to the main website.  Google does not like PBNs either and may penalize a site that participates in one.  

Source: Neil Patel

A lot of buyers don't like PBNs, so some online platforms will require companies listing with them to state whether there are any PBNs in place.

No Diversification of Traffic Sources

If the blog heavily relies on a single source of traffic, look into that to make sure you understand the risks there.

If the majority of the traffic is coming from organic search, I tend to like that.  

But make sure the site follows Google’s guidelines and best practices.  Check to see if any manual Google penalties were assessed against the site.  Look for trends and any unusual activity (sharp spikes up or down).  Get to the bottom of them.  

The same thing holds for social media traffic and referral traffic.  Some diversification is helpful.  As I mentioned before, I prefer a site that has solid organic search traffic rather than one that relies a lot on Pinterest or other social media channels.  

But the bottom line is that an over-reliance on any single traffic source creates risk.

Similarly, if all of the traffic is coming from just a handful of blog posts, that’s a red flag too.  If someone writes a better blog post on the topic, your site could be badly impacted.  Or if a google algorithm update occurs and those posts are negatively impacted, your website could be in trouble.  More on that later.

Newer Sites Are Risky

If you are looking at a newer site that isn’t making money yet, be careful.   Maybe you are hoping for it to mature into a profitable site.  It’s a big gamble.  A lot of things can impact a site’s profitability and a lot of things have to go right. 

Even if you buy a profitable site, but it’s still fairly new (less than a year old), be cautious.  It is much safer to buy a website that has had steady and stable traffic flow for a while.  You know that there is consistent search volume for the topics covered by the blog.

In fact, a sharp upward curve in traffic is not necessarily a good thing.  For young websites, it could mean that the traffic has not stabilized and you could experience a sharp drop soon. 

Be especially careful if the new site focuses on YMYL topics.  YMYL stands for your money or your life.  Google will be very cautious about putting new content in front of people when the topic relates to a person’s health or their finances, career, etc. 

That means that the new site that focuses on YMYL topics may never take off.

Blog Has Wrong Type of Content

Make sure that the focus of the website is not on a fad that can disappear.  You want to see evergreen content that is going to be relevant for a long time. 

Google Changes Its Algorithm

You probably know that Google runs periodic changes to its search algorithm.  In most cases, they are minor tweaks, but every so often, the changes are significant and can have a profound impact on how search results are determined. 

Source: SEJ

Obviously, such a change can impact a blog’s profitability.

It’s not always a bad impact – it can be good too.  But the point is that when you buy a blog, you won’t know in advance whether a future change is going to be harmful or helpful to that blog.

It’s a risk of doing business. 

If the blog’s content is in line with Google’s overall goal of delivering relevant and helpful information to its users, the blog will have a much better chance of gracefully weathering these types of algorithmic changes. 

But if the blog uses questionable backlink tactics or other practices that Google frowns on, there is a much higher chance that a Google update hurts the blog.

Competitive Pressures

The internet is a competitive place.  You are going to be competing against a lot of other sites (both existing and new ones).

That means that your site may lose its current search position in certain areas, which could impact its revenue.

 Again, this is just a reality of the business.

The first thing you can do to protect yourself is to make sure that the seller signs a non-compete agreement with you when you buy the blog.  You certainly don’t want the seller to turn around and immediately create a competitor site to yours.

You can also try to protect your bottom line by writing more articles or improving the quality of your existing articles.  All of the growth strategies I discussed earlier can be used to protect against any losses you might experience from competitive pressures.

Mismanagement of Blog

You could harm the revenue of your site by mismanaging it.  Often a new owner of a blog wants to improve a blog’s operations or profitability.

That is completely understandable.  But in the process of doing that, you don’t want to undermine some of the good things that the site has in place. 

For example, you don’t want to start engaging in questionable SEO tactics or other aggressive practices that could turn around and bite you. You may see a temporary bump, but it may not be the best long-term strategy.

Or you could neglect certain key functions that the old owner used to perform (either themselves or outsourced through assistants), such as social media activity that drove some of the traffic.

Monetization Channels May Change or Go Away

Your monetization channels may change and these changes can affect your revenue.

We already talked about google algorithmic updates that could impact your ad network revenues.

But changes to affiliate marketing programs could also impact your income. 

For example, let's say a lot of your money comes from affiliated marketing commissions.  You have a great affiliate marketing partner and most of your articles are written to drive traffic to that partner.  

But if that partner goes under, your blog could be in a really bad spot.  The same thing holds if the product is discontinued or even if the partner reduces the amount of commission it will pay for the traffic you drive to them.

Some sites are engineered to promote a specific product or company, so you should be mindful of this issue when buying.  Consider buying a site that has diverse monetization channels and doesn't rely too much on a single source of revenue.

Conclusion

Buying a blog can be a massively profitable and passive investment if done correctly, but there are a lot of risks you need to consider and address if you want to be successful with this strategy.

One of the best ways to protect yourself is to start a blog yourself and learn the business.  There is no better instructor than first-hand experience.  There are a million little things you will learn doing this that you will never learn any other way.

You won't eliminate all risk by taking these steps, but you will be much better-positioned to avoid many of the biggest pitfalls.  

If you are interested in learning more about starting a blog, check out my article on passive income blogging.  I give detailed step-by-step instructions on how to set up your blog, position it for success, and structure it to generate passive income.  

If you want to learn more about other types of money-making opportunities, check out my series on starting a business or my series on passive income streams.  Also, if you want other great passive income ideas that may be less risky, check out my article on 15 ways to make truly passive income with no money.

Young M.

Young M.

Young is a lawyer working in the financial services industry and writes about real estate investing, personal finance, passive income, and starting businesses. He owns and manages 9 rental properties, has started several businesses, and enjoys learning about financial matters, especially anything off the beaten path.

Start a Business
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