Vending Machines Vs Real Estate, Which Is Better?

Today’s topic is going to cover vending machines and what is so attractive about them and how they can help you achieve financial freedom. When looking at vending machines, one of the cool things about them is that compared to the real estate market or other investments, there are a lot of different ways to make money.

Why Vending Machines?

There are very few that allow you to scale a recurring semi-passive income stream like you can with vending. For example, we currently have two real estate properties that are doing well. One of them generates $500 per month in cash flow (after management fees), and the other reduces but doesn’t completely eliminate our housing costs. We now Pay about $1,000/month in housing costs compared to our (current but definitely soon to change) $2,800 mortgage.

We have also started investing in vending machines. These machines range in price from $3000 to $5000, but can be financed, allowing us to scale our business quickly without significant upfront costs.

Vending Machines Vs. Real Estate Startup Costs

If a machine is placed in a good location and generates $450 per month in gross revenue, the financing costs of $150 per month can be covered by the machine’s profits, resulting in a cash flow of $300 per month. Scaling up, 10 machines at this rate would generate $3000 per month in semi-passive income, while 30 machines would generate $9000 per month.

Running the numbers on Vending Machines vs. Real Estate

This means that even if you spend 8 hours per week managing your vending machines, you would be making approximately $2250 per hour. This is much higher than the hourly rate achieved through real estate investments, which require a significant upfront investment and a longer time frame to see returns. Of course, there is a lot of returns you see down the line but all in costs often surpass $15,000-$50,000 from down payments to repairs etc. Yes you can use other peoples money and what have you but per property you might make $300-$700+/month in cash flow but your cash on cash return is likely 10-25%. With Vending machines, year one, assuming the machine is in a good location will see Cash on cash returns of 60%-100%+/month. Therefore, to me, Vending machines make more sense to get a repeatable income stream built up relatively quickly.

Overall, vending machines offer a unique opportunity to generate semi-passive income and achieve financial freedom. With the right strategy and placement, you can quickly scale your business and achieve your financial goals.

Listen to a longer episode through my podcast: https://spotifyanchor-web.app.link/e/R8NLb6z8Ivb

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I’ve gone deeper on the vending side of this comparison since writing this — why I think vending is still one of the most underappreciated business models lays out the cash flow and startup cost case in more detail.