Not exactly traditional small businesses, but honestly, both options have much higher probability of success (or at least not losing all of your money like restaurants)
Possibly true anecdote. However with the median family income for the country being $45K or so, thats implying the profit alone exceeds something like 25% of the median tenant gross income. So thats like a $1M CEO waterfront house not joe6pack's house.
Somewhat more realistically, you can expect your average family to spend maybe 1/3 their income on housing, and your profit will probably be a fraction of that, and you'll only have tenants a (large?) fraction of the time, so from a scalability standpoint to earn a median income you probably need to rent out one to two dozen houses, which rapidly becomes a full time job and is quite a capital investment. Also it becomes interesting to express various typical maintenance costs as "months of rental profit" rather than $. A furnace might be more than a years gross profit, yet only guaranteed for 20 years... times ten other major appliances all carefully value engineered to fall apart...
One worrisome part about long term prices is a Z percentile resident will more or less always live in Z percentile housing. Now the capital cost of that housing solely depends on about 1/3 the resident's income put toward the mortgage interest payment... and that rate was at multi-generational lows aka prices were at multi-generational highs. J6P can afford to pay the bank $2K/month means he can borrow how much, depending on interest rate? So what happens to your capital investment when median income inevitably continues its multi-generational decline, while at the same time, interest rates inevitably rise resulting in crashing sale prices? There are other cultural effects like retiring baby boomers wanting to downsize, kids having mortgage sized school loans therefore unable to afford a mortgage, etc.
Just saying, focusing on return OF capital is probably more important than return ON capital, when you're doing long term real estate investment. From a diversification stand point it can work if you have 100 or so houses, but its rough at a smaller scale.
Plus you get people waking you up in the middle of the night when they lock themselves out.
That being said, saving lots of money and living off of dividends is the way to go.
Just be aware that saying used to be 10 year period, until it broke. It hasn't worked in the last decade or so, therefore roughly speaking durations keep expanding to reach the eighties. I suspect in 2030 the phrase will be something like ... never been a 50 year period ...
The part that worries me is hearing about all those boomers having to cash in equities and real estate over the next couple decades to pay off the medical sector... Who, exactly, is supposed to step up and buy that stuff at current prices / PE ratios? AKA where's the demand?
