I have 2 sites that need SEO. Site 1 - highly competitive market but an evergreen market (web hosting reviews) - high return but very difficult to break into. Future seems stable but not gorwing. Site 2 - very low competition but an undeveloped market. Easy penetration and real easy to get to #1 on keywords etc...potentially low return but it is a growing market. If you had to choose to between ONLY ONE to spend on quality, white hat, aggressive SEO - which would you choose?
I'll choose Site 1. Site 1 is the one that need lots of efforts to exert. It maybe difficult but in time, it'll surely be paid off.
By the sound of things Site 2 will definitely give you some return - even though its low. Site 1 MAY give you some or no return at all. It depends on your needs and where you are at the moment. Me, I prefer certainty and would go for Site 2. But like I say, what are your needs right now?
This is so subjective as to almost be imposible to answer in terms of which is "better". If you are a gambler you are going with 2 if you are not you are going with 1.
Neither - I would find a third niche, which is easy to dominate, evergreen and pays good returns today. Instead of spending time trying to rank for a highly competitive term and not knowing when you will get paid or ranking for something that isn't paying. These two options are basically the same - not getting paid. If you are in this as a 'hobby' than go for either. If you are looking to make this a business, than business is the name of making money and providing value. Find a third niche, it is actually easy enough.