Traders like you know what investing in stocks means when it comes to the risk of losing money. With every trade you are willing to take the risk. I was wondering what the risk would be when investing in domain names. With the Internet getting bigger every day, domain names have now become a commodity, and for investors who are willing to take on the risks, they have great potential. Some investors think the best opportunities to reap millions buying and selling domain names are yet to come. Others think the gold rush is over..
Whether I should think of a domain name myself (cheap) or buy it from a domain name broker (not so cheap). This is a brief overview of my research. Visit my site for a more detailed report on this research, the link is at the end of this article. You can also sign up to receive the latest reports, news and investing tips.
Good domains make great domain investments!
If you invest in a nice house and hold it until there is a high market demand for it you can make a nice profit on that piece of real estate. The same is true with investing in domain names, however the profit is actuallu much higher compared to real estate.
Take a look at this list of the most expensive domain names, non-adult:
- Insure.com – $ 16,000,000 in 2009
- Fund.com – $ 15,000,000 in 2008
- Fb.com – $ 8,500,00 in 2010
- Business.com – $ 7,500,000 in 1999
- Diamond.com – $ 7,500,000 in 2006
Are these figures blowing your mind? Imagine YOU being the first owner and having it bought for just $10! Investing in domain names will almost never be this lucrative..
Nowadays a domain name is more than just a way for someone to visit a website. It is the foundation for your entire site’s brand!
8 Reasons for Investing in Domain Names
Comparing the domain name business with stock trading and real estate investing gives us a wonderful overview of the advantages. In de following infographic by John Romano the differences are made visible.
As the infographic makes clear, the investment costs for domain names are much less and has no overhead costs besides the annual renewal. Choosing the right registrar means you have no transaction costs when changing owner.
Domain names can be purchased for a few bucks and often parked on a web host for free. But when you read the 10 tips for investing in domain names you will find number 9 interesting. It is better to some webspace hosted for you domain. Maybe redirect several domains to one webhost?
How to make money with investing in domain names
There are different type domain names available to buy: .com, .org and .net are the highest ranked domains. These so called top level domains are the most stable investments as their value go up and down with the financial market. The second type of TLD’s are country codes: .nl, .de and .co.uk are examples. Country codes are also a good investment but it is wise to buy these domains corresponding the country you live in as you know that market best.
.Com is still king of the domain names hill. Cars.com would sell for millions, but cars.net wouldn’t. The shorter the domain name is, the more value is has. I have tested 6000 short words in a bulk domain checking tool and none of them were free to register. These were dictionary words and putting time in checking them is a waste. Domain investing for-profit is a profession. This person’s blog is about investing in domain names and he does that full time. How much we he make a year?
3 Ways of investing in domain names
There are three ways of making money in the investing in domain names business:
- Search for a free domain name and register that one as fast as you can. Sell it to the highest bidder;
- Buy a domain name from the current owner with the intention to resell it;
- Buy a domain name using the options 1 or 2 and make money under a lease construction.
You first step should be to determine how you are able to earn money with the domain you are willing to invest in when your goal is to sell it in a short period. So draw yourself a shortlist of names that you are absolutely certain would have a high resale value by next year.
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How to find valuable domain names
This is not easy. You have to do research on topics first. Being a stock trader might help, you probably know what the emerging stocks are going to be. Narrow that down to the specific market and to a top 5 keywords related to that market. Start looking for the availability of the .com tld and register if they are available. When none of your top 5 keyword are available, determine the value for today and the value for next year. Is it worth to buy it from the current owner?
Recently I registered the domain name bytesexual.com. According to Dictionary.com this is an existing word, but slang. When trying to google it this word is not known worldwide, there are only 6 hits in the results matching the exact word.
In fact, the meaning of `bytesexual` is very technical and not for everyone to understand. I think the new owner is even able to redefine the meaning of the word because of that! Do you think that bytesexual.com is a good example of investing in domain names? I have bought it for just € 10,95.
10 Tips for investing in domain names
- Attempt to predict the future – Find keywords by thinking outside of the box: education and technology, information syndication, social networking, etc. related words are probably free to register)
- Stick with .com – King of the hill TLD .com has a significantly less risk factor compared to country codes.
- Short and Sweet – Short names sell. Memorability, easy of typing and visual aesthetics plau a big part in domain’s value.
- Brandable – Does your domain name relate well to a certain industry or audience?
- Keep it real – It would be hard to market strange names like ‘google’, ‘tumblr’ and so on.
- Have a buyer in mind – Researching the targeted market will end up with a list of buyers in mind.
- Don’t spend to much – Do your homework. Research the aftermarket and try to find related domains for their value.
- Sell when it’s ripe – Don’t sell your domain to soon. Let it “ripe” this will usually increase the value.
- Develop relevant content – Search engines are key to get traffic to your site. A lot of domain names are hidden because webmasters don’t take steps to publish information.
- Nurture your domain – You can add value to the domain name when it as a high Google Page Rank and high valuable backlinks from other sites.
How much should you spend investing in domain names?
Yes, the domain bytesexual.com has only cost me less than € 11,- and I am sure to multiply this 100,000 times when the time is right. Annual renewal is another € 11,- which is the reason not to put it on auction yet. I am pretty confident the right buyer will contact me within 5 years.
But how much money would be wise investing in domain names? I am afraid I can’t answer this question. It all depends on the current value and the value of the domain name in the (near) future. Buying it for the lowest price possible is obvious. Research related keywords and try to determine the value of these ‘ competitors’. Have they been sold previously? Buying existing domain names from a third party might be the most difficult way of investing in domain names because of this. And if you would like to keep the domain name for a certain time, how much profit do you need at all?
Yes, the domain bytesexual.com has only cost me less than € 11,- and I am sure to multiply this 100,000 times when the time is right. Annual renewal is another € 11,- which is the reason not to put it on auction yet. I am pretty confident the right buyer will contact me within 5 years. Investingin domain names is a great way to earn money with little risk and money.
Investing in domain names with help of these tools
You don’t have to do it on your own. Here I provide you a list of useful tools in finding the right domain name.
- Domain name suggestion tool DomainTools
- Make our own domain name with Nameboy, BustAname, DomainsBot.com
- Find expired domain names with StuckDomains, Dropping.com or ExpiredDomains.net
- Buy premium domains at Sedo.com
Investing in domain names is getting easier when you use these tools to do your research.
Where to registrate a domain name?
Have you tried GoDaddy? I have! Did you know that GoDaddy just released their NEW Website Builder? It’s easier to use, has hundreds of new designs, and you get a free domain with each annual plan. All for just $1.00/mo! Use my referral code WOW354114 at checkout to get 35%* off anything else you buy and I’ll earn store credit! Investing in Domain Names has never been easier! Investing in domain names has never been cheaper!
Investing in Domain Names: Conclusion
The highest return on investing in domain names would be investing in domain names available for registration as we speak. You have to pay less (€ 11,- in my example) and making money is a lot easier compared to the situation where the owner is the one to determine the purpose of the domain name. This method also is the one with the lowest risk.
Before buying a domain name from a third party one should try to determine the value for the future of the investment names. Like stated earlier stock brokers who know the market they invest in very well have a head start when contriving a top 5 with free domain names.
When my research helped you out finding the right domain name to invest in, and you were able to sell this and it made you a millionaire, please contact me to grant me 5% of your profit. I can use it to fund my childre’s college. 🙂
Just click one of the sites to read how you can use them or use the contact form on the top right to contact me. Investing in domain names starts with buying them! Click here for a complete overview of my domain name portfolio with Premium Domain Names