10 years ago investing131Jake

The Basics of Domain Investing

Have you heard the term domainer?

While thousands of bloggers and forums pollute the Web with “make money online”, there are people who actually make a lot of it without spreading affiliate checks on blogs. Such people don’t even have blogs. They don’t work online to make money, they invest in the web for profits that most people will never see.

Domainer schema
Picture by Queen Coffee at Flickr

The domainers own, buy, sell, develop, rent or register hundreds, thousands or hundreds of thousands of domains. Note that I am not saying websites, because pretty often there is nothing on these domains except ads or capture pages.

How Does It Work

I believe it became clear, but I’ll say it again. Domain investing is different than typical “make money online” business. There are thousands of guides out there who claim to teach you how to make money on Internet. Most of that advice is full of crap, some is good, but in both cases it’s not interesting for us. Because it requires work.

Domain investing on the other hand is semi-active investment strategy much closer to stock trading or real estate investing. You have heard about internet real estate, haven’t you? Domains are the internet real estate and investing in them works in a similar way. You buy, sell, rent, trade or hold for profits.

Types Of Domain Investing

Like the real world properties domains can bring residual income and at the same time grow in value. Domains are even better than real estate because they don’t amortize with the time. The search engines love older domains, so the older your domain becomes, the better.
You can consider the following options to invest in domains:

  • Trade domain names. Find good domain names sold for cheap and sell them on better price. There are undervalued domains out there, but you will rarely find them on domain marketplaces.
  • Buy and hold (park). Most domainers hold hundreds of thousands of domain names. They simply place PPC ads on the (Adsense or affiliatre ads), and collect the profits. The key here is that the domain name needs to attract incoming traffic.
  • Buy and develop. A smarter but a lot more involved strategy is to buy good old brandable or keyword rich domains and to develop sites on them. Developing sites sounds like work, but if you outsource, it is not.
  • Buy entire websites. Some domainers buy existing websites with traffic and revenue to run or resell them. Trading a website is like trading a business.
  • Register free domains to resell, hold/park or develop. A new domain name costs less than $10. If you are able to find good domain names and register them, you can sell them later for much bigger price. Alternatively you can hold them or develop sites on them

I didn’t give you much details on the strategies above, because each of them needs a separate blog post. And you guessed it, such articles will come soon. If you don’t want to miss them, make sure to subscribe by email or RSS.

For now you can continue reading with the next article – How to find domain investing deals.