How You Too Can Benefit from These Lucrative Domain Investing Methods

Are you looking for an additional way of making money? Making more money doesn’t mean you need to give up your “day job.”  Whether you work a nine to five job or are a small business owner, this particular idea works for any situation.

What is the idea? It is domain investing. Or another, more descriptive way to look at it is “domain flipping.” I prefer to look at domain investing as a process. It is similar to buying a house that needs some TLC (tender loving care) and to improving the house before selling it.

That said, domain investing is not a push button success. You can’t go out and register a domain that you like and expect to easily become a millionaire by selling it the next day.

That is not to say that making money quickly absolutely cannot happen. But the odds are against you that doing so is that easy. On the other hand, you can do well by carefully implementing certain plans with a solid strategy behind them. For example, check out these successful domain “flips” from the past.

The Strategy

To help make the process easier, we based the following strategy on the investment cousin of domain flipping: real estate investment. There are quite a few similarities between the two. Let’s take a look at them now, via the investment solution site of triple net property.

Location (What Does the Domain Say?)

In real estate, location is almost everything. If you purchase real estate in a slum, the value that you will receive, in flipping it, is a lot lower than if you purchase a fixer-upper in an elite neighborhood.

In the same way, the domain name itself is very key to your ability to flip it for a good return on your investment (ROI). I once accidentally (I wasn’t paying attention) registered the domain, opportunites.com. I thought I had hit the jackpot; after all, it was “opportunities.com.”

However, it was a misspelling. Fortunately, I was able to get $300 out of it, which covered my $10 fee for registering it and then some. I was lucky. If I had been paying more attention, I would not have registered a domain with a misspelling. But, hey, I benefited in the long run.

Asset (What Is the Initial or Potential Value of the Domain?)

“Asset” is related to the previous strategy component, “Location.” You need to look at the domain (including the spelling!) and ask yourself what potential (if any) there is with the registration of that domain. But you also need to evaluate the initial value of the domain.

So the first question is the question of the initial value of the domain “as is.” The second question is the potential value of the domain.

My example of opportunites.com indicates an initial value that does not seem to add up to very much. However, the person investing in the domain might have some inside information. This is not to be confused with “insider information” that violates Securities and Exchange Commission laws in the United States.

The inside information is there might be an investor who is interested in the misspelled domain. If so, there is a future for the potential value of the domain. In that case, investing $10 in the registration of a misspelled domain was the right decision, even if you didn’t know the inside info at the time.

That said, I don’t recommend taking that risk unless there is more of a guarantee on the ROI. If you already have a client interested in the misspelled domain, purchasing it would be worth the risk.

By the way, there are even options to hire agencies to do the initial work/research for you for a fee. One example is wishcanvas.com.

Tenant (What Is Your Plan for the Domain and Is It Lucrative?)

In real estate you want to find the right tenant so you can make money off of monthly income instead of flipping the property. In a similar way, there are other ways to make money off of a domain investment besides selling the domain.

One example is selling the website. However, doing so requires registering the domain and then building the website into a lucrative investment. You’ll need to build traffic, valuable content, and more. Oftentimes, preparing to sell a website also involves hiring an agency that specializes in building sites.

Another tip is to register a domain that was registered a long time ago (like twenty years). Age matters in domain or website flipping. However, in that case, you actually want to purchase the domain from a site like flippa.com so you are obtaining a domain without any interruption in the registration.

When you own a domain that was registered twenty years ago, you know you have one with a consistent registration and no interruption. You might also want to consider flippa.com when the time comes for you to sell your domain or website.

Lease (How Can You Increase Your Profit Margin in the Correct Way?)

You need to make a decision. Are you going to register a potentially new domain and flip it? Or will you opt for a method like the flippa.com site and purchase an existing website, build it, and then flip it?

Either decision works, but consider what you are investing. Also consider what you expect to receive for those efforts, including any work or payment for services. The key is that you want a return on investment.

Obviously, the larger that ROI, the better. But you want to have a plan that at least has a good chance of being failsafe in giving you return for your costs in time and money. Doing your research ahead of time helps to increase that opportunity.

However, if a valuable domain comes your way, sometimes your research time needs to be cut down so you can invest before someone else does. It is all about making the best decision you can in the amount of time you have available.

Ownership (What Are Your Final Plans for the Domain?)

This part of our strategy is a matter of summing up much of what we have already been discussing, especially the previous two sections.

What IS your plan with this domain or website? Don’t feel guilty if your plan is to make something out of the domain for a few years and then sell it. And don’t even worry  about allowing yourself to hold onto it for several years before coming up with a plan. Remember, you can make money with it in other ways (i.e. advertising and building traffic) while you are deciding on that final plan.

Nothing has to be absolutely set in stone from the beginning, but the more that you have a plan/strategy in place, the better.

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Deborah Anderson

Deborah Anderson wears many hats in her addiction to acquiring knowledge. From professional training as a sound engineer at the Los Angeles Film School to graduating summa cum laude in software architecture, and then on to become the director of Information Technology at the high profile Bel Air Investment Advisors, she often comments that she is only just beginning. She enjoys sharing her knowledge discoveries with her readers and is always ready to offer a helping hand.

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