How Domain Selling is the New Real-Estate Investing
May 14, 2021 5 min read
The opinions expressed by the entrepreneur’s contributors are their own.
During the pandemic, Netflix’s Selling Sunset grew in popularity, showcasing the glorified world of real estate. Millions of quarantined viewers tuned in to escape their homes and view the Oppenheim Group’s luxurious LA offerings. While the show helped cure home boredom, it perpetuated a distorted view of real estate success. Real estate that is not exempt from volatility can be a riskier investment than the media portrayed.
As real estate continues to fluctuate, there is one investment trend that has remained undisturbed during the past pandemic and recessions: domain investments. If approached with strategy and vision, you could land yourself in the next $ 40 million domain. Here are some key reasons domain investments are on the rise.
The goal of real estate is to buy cheap and sell high. But with extremely high costs, upfront costs, and tremendous effort, the return on investment is often not as compelling as reality television would lead viewers to believe. However, when done correctly, domain investments can be a relatively inexpensive, low-maintenance investment. By buying multiple domains, the investor diversifies his portfolio and increases the potential profit. Since the price starts relatively low depending on the desirability of the domain, this investment strategy is also more accessible than traditional real estate investments. A strategic purchase allows domain investors to acquire a domain that will increase in value over time.
Some of the most successful publicly reported domain sales are:
- Insurance.com – $ 34 million
- Voice.com – $ 30 million
- Hotels.com – $ 11 million
- We.com – $ 8 million
- Beer.com – $ 7 million
A 90210 domain with a budget of 91201
What makes domain investments worthwhile is the opportunity to acquire a high quality domain that will ultimately pay off as a Beverly Hills home. In general, the return is much higher when investing in better quality domains. However, just like with real estate, blocking these domains requires strategy and foresight. Almost all of the high-quality names like the ones listed, especially those that make six-figure returns, are already taken. Hence, you will likely need to purchase them through wholesale channels, e.g. B. a GoDaddy auction, from other investors. For many domain investors, it is beneficial to use a wholesale platform where they can easily liquidate domains at a fraction of the retail price to recoup their investments. Investors can also wait for names to expire (or be deleted) if the current owner does not renew them. If so, you may be able to get them at a better price from expired domain auctions.
Related: Start Your Home Business With a .store Domain
It took just a few months and a global pandemic to make working from home a cultural norm. Google and Indeed have expanded their home work guidelines, while Microsoft has given some employees the option to work from home indefinitely. Work isn’t the only place a digital switch is made. Virtual baby showers and streaming DJ sets in the living room are becoming increasingly popular and are giving the digital economy a second wind. Health concerns initially forced many to go digital, but now it seems that Virtual will stay here. As the infrastructure and range of digital connectivity increases, so does our digital economy, even in a post-Covid world. While the pandemic fed the digital economy, it also created uncertainty about real estate investment opportunities.
Related: How to Negotiate the Price of an Expensive Premium Domain
The public flocked to Netflix and TikTok because of the boredom of the pandemic. Boredom also sparked a wave of new hobbies, including bread-making, knitting, and gardening. Microtrends include the growth of creative investment opportunities.
Real estate investing does not offer an opportunity to individuals who yearn to be creative. Many are turning to domain investments to encourage creativity. While LasVegas.com can be used, there are inventive ways to get a high quality domain. Compound names, transmutations, mixed names, and alternative extensions are all tactics for getting a premium domain within budget. Domain investments require a flair for names that make a brand stronger. Without that creativity and talent, you may not be able to invest in names that work.
Don’t miss out on the risk
As with many speculative investments, investing in domains also carries its own risks. It may take up to a hundred names to invest in to sell two or three. This means that you should consider the additional costs involved in building and diversifying your domain portfolio. In addition, you may need to hold your domains for several years. You will have to pay renewal costs of approximately USD 10 per domain per year. If you have thousands of domains, these costs can add up.
Finally, it’s important to stay away from brand names. You shouldn’t knowingly invest in names that are branded by other companies in the hopes that the company that owns the brand will eventually buy them. This type of exercise is known as cyber squatting. Not only is it unethical, but it can get you into legal or financial trouble.
Massive unemployment, job insecurity and wage cuts have impacted real estate growth throughout history. However, as digitization progresses, the need for original domain names grows to accommodate new ideas and companies. So the next time you think about scrolling through Zillow, you can scroll through Domain Auctions instead.
Related Topics: How to Navigate Domain Name Disputes