Investing in Domain Names

People have investments in gold, silver, stocks, bonds, real estate, and race horses.  All come at a high buy in price, and are volatile in nature.  Investing in domains is a safe investment that can be entered at any level of purchase.   Some of the biggest domain sales were started with investments of $10.00.

Domain investing is an attractive way to make money.  Domains can be bought and sold in any currency.   Anyone can own a domain. You can even own a domain anonymously.  Domains can make you passive income, either by being developed, or by parking them, while you are holding them.  There is a burgeoning secondary market for domain names as investors are becoming aware of the potential for huge profits in this sector of the internet.

Although they are issuing new extensions for domain names, seems like daily, there are a few that seem to hold their value best, dot com still being the king.  However, with the investments and development of keyword domains, almost any extension is valuable for search engine ranking.  Dot Com will always garner top dollar, but when investing in the other extensions, the prices will (should) be considerably lower.

So far in 2011, the highest amount reported paid for a domain is $2.6 million for Social.com.  This domain was first registered in 1995 for $100 (this was the going rate for registrations back then).  The owner made a 26000% profit on his investment.  How often does that happen?  1000% profits are not that unusual at all.  Make your domain visibly for sale, and approach end users.  Be reasonable in your expectations, though, million dollar sales are not the norm.

There are many investors that only buy domain names to flip.  They buy them as cheaply as possible and then sell them with a smaller profit margin – just to keep the profits flowing and the domains flipping.  There are many in the industry making a great living doing just this.

When you choose your domains to invest in, think like an investor.  Have a plan.  Your domain needs to make you an income while you’re waiting to sell, or it’s just a liability that costs you each year to register it.  Think about keywords, you can use online tools to find niche keywords that narrow down a product to its specifics.   Don’t forget about trends.  Social Media and cell phone apps are huge right now, and 3D domain names were big about 8 months ago.  Someone created a market for marijuana domains this year by buying up about 300 of them himself, and then publicizing that fact.  The marijuana domain rush was on then. You can think long term with the trends as well, genetic engineering, commercial space flights, wireless anything/everything.   Creating a portfolio of same subject domains can be a smart business decision as you will have a great corner on that market when someone comes ready to buy in.

Domain investing is a seriously enjoyable way to make money on the internet.  If you were lucky enough to be smart enough to register and hold on to some domains from the 90’s and early 2000’s, you may have some hidden gems just waiting to be harvested.  If not, it isn’t too late to stake your claim on some domains that are offered for sale by brokers and individuals who have collected them for you.