Domain name investing is the practice where eligible businesses and people, typically domainers, buy a domain name with the intent to make a profit from, or monetise it. Purchases are usually made via auction, catalogue, or private negotiation.

Domainers typically achieve monetisation by either: parking the name and generating income; selling it for a profit; or developing the website to boost the domain’s value. As such, because domain names operate as website addresses, they represent the property market of the internet. If you’re not convinced, consider cars.com.au which sold for a lazy $1.6M, or investmentproperty.com.au which landed $137,500 back in 2011 when Netfleet was involved with the sale.

What domains do domainers typically look for? Usually, a name with great features, notable web traffic, and high demand. Domainers sometimes even generate income by parking their site and leasing advertising space through it. Who said properties were the only assets that could be leased to tenants?

While in the early days of domain name investing domainers found it easier to secure a highly sought after domain, or to make a quick buck by flipping good (and bad) domains, there is now a far greater level of judgement required to make a sound investment. Some domainers have still been able to make a quick buck by catching onto a domain before a growing trend or major news event, however, this requires more than its share of good fortune.

Developing a website is another method which domainers seek to generate a return, albeit is the least common method. Domainers opt for this approach when also using the domain for specific projects or short term business pursuits. Pages with quality content and backlinks are often regarded key factors behind visitor numbers and domain name values.

When making a domain name investment, the factors to consider are likely to differ from those thought of by an end user when choosing their domain name. And as always, one should seek advice from a registered professional with regards to their own circumstances.

Generally speaking however, some domainers opt to purchase a domain without regard for the meaning of the name or any keywords used – instead, focusing on its search engine popularity – or, they sometimes apply foresight towards how memorable and authoritative the name is, as well as how it can be branded by an end user. Domain name investing isn’t without risk either. After all, judging domains is subjective, while cash flow is dependent upon the liquidity of a name – something that varies considerably.

That’s it for this occasion. If you have any questions, don’t hesitate to contact us.

Best wishes,
The Netfleet Team

http://www.netfleet.com.au

This information on this website is for general information purposes only. It is not intended as financial or investment advice and should not be construed or relied on as such. Before making any commitment of a financial nature you should seek advice from a qualified and registered financial or investment adviser. No material contained within this website should be construed or relied upon as providing recommendations in relation to any financial product.