2007-07-16 00:22:19
The Best Real Estate Investment: Domain Names
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You may be reading this and saying to yourself, this guy is crazy. I need a piece of land and a house or apartment in order to consider something a "real estate" investment. It is exactly that kind of closed thinking that will make you miss the boat, and miss out on potentially millions of dollars.
The simple fact of the matter is that domain names as a whole are becoming more valuable on a daily basis. Companies are doing more and more business online, and customers are no longer afraid to give out their credit card numbers online. It is probably safer to buy from Amazon.com than it is to buy from your local grocery store. More and more companies are making the Internet their primary focus for advertising dollars.
The fact of the matter is that *.com is the default domain extension for a company doing business online. When a company is looking to register a domain name, are they really looking to register a *.mobi or even a *.net domain? No way. They want a *.com.
There are millions upon millions of *.com domains out there; but how many good ones are there? Not that many, and this is why values are increasing on a daily basis. The reason why domain names will increase so much in value is because you can buy a domain name no matter which part of the world that you live in. If you were an American and tried to buy a house in Sweden, you would face a bunch of regulatory hurdles, plus you would have maintenance costs, tax costs, etc. With domain names, you can live anywhere in the world and purchase a domain name, and you have basically zero expenses on a yearly basis. You will have to shell out under 10 dollars per year for the domain name, and that's it. To put this into perspective, imagine if there were no restrictions on who could buy real estate in say, Vancouver, BC, Canada. You just send the money and boom, an apartment is yours. No red tape, no headaches. That is what is going on with domain names, and this is the reason why they are increasing in value so quickly.
The other thing is that domain names are so easy to monetize nowadays. Let's take a situation that occurred with us about a month ago. We purchased a domain name for $1000. We figured correctly beforehand that the site could generate us $300 USD per month in revenues immediately, with no work on our part. Just a few clicks and boom, we would be making money. This would be like buying a house for the equivalent of three monthly mortgage payments. Imagine someone offering you a beautiful new house for $5000! These are the kinds of returns that you can see from domain name investments. Three months go by and the domain will have been paid for, and it will be ours, free and clear. Any revenues from that point on will be pure profit, plus any potential money that we can make from any future sale of the domain.
The other point I would like to make is that domain name speculation has not really hit the general public as of yet. Sure, there are thousands of people that accumulate domain names online for purely speculative purposes, but we really haven't seen the general public bite into the investment of domain names are speculative investment vehicles. We haven't seen hedge funds enter the market yet, investing millions of dollars in speculative domain name purchases. We haven't had book appearing in Barnes and Noble on how to properly invest in domain names. Trust me, if domain names keep rising in value the way that they have been, it is only a matter of time before the public starts investing en masse in domain names. People follow the money, and if enough seven figure domain name sales hit the news, people will start catching on soon.
If you purchased a major domain name back in 2003 or 2004, you would have probably enjoyed a 400-500% return on your investment so far. Look at Business.com. People laughed when the domain name was put up for sale for $7 million dollars. Well now the domain name is on the block for $300-$400 million dollars. Domain names such as porn.com are selling for many millions of dollars.
Domain name investment and speculation is here to stay. If you are planning on entering the fray, do your research and try to buy only *.com names. Domain names offer an incredible potential return on your investment, and there are thousands of potential blockbuster purchases out there, just waiting for you to snap up.
Filed under: Making Money Online | General Knowledge
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