What You Need to Know About Domain Name Investing

Make money from domain name speculation.

If you have ever thought of purchasing domain names for investment, you are not alone. If you get the formula right, you should see a wide swath of profits. Over 128 million domain names are currently registered. The first domain name, Symbolics.com was registered in 1985. The industry has come a long way since then. Imagine, in 1984, Joshua Quittner who was a writer for WIRED asked McDonald’s if they wanted to register mcdonalds.com, and they declined.

Today, almost everyone who runs an online site has had the experience of registering a dot-com domain name. Any, many times, the first choice is often already taken. Domain name investing is popular for people of all backgrounds. Some members of a Middle Eastern royal family own one of the largest portfolios in the world. Many companies such as Amazon and Salesforce have purchased domain names that are still not in use. GoDaddy even spent over $100 million purchasing premium domain names for private owners.

Stay focused

If you want to find the next great domain name, you need to truly refine your search. As stated above, there are millions of domain names already registered. If you are just starting out, you probably won’t find the top domain names on your list. Remember, there are thousands of people—and large companies—buying domain names every day. This is a serious industry. Yet, don’t have to be a billionaire to get started—that is the good news.

What you must do is narrow your focus. What types of domain names do you think will be used more frequently in the future? Think of today’s trends and how they will shape future trends. Plus, your domain name does not need to end in .com, according to Nominus, it can end in a variety of extensions such as .TV or .club and be quite successful.

It is important to remain flexible when you get into your first domain name hunt. And, remember, domain name investing is not a get-rich-quick scheme. You must be in it for the long haul. It may happen that one of your domain names becomes a golden egg 10 years from now. Can you wait that long?

Look for potentially valuable domain names

You can’t search for random domain names that suit your fancy at the moment. Think of relevant keywords and anything users might type in a search engine when looking for a business that might use your desired domain name. Get specific. How many backlinks can be attached to the domain name of your preference? If you have a WordPress feed, you can learn how to transfer them to a sub-domain here.

Keep it short

If you can find a good, one-word English domain name, then you are one to something. Domain names are much more valuable when they are short, easy to type and easy to remember. Visitors are not going to waste their time typing hyphens or remembering long domain names.

Look for real words that can be used by a wide swath of companies. If your first choice is taken in the .com version, try a different extension. Some of the most valuable one-word English domain names were created before the year 2000. This will take time to find. And, if you find a few for sale, it is important to consider your budget.

Investing with your IRA or 401(k)

You have unlimited options when it comes to investing with your retirement account. This is something you may want to consider since you get preferential tax treatment while the funds are still in your accounts. As a result, you might get tax-deferred or tax-free income as the value of your investment continues to grow. Although, you will have to use a self-directed IRA custodian who allows alternative investments.

If you have a comfortable retirement nest egg, but want to take it to the next level, you might consider investing in domain names. Still, speak to your financial advisor before you use your retirement account for domain name investing. You want to ensure you do everything legally and by the book.

Take your time into account

Domain name investing takes a lot of time. For many people, this is a full-time job. You have to sort through the names and look for the best deals. Then, you must keep up with the latest trends and pricing structures. After that, you need to reach out to the domain name owners. When you calculate the growth of your investments, do you also take into account how much time you spent searching for that domain name? This is about opportunity cost. If you’re using it for starting a new blog, then consider how relevant the domain name will be to your site.

If you want an alternative source of income, then you might consider domain name investing. Of course, it takes time and learning to understand how to choose the best domain names—at the right price—which will eventually make you a good ROI. Not to mention, sorting through thousands of names is not for the faint of heart. If it is something you want to do, make sure you enjoy it.

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Author: Katrina Manning

Katrina Manning is a published author, editor and content marketer for BuildNicheLinks. With over eight years of career writing experience, she specializes in business, tech, lifestyle and digital marketing. Her favorite aspect of writing is the opportunity for constant learning. In her free time, she plays with her pets, volunteers and scours Instagram.

This entry was posted on Monday, May 1st, 2017 at 4:19 pm. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.

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