Domain Investing

[MaxS]

Have any of you invested a significant amount of money in domains?

I've been thinking about it. In my honest opinion, it's a very solid investment considering the exponential increase in value of premium domains.

Picking up a few generic .com/.net/.org domains doesn't seem like such a bad idea, considering I have no problem waiting 5 or more years to reap the benefits.

Better than money in the bank, don't you think?

[paul]

I have more than I probably need, but somehow they keep accumulating :)

The problem I have is that word "premium" is VERY slippery. One guys premium looks like the other guys trash. I look though the sale prices for recent domain sales and, with the exception of one word or two letter type domains, can't see a pattern that makes sense to me.

I think a few people will make a lot of money buying and selling names and a lot of others will loose. (Of course that's how investing always goes.)

[Chris]

Maybe, maybe not. In a way they can be overvalued at times. I would only do it if you have an idea for a money making site to go with it so you know you can eventually make it back even if you don't resell the domain.

The most I'd paid for one is 4 grand, and I've only every spent more than 1 grand on like 3 or 4.

[Kyle]

Domain investing is growing, but it takes a lot of experience in making the right choices.

Unless of course you can afford the generic .coms in the 6 and 7 figure range, where value is usually obvious... making the right choices takes a lot of experience. I rarely deal in domains that receive type-ins, because these too have obvious long term value... which means more competition among buyers (which i don't like dealing with).

I have bought and sold around 200 domains since 2002. These include the obviously valuable ones like lighters dot net, motorcycleboots dot com, and less obvious ones like Starcraft2Forum and Starcraft2Forums dot com. I bought Starcraft2Forum dot com and Starcraft2Forums dot com around a year before the title was anounced for only $8 each. Sold them recently for low $x,xxx.

I like using real world examples, so lets take NewYorkDiamonds.com. The value here is obvious. Extremely brandable for a New York based jewelry store. BuyDomains.com is asking $5,000 for this domain. Is this high? Maybe, maybe not. You could probably negotiate this down to $4,000... Then you could contact all the jewelry stores in New York asking for $20,000 (initial asking price).

OR.. The best thing to do is to just hold on to the domain. Wait for the buyer to find you. That is where the real money is. That is where a domain that is worth $0 to most people suddenly becomes a $15,000 sale.

[Kyle]

omfg... i said obvious way too many times above, whats wrong with me.

[Blue Cat Buxton]

omfg... i said obvious way too many times above, whats wrong with me.
I would have thought that was obvious :lol:

[Cutter]

As long as you can buy a domain name cheaply enough its a great way to invest/make money. If you already have a background in the niche the name is for, even better. This is an active investment which requires a lot of time and effort to find the good deals -- not a mutual fund where you deposit some money and walk away.

[BGray]

It's become a very tough biz over the past year as several multi-million dollar investing firms are buying names up left and right.

Premium isn't a hard to define as most people think, it's just used incorrectly so often.

The real money is basically in finite acronym names like 2 and 3 letter .coms and pure generic keyword doains.

The acronym names have a fairly strong floor value which is probably the safest way to go. Unlike most domain names these are quite liquid and have risen in value at an incredible rate of the past few years.

The other names are pure generic keyword domains. The value of these is typically based on PPC parking revenue. A generic keyword domain with pure type-in traffic is going at rates of 10-12 years revenue right now.
Of course if the keyword is a product or industry there could be much more value with end user corporations.

I've been in the domaining game since '02 and just really figured it out last year. It took a lot of poor choices for the light to finally come on. ;)

The window isn't completely closed on making big returns but it's shut quite a bit over the past 12-18 months.

Hope that helps. ;)