Investing in Domain Names

Before I get into investing in domains, let me take you through a brief intro about domains

What are domains?

In simple terms and to make things clear for the newbies, when you visit a website, the part after the “http://www.” is the domain name.

For example, let’s take this site. Here, Jamshid.co is the domain name.

Classification of domains

The major domain types are:

  • gTLD – Generic Top level Domains – The most popular ones being .com, .net, .org & .info. There are also others such as .mil, .edu, .aero, .pro, .name, .jobs, etc.
  • ccTLD – Country Code Top Level Domains – These are usually specific to countries such as .us for the USA, .uk for the United kingdom, .de for germany, .in for India, .om for Oman and so on.
  • IDN – internationalized Domain Names – These domains are usually country code domains in the official language of the country. Examples include .عمان for Oman and .한국 for Korea

In most cases, .com is undoubtedly the King of Domains. So when you plan to register a domain, check for the .com first.

Investing in domains

Are you aware that sex.com was sold for 13 million dollars, hotels.com for 11 million dollars and fund.com for almost 10 million dollars. I have seen many faces with their jaws dropped when I tell them about this.

So now that you got my attention, let’s get to why should you invest in domains. Here’s why:

  • Very easy entry barrier – you can register a domain for less than $ 15. Do you know of any other investment opportunity which can compare with such a low capital investment?
  • Global buyer potential – suppose you buy a property in your home land, most probably, your target buyers would be locals of that area and very rarely do you get a buyer from outside the country. In the case of domains, the world is your market.
  • Easy to maintain – you don’t have to pay and land holding taxes for maintaining a domain in your name. Usually the cost for renewing a domain name is less than $ 15.
  • Many good domains can be developed into individual businesses
  • You can earn passive income from domain parking and leasing
  • Domains have been giving really good ROI when compared to any other asset class

How to start?

First of all, don’t rush in by going to a domain registrar and trying to buy as many domains as that you can. Take it slowly, first read about domains and understand the business. Here are a list of good websites that you can visit to have a better understanding about the domain name industry:

  • www.domaining.com
  • www.dnjournal.com
  • www.namepros.com
  • www.domainmag.net

Your first domain

To start of, I would suggest that you buy your name as your first domain. In case you become rich and famous (hopefully from domains), this would be a good one to have a blog.

For example, I own jamshid.co (this blog) and nalakath.com (which is my last name)

Domains for investments

Many people say that all the good domains are gone. This may be true, but there are a lot of gems available out there, which you can pick really cheap, if you spend some time and effort. For example, I was able to buy a domain for $10 on eBay and later sell it for $400 in less than 1 week.

Here are three tips when purchasing domains for investments

Try to get generic domains if they are available (especially in your country code). For example, if you can get computers.ae or datasecurity.om that would be great

Try going for Geo + Keyword domains. Examples are DubaiJobs.com, AustinAds.com, IndiaHome.com, JobsinUSA.com and so on.

Setting up online classifieds and directories are good way to make some money from domains, so consider going for domains like CanadaProperties.com, IndiaCars.com, etc.

Discussion

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