The Similarity Between Domain Names and Real Estate

I come from a real estate/property background. I have been marketing on the web in this field since 2000 and have dealt with many aspects of the business including transactions.

Whilst researching the domain name industry over the past year or so, I began to see a simple pattern relating to domain names, their value and real estate.

So here is my analogy

Buy a plot of land - Buy a domain

Think of a domain name as a plot of land. The value of a plot of land can be measure by a number of variables, but location, location, location is key and planning permission is a must. A plot of land in central London is going to be worth more than the same plot in Leeds (relatively speaking). Buying the right domain name is key to easier success on the web. Domains that get large amounts of type in traffic due to the words within the domain name, already have greater value. Domain names where the words are a traffic rich or profit margin rich businesses, afford greater potential. Remember if you start with a great base, developing the domain will be easier and has great value potential.

Develop your plot of land - Develop your domain

Turning a domain into a website is like developing a house on your plot of land. A plot of land with a house on it, is worth more than the stand alone plot. Assuming you have done your costings correctly, there should be room for a sizeable profit margin. If you build a website on your domain name and use the right setup, marketing and resources, it should have increased in value. The margins in domaining should be high, as costs are relatively low.

Sell or Rent your Home - Sell or Lease your Domain

Selling your domain is like selling your property. Researching the right price, marketing with the right estate agent and presenting your property to it’s full potential will all help in your goal to sell. If you want to sell your domain for the highest price, developing it with a stable traffic stream, a track record of sales and good design, should all work in your favour.

Renting your property can be a great way to make a steady income, while someone pays all your costs. This is called cash flowing property and it means that you have a property whose mortgage, running and maintenance costs are lower than the rent achievable buy leasing it out. It needs to be attractive and be fitted with all the mod cons. To get a domain to a position where a company will pay to lease it, you will need to have a good name ;), a stable traffic stream and stats to back it up.

Leasing domain names I think is in its infancy, but over time as less great domains are available companies will start to look at leasing valuable domains.

So if you own a domain add more value by trying any of the above and increase your online real estate value.