There are numerous ways to approach domain name investing, and the particular investment style you pick depends on a number of variables. Domain name investors have seen extraordinary returns over the past several years. With some recent high-profile sales and the resultant coverage in major news publications, the industry is beginning to open to a much larger pool of investors.
In short, your approach to investing in Internet domain names will depend on how you're positioned in terms of:
How much money you have to invest,
Your level of expertise in understanding websites and how to drive traffic to them, or
The amount of time you're willing to invest in reviewing lists of available domain names.
Investing in domain names is extremely accessible. Anyone with a computer and Internet connection can have access to a wide variety of resources-from informational guides and tools, to vast lists of domain names to sift through to find hidden gems.
It takes money, time, and some know-how, but domain name investing has proved to be extremely profitable for many enterprising investors, and the expected growth in the industry shows great promise.
One warning… start slowly. It's easy to get carried away and register 50 or 100 domain names on your first go. Even if purchasing inexpensive domain names, start slowly. Try obtaining a few choice domains and taking them through the process of acquisition, traffic building, and resale. The best way to learn is from research and experience: understand the trends, the mechanics and the market before risking a lot of money.
Three Domain Name Investing Strategies
This article will cover three domain name investing strategies. There are no doubt countless others, which readers should feel free to suggest in the Comments section.
New Domain Registrations
New domain registrations can be fun, but can also be extremely frustrating. It's truly amazing to search for available domain names and see that pretty much anything you can think of has already been thought of (and registered) by someone else already. But every once in a while you get a hit-an available domain name.
The key to new domain name registrations is vision and foresight. Often you can find good domain names in emerging topics or industries. When the Apple iPhone was announced, for example, hundreds of people honed in on iPhone-related domain names. There was one particularly clever individual named Michael Kovatch who registered iPhone.com well before the iPhone was announced because he had been thinking about Internet telephony years earlier. He reportedly cashed in with a $1 million dollar + sale. Foresight and vision can be extremely profitable in the business of domain name investing.
There are also some good domain names still available in less common extensions, like dot-info or dot-tv. While we consider this strategy a bit more risky because of the uncertainty around alternate extensions, there's definitely a market for these extensions, as evidenced by the recent sale of Travel.info for a record $118,000, the highest dot-info domain name sale to date. I've learned the hard way to never underestimate the value of any common word domain name in a high value industry.
It is recommended to diversify among different "asset classes" of domain names, spreading your capital among premium domains, short domains (2-3 character), alternate extension domains, and even some hyphenated two-word domain names.
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