3 Ways a Premium Domain is a Better Investment than Real Estate

Everyone is looking for better ways to grow their money. While real estate has long been a traditional way to increase your wealth, it’s also a great way to lose everything. The web presents lots of opportunities for people to generate income, but few can match to potential returns of investing in premium domains. While the first rule of real estate is “location, location, location”, the most important rule for investing in premium domains is “relevance, relevance, relevance”. Getting involved in premium domains can be better for your wallet than real estate.

One: Lower Barrier to Entry

It takes a lot of time, energy, and money to invest in real estate. It doesn’t matter if your flipping houses or buying rentals, you have to have a lot of money to make money. You also have to know what you are doing. Buy a house in the wrong neighborhood at the wrong time you are looking at financial disaster.

But, when you get involved in the world of premium domains you can start with less than $100 and even buy some of the hottest online domains for a few thousand dollars. This is a lot cheaper than coming up with a down payment for a $300,000 fixer-upper. You also don’t have to be an expert to make a smart investment in domains. You don’t need to understand escrow or property taxes. You just need to know what people are looking for on the web. Luckily, keyword search data is freely available.

Two: Better Source of Cash Flow

Ever see the classic Tom Hanks movie The Money Pit? It’s easy to spend tens of thousands of dollars in real estate before ever making a dime back. When you buy the right domain you can often flip it quickly. Unlike housing, there are always new companies looking for the perfect web domain.

But, much like you can also rent a house instead of flipping it, you can turn your domain into a cash generating website. While your site brings you in money, you are also increasing the value of the domain. Once you can show the site generates consistent traffic there will be a line of other investors and entrepreneurs lined up to take your asset off your hands.

The right domains will always be in demand. Ever heard of 360.com? That domain sold for $17 million in February of this year. Your domain may not fetch that much, but it’s not uncommon to turn a $500 investment into $5,000 or even $50,000. That’s a better return than even the stock market. You also don’t need to worry about all the best sites being taken. Z.com sold for $6.8 million in 2014.

Three: The Market is More Stable

The Great Recession taught investors and consumers many lessons, one of the most painful was, real estate won’t always go up. Real estate in many places still hasn’t recovered from its lofty heights from ten years ago. There are too many variables in the pricing of real estate. Everything from a natural disaster to a factory closing can send prices into a death spiral.

Premium domain names are in demand by definition. Instead of dealing with local or even national economic conditions, the prices of premium domains are competitive globally. Economic trouble in one place will have little effect on the prices of a domain. Because there are only so many domain names available, there will always by an imbalance in the demand for great domain names and the supply available.

Real estate may seem like the sexier investment choice. But, if you really want to grow your money, and you don’t have much to start with, buying premium domains is a great way to become an Internet entrepreneur without risking your life savings.

Why Premium Domains

In the early days of the internet, domain names were fairly easy. There were so many good names still available, but as more and more businesses migrated to the internet, the best names were taken. As the time passed, finding a good domain name to register has become increasingly difficult.

Why is a premium domain name so important? For one thing, a premium domain name can help you get the traffic to your website. If you don't get traffic, you might as well not even have a website. There's no doubt about it, if you want to make money, you need traffic.

A premium domain name can help you to get traffic in a couple of ways. First of all, if your domain name is catchy and easy to remember, that will help people to find your website and to return for future visits. It's also a good idea if your domain name gives some indication of the type of business you have. For example, if you want to have a website that helps people find real estate, it would be a good idea to have a domain name that contained some or all of those words. You might do good with "beachrealestate.com" or something similar.

Again, it's really important to embed keywords about your business into your domain name for good search engine ranking. You'll find that most of the high traffic websites with short, unrelated domain names get their huge amount of traffic thru paid promotional campaigns. They use radio & TV ads, high volume email advertising and other such methods that might be too expensive for a small business just getting started.

A good way to find your premium domain name is to develop a list of keywords that are strongly associated with your business. Write down as many keywords as you can think of, as long as they're on your subject. Once you have your list, you can use one of the several free online tools to help select just the right domain name for your new website.