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Here’s some great reasons why I prefer to develop every domain that I invest in.
Parking vs. Developing
I can certainly understand the draw for many to create a large portfolio of parked domains. Who wouldn’t? It requires little more than your checkbook to amass a stockpile of potential, little energy expended, residual income, and it typically makes back your investment, but why sit on a pile of domains for pennies when you could be making 10x the return on each developed domain? It almost seems fiscally irresponsible once you know what you’re missing out on. I hear it over and over again that people park because they don't know how to code, design, or just don't have the time or money to pay someone else to do it. I get it. I realize that those can be legitimate obstacles for some people. Personally, I think it's a cop-out and a negative mindset. They just have to put their mind to it.
There's always a way to schedule at least 30 minutes a day or budget $10 to $50 a month to put towards developing a domain. I think that sometimes an investor just has so many domains in their portfolio that it's overwhelming to even consider developing them all. I get that too. I understand the feeling of that kind of pressure. Like with anything in life though, one step at a time to get the ball rolling and eventually, in a week, month, year, or decade from now an entire portfolio can be developed. Progress is still progress, no matter how long it takes you.
The main reasons why I stopped parking are:
- I made more per click (PPC) when I developed vs. a percentage of a click with a parking company.
- I had more freedom and control over my content and design when developing.
- I boosted the value of my investment as it grew in traffic, revenue, etc.
- I was able to save money each year once my domains were able to pay their own renewal fees.
- I generated profit from my portfolio until the domains and/or websites sold.
- There was no pressure to sell, and I could hold out for the best offer since there were no more yearly costs per domain.
- I was able to be found in search engines when I developed, giving me better reach and potential for visitors.
- I had more control over what type of ads displayed on my pages to avoid any unforeseen UDRP’s.
There’s nothing wrong with quick cash. Especially when I started out, I always liked a quick flip where I could turn a $1 coupon .com investment into $10 to $200 within 24 to 48 hours. Frankly, I find that quick flipping is a good way to get your feet wet until one learns more about the industry and how to assess value. Every quick sale you make puts you one step closer to the actual value with cold hard cash that a buyer places at your feet so that next time, you can start putting fixed prices on similar domains.
The quick flip approach can be a particularly satisfying one, especially if you're a fast cash kind of person. However, 9 out of every 10 times, a quick flip leaves lots of money on the table that you could have put in your pocket. Let's not forget how much time it takes out of each day to keep moving each of your domains in a marketplace. We’re talking about a lot of hours per day. Most investors start to realize that while such a business model might be sustainable, they'll burn themselves out and be investing more time than the money they make. How much is your time worth?
In the end, while certainly more time consuming, developing a domain helps you make more productive use of your time. It also allows you to save time in the long run by never having to list the domain for sale. Not to mention, the revenue it generates every year to pay its own renewals and bring profits while it waits for a buyer to inquire about it. Domains will Increase in value each year as more viewers find and refer them to others.
Think about the long term and possibly diversify a little at first. Start out with a few quick flip investments coupled with a few long-term investments, just be careful while developing that you don't infringe on any trademarks.
Long Hold vs. Developing
Just like with quick flipping, it's beneficial to develop and have your investments paying their own renewal fees and bringing in profit each year. It's great if you can afford to renew undeveloped investments every year and not bat an eyelash. However, you'll have more peace of mind if they pay for themselves.
Many investors I've talked to rebut the thought of developing because they feel like their premium one word .com’s value has already hit seven figures, so why bother? But I say, you already own the domain, so why not take a dive into the deep end of the pool and see if it can swim with the big boys? Developing on a parked investment that already has a phenomenal potential will only better your chances at furthering that value and getting more buyers’ attention.
Don’t let this long hold mentality get in your way. If you’re lucky enough to score a premium domain for your portfolio, developing it could make all the difference. Chances are that if you have such a premium domain that everyone already wants and people talk about, developing it even into a five page mini-site could crank out cash like an ATM machine every month.
There's literally no good reason why an investor shouldn't want to expand on their investments, so that they can profit passively while they wait for the right buyer. They could even have it generate leads for another investment project of theirs. Sometimes one has to sweat a little and dig their heels in before they can find the true potential in an investment. Don’t forget the age old line, “it takes money to make money,” and what better way is there?
Now that you know, there’s no more excuses. It’s time to stop procrastinating and start being productive with your investments. Before you know it, you’ll be telling all your friends to develop, like you’ve been doing it all along. I know I did.