ATTN REGISTRARS! it.com domain sunrise starts on Jan 2nd! GET READY NOW

Domaining vs Investing

Catch.Club

mh231

New Member
Impact
48
Hello everyone! I'm new here but I've been kicking the domining can down the road for a better part of a month now in terms of research and self education.

I'm an investor. We own storage facilities, businesses, commercial/residential real estate. I have experience in web development and basic programming.

The more I read, the more domaining seems less like investing and more like gambling. The whole hand registering seems like trying to find a needle in a haystack. I keep reading that most new folks to domining will never be able to sell their hand registered domains etc. I understand there's learning curves and in order to learn, generally you have to spend/lose $$$.

Another thing I've noticed is many, many, many folks trying to get into this have no budget and are trying to find the quickest way possible to make money and want to spend as little as possible.

I guess what I'm trying to say...is there a difference in HOW I should move forward with educating myself on domining? I'm not particularly interested in hand registering domains and trying to find one that's worth a few hundred bucks...but I understand that perhaps that's recommended for someone who Is new to this.

In investing we mostly talk about cap rates, interest and ROI. I can generally run figures and produce a rough expected ROI. I'm struggling to find out how to do this with domaining.

Maybe I'm just too new, maybe I need to slow down, maybe I don't even belong here because domaining is not for me. I'm absolutely not looking for another job or a side hustle...I'm looking for a passive/semi passive investment strategy to add to my portfolio. I have a good budget. Our average RE returns are 8-15% but I don't even know how to begin to calculate a projected roi with domains if say I invest $25k.

You other investors, what strategy did you follow when it comes to domaining?

I'm open to criticism, opinions, suggestions, education resources...anything really.
 
17
•••
The views expressed on this page by users and staff are their own, not those of NamePros.

jhm

Top Member
Impact
11,590
Domaining compared to a lot of other businesses is much more on the speculative end. Often hard pinning any kind of numbers / definitive ROI...to a good extent its a waiting game

The beginners section at NamePros is helpful...scroll and read. With a $25k budget, what I will say is that gives you a good leg up to buy quality, when you do so. IMO
 
Last edited:
9
•••

twiki

Top Member
Impact
24,252
It's gambling for the inexperienced, or those dipping a toe.

It's investing for those with years behind it, a neat portfolio and a solid budget. With consistent Y2Y profit % = definitely NOT gambling.

Math is not that great as many expect at first... unless you become a top investor. With $25k total and a good hand /experience, on average assuming low to mid xxxx range sales and the usual 1...2% sales ratio per annum, you might make $10-$15 k profit per year.

You need 6-fig investment in order to make significant money with this. Or mid-5fig but a ton of great experience.

It's far harder to enter in comparison with other fields. Don't underestimate the learning curve. Also this is probably NOT the best time to start, since sales are going down (edit: and will continue to do so.) But rather the time to buy serious names and wait a few years, which presumes you have the experience already, otherwise chances are you'll buy overpriced or bad domains.

Note: I netted $14K in loss in my first year in this, and also a small loss in the second year.
 
Last edited:
11
•••
Impact
47,175
Hello everyone! I'm new here but I've been kicking the domining can down the road for a better part of a month now in terms of research and self education.

I'm an investor. We own storage facilities, businesses, commercial/residential real estate. I have experience in web development and basic programming.

The more I read, the more domaining seems less like investing and more like gambling. The whole hand registering seems like trying to find a needle in a haystack. I keep reading that most new folks to domining will never be able to sell their hand registered domains etc. I understand there's learning curves and in order to learn, generally you have to spend/lose $$$.

Another thing I've noticed is many, many, many folks trying to get into this have no budget and are trying to find the quickest way possible to make money and want to spend as little as possible.

I guess what I'm trying to say...is there a difference in HOW I should move forward with educating myself on domining? I'm not particularly interested in hand registering domains and trying to find one that's worth a few hundred bucks...but I understand that perhaps that's recommended for someone who Is new to this.

In investing we mostly talk about cap rates, interest and ROI. I can generally run figures and produce a rough expected ROI. I'm struggling to find out how to do this with domaining.

Maybe I'm just too new, maybe I need to slow down, maybe I don't even belong here because domaining is not for me. I'm absolutely not looking for another job or a side hustle...I'm looking for a passive/semi passive investment strategy to add to my portfolio. I have a good budget. Our average RE returns are 8-15% but I don't even know how to begin to calculate a projected roi with domains if say I invest $25k.

You other investors, what strategy did you follow when it comes to domaining?

I'm open to criticism, opinions, suggestions, education resources...anything really.
You seem to have a pretty good grasp of it.

There are 170+ million registered .COM. To expect to hand register much of value is relatively unrealistic.
The only exception is really in trending fields, but even then the vast majority of registrations are of low quality.

In my opinion the way to make money is to make quality aftermarket purchases, but to do this you need some starting capital to overcome the low end user sell-through rates.

From my experience the vast majority of people in the field will not make money, and end up moving on.

It takes the right mix of a lot of different skills and traits to build a sustainable business in this field.

Brad
 
15
•••

yandig

Say DomainsTop Member
Impact
425
It depends what your definition of 'semi-passive' is.

I would advise anyone looking to get into domaining to have a clear concept of how they plan to sell their domains once they acquire them. Just listing them in a marketplace like Sedo, Dan, etc...is probably not the best use of your time/funds. How much time and effort are you willing to spend to turn a decent profit?

That's a question only you can answer. Good luck!
 
Last edited:
3
•••

VadimK

Top Member
Impact
3,354
Three things to understand:

1. One of the key differences between ''regular'' (whatever it means!) investing and domaining is the level of involvement. In order to understand where to invest you really need to spend hundreds and even thousands of hours getting the game. If you don't have such time - better stay with a more traditional model in the areas where it's relatively easy and fast to understand ROI and risks.

2. This one is kind of a variation of point 1) - but it's more about your personality. A domainer is a person who doesn't mind spending many hours of his life (or a certain period of it) behind the computer. Obviously if you are already into many different projects, things, hobbies, occupations or simply need many different people in your life - you'll get bored pretty fast scrolling through and comparing thousands of names...

3. Obviously there are people here who will tell you: ''don't you worry man, go to DropCatch, buy everything above $500 with certain estimation of GoDaddy and certain tld number taken - and you are good!''. But you know what? You still won't be able to calculate ROI nor to understand when, how, why (and if!) your return will be happening. Stay away from such type of advice. It will decimate your budget fast without any predictable results still.

Hope that helps to make a decision, good luck!
 
17
•••
I'm an investor. We own storage facilities, businesses, commercial/residential real estate. I have experience in web development and basic programming.
Your experience in RE should be helpful to you, domain names used for commercial purposes are essentially commercial "internet" land. Build or buy a site on that land and you have commercial "internet" RE. Cap rates, interest and ROI will be hard to find as "internet" land/RE is still a relatively young industry (at least compared to brick and mortar) but you can use that to your advantage. If it were more transparent, there would be much more competition.
 
5
•••

biggie

GreenFriendly.comTop Member
Impact
15,019
Hi

try to buy an income stream, like some type-in traffic domains that are currently earning revenue.
or as Brad mentioned, bid in the aftermarket.

but with either, you'll have to know the good from the bad and be willing to make a few mistakes along the way.

and turn your "common sense" level up to "high".

imo...
 
7
•••
Impact
7,406
Everything is a gamble. Your businesses regardless if you started it or purchased it from someone else, was a gamble. Even if you are given a 500 billion dollar business for free it's a gamble. You might walk into the business one day and fall down a shaft and get killed.

In Poker, everyone at the table is gambling even the guy that was dealt A-A. The person next to him that was dealt 2-7 can go all in pre-flop and he could win, but the person with the AA has a better chance.

You could make money from handregging a 25 character .net with a hyphen and a number in the name but it's not likely.

It is possible to start a business with 5 dollars and turn it into a million dollar company, but it's not likely.

It is possible to buy a penny stock and make a lot of money but it's not likely.

Domaining like every industry will cause people that get involved in it to lose their money. Rarely do newbies want to hear the truth about this business and they will get the truth delivered to them one day but they will be a lot poorer.

Even if you follow all the right steps in any business, you can still lose your money, the same in domaining.

If someone has 1000 dollars and they want to invest in domains even knowing the risks, and they want to increase their chances of making money they need to find names that are taken and are for sale.

You could find good names on namepros itself but you will have to look a few times a day for many months to possibly see one good name worth the asking price and usually if it's real good by the time you post to buy it someone already got it.

You could find good names on expiring marketplaces and delete lists. If they have no bidders, it's usually not that good of a name. Most people will say "well, my biggest sale was a closeout auction purchase for 5 dollars". Yes, even degenerate gamblers do get lucky sometimes. You know what happens next? They try to chase that luck and give back all their winnings.

What is a good name? If there was a simple answer we would all be happier.

If someone has money to invest and they don't intend to use the name for their own project, buying a domain is one of the riskiest investments you could make, probably buying terra coin has a better chance of giving you gains, and I do not suggest you buy that.

At the same time, if someone has an idea and they don't invest in the best name they could afford, they are big fools.

For the amount of work needed to possibly make any money domaining, you could do 100's of other things for less money and all will have a higher chance of making you money.

Every industry has a few lucky winners. Most people will lose money on every investment they make it life. Become a master of finding ways to lose the least and you might make a profit one day.

If you are a gambler and know all the risks and don't care. Domaining can be a fun costly hobby but it beats a lot of other hobbies that are more likely to kill you.

Sorry for this depressing post but I recently invested in a pharmaceutical penny stock, they sell anti depressants, I figure the more depressed I can get people, the higher the chance their $0.000000023 stock can go.
 
Last edited:
18
•••

Tommys Domains

Upgraded Member
Impact
47
Too many people see domain sales and then rush into it without doing any research.

I have done it myself. I have been buying domains for the last year. I think the first 100 domains I bought were absolute trash and I can' t wait for them to be out of my portfolio. Over time I have read hours and hours of threads, books and articles about domains and only now am I starting to learn what makes a good domain and its potential long term.

I don't think you should rush into it and spend a lot of money. Only spend what you can afford.

What I have grown to love about domaining is the joy of finding a new niche, a new name, a golden nugget in expireddomains.net. There are tons of reasons I love it.

I don't take it too seriously. I buy my domains, list them and then forget about them!
 
18
•••

twiki

Top Member
Impact
24,252
Everything is a gamble. Your businesses regardless if you started it or purchased it from someone else, was a gamble. Even if you are given a 500 billion dollar business for free it's a gamble. You might walk into the business one day and fall down a shaft and get killed.

In Poker, everyone at the table is gambling even the guy that was dealt A-A. The person next to him that was dealt 2-7 can go all in pre-flop and he could win, but the person with the AA has a better chance.

You could make money from handregging a 25 character .net with a hyphen and a number in the name but it's not likely.

It is possible to start a business with 5 dollars and turn it into a million dollar company, but it's not likely.

It is possible to buy a penny stock and make a lot of money but it's not likely.

Domaining like every industry will cause people that get involved in it to lose their money. Rarely do newbies want to hear the truth about this business and they will get the truth delivered to them one day but they will be a lot poorer.

Even if you follow all the right steps in any business, you can still lose your money, the same in domaining.

If someone has 1000 dollars and they want to invest in domains even knowing the risks, and they want to increase their chances of making money they need to find names that are taken and are for sale.

You could find good names on namepros itself but you will have to look a few times a day for many months to possibly see one good name worth the asking price and usually if it's real good by the time you post to buy it someone already got it.

You could find good names on expiring marketplaces and delete lists. If they have no bidders, it's usually not that good of a name. Most people will say "well, my biggest sale was a closeout auction purchase for 5 dollars". Yes, even degenerate gamblers do get lucky sometimes. You know what happens next? They try to chase that luck and give back all their winnings.

What is a good name? If there was a simple answer we would all be happier.

If someone has money to invest and they don't intend to use the name for their own project, buying a domain is one of the riskiest investments you could make, probably buying terra coin has a better chance of giving you gains, and I do not suggest you buy that.

At the same time, if someone has an idea and they don't invest in the best name they could afford, they are big fools.

For the amount of work needed to possibly make any money domaining, you could do 100's of other things for less money and all will have a higher chance of making you money.

Every industry has a few lucky winners. Most people will lose money on every investment they make it life. Become a master of finding ways to lose the least and you might make a profit one day.

If you are a gambler and know all the risks and don't care. Domaining can be a fun costly hobby but it beats a lot of other hobbies that are more likely to kill you.

Sorry for this depressing post but I recently invested in a pharmaceutical penny stock, they sell anti depressants, I figure the more depressed I can get people, the higher the chance their $0.000000023 stock can go.
Game (poker) theory? :xf.smile:

Anyway this is definitely a valid angle to look at it, just as at almost anything else investing. No risk, no reward...

Fair warning to those looking at it from the wrong angle = easy money.
 
3
•••

HotKey

Made in CanadaTop Member
Impact
10,650
Well, I don't like to gamble. Gambling is like flipping a coin. I also don't like flipping domains, lol. Guess we all have our, as Twiki puts it, angle.

Investing to me implies there is a strategic planning behind the purchases, or a sort of educated speculation at the very least. Taking this into domains, one does not just haphazardly buy a bunch of domains be it hand-registrations or through the aftermarket and call it domaining- unless I guess, that is your angle? I just don't think you'll get very far.

Once you develop a methodology towards investing in domains, or learn how to play the odds if you're more a "gambler", then I think you've become a domain investor.

My strategy is a long-term outlook on qualified names combined with early maneuvering into a certain namespace. It's worked well for me. I didn't back down from domain areas which others seemed nervous to get into because it wasn't in vogue at the time. Being said, while I don't shy away from foraying into the unknown, it's also prudent to have a safety net.

My safety net, or hedging, is on domain names that have had proven results. Dot-com, maybe another traditional extension or two, have had the trail blazed long before I came along and those trails have become highways. Meaning, everyone uses them. So I don't overlook that.

Be aware the domain investing roads are congested now, making maneuverability just a nightmare at times. Your 25k is an healthy initial budget, probably more than what many come into this with. Knowing your strengths and proper research is key to good decision-making into the names you want. So apply some your previous experience in web development, real estate, etc and use it as an on-ramp for naming potentials. Were domain names part of the success of those ventures? If not, should they have been to make them even more successful?

A projected ROI is impossible to give at this point, because you have no history, and every investor is different. Be wise, spend slow. There are many success and failure threads here on NP, and I mean many, take the time to read through them to help you anticipate in what might come.
 
12
•••

mh231

New Member
Impact
48
I have to say, in terms of community this has to be one of the most responsive, understanding and supportive ones I've seen in a while.

I appreciate everyone taking the time to respond to this thread. Know that I have read every response and jotted notes down from each reply.

The responses seem to prove my speculations to be true and overall I need to continue skimming through these threads and picking things up as I go.

I understand investing always holds an inherent risk, and generally speaking....knowledge and experience is the best way to hedge or mitigate that risk. This sounds to be true for domaining as well.

I think I will spend another month studying up and if after that, I'm still interested I'll set up a smaller "burn fund" where I can start playing around and make the mistakes.

Since this would be a long term play for me, I'm in no rush. As another said, "your odds are better investing in anything else" I understand this and it's a very good statement. At this point, what keeps me interested is it will help our port folio diversification, win or lose at least it's money dispersed about instead of in one pile.

I'm a firm believe in diversification even if it means lower yields...because that's usually what it means lol

I just wanted to respond and thank everyone for their insight and time. It's important to me and means a lot. The world still has some good, helpful people after all :)
 
18
•••

biggie

GreenFriendly.comTop Member
Impact
15,019
Know that I have read every response and jotted notes down from each reply.
Hi

i've prolly read thousands of posts from newbies over the years and maybe a handful have ever made that quote above.

taking reference points, shows initiative, which increases potential.

imo...
 
9
•••

mh231

New Member
Impact
48
Hi

i've prolly read thousands of posts from newbies over the years and maybe a handful have ever made that quote above.

taking reference points, shows initiative, which increases potential.

imo...
My time is valuable to me, as is yours to you.
I solicited responses which took your time. It's only respectful that I take each reply serious, as I do my business
 
12
•••

satsdifference.com

Love God Love LifeRestricted (50-70%)
Impact
221
Time lost is key to this in its exclusive distributorship

.coms
 
Last edited:
2
•••

J. Sharma

Top Member
Impact
417
Domain investing means purchasing domain names with the intent to sell them for a higher price or monetize them with advertising. The domain names are generally generic terms or keywords rather than trademarks. Domain squatting is akin to cybersquatting where someone registers the domain name of a trademark owner to try to get them to buy the domain name or seeks to profit from infringing on that trademark.
 
Last edited:
2
•••

satsdifference.com

Love God Love LifeRestricted (50-70%)
Impact
221
Any new idea that comes up that's still available to register in .com is the consideration I've learned to love over 23 years in this from our here said shared knowledge
 
Last edited:
2
•••

inforg

Top Member
Impact
1,056
I used to hate the comparisons between domaining and gambling, but the similarities are certainly there and I have learned to embrace them.

Hand registration is like buying lottery tickets for most new domainers and rarely pays off.

Without knowledge, people who play in the aftermarket are more like casino gamblers where the house has the edge and grinds you out over time.

The seasoned and successful domainer is more like a horse handicapper or sports bettor. If you are knowledgeable, you have the edge and can consistently make money.

I do real estate as well, and while it seems like it should be comparable to domaining, it is not. Or maybe it is, but if you invested in real estate that had a 1-2% occupancy or sell-through rate overall, wouldn't that be gambling as well?
 
7
•••

satsdifference.com

Love God Love LifeRestricted (50-70%)
Impact
221
As a proud hand-regger Had to learn the hard way renewal costs (thanks Jeff for the "only .com" debates)

I don't deal in the aftermarket buying but its always been at their Highest levels for .com IMO

For me I find time that I only have to pay attention 75 domains!
 
2
•••

Robin A.

Established Member
Impact
1,188
Not by any means an expert or full-time domainer. Just a side business. So better to take my words with a grain of salt. Made $26k profit 2 years ago which was alright. Last year only 4k. Portfolio size is only about 100. Still working to build up a 6-figure budget so I can invest in more names and especially higher-quality names that sell themselves. No use investing in domains without a large budget, even if your sell-through rate is 2-3%.

Began catching dropping domains last year, however from around January this year to today I caught only 1 domain compared to about 4-5 a week before :xf.grin:

This is a tough market with prices higher than I've ever seen on the aftermarket. Taking a bit of a break now - maybe prices will come down with the upcoming recession. The guys with the deep pockets and the know-how and experience will always succeed in this industry.

Note: I can recommend Michael Cyger's Dnacademy course. Best resource ever!
 
Last edited:
7
•••
Impact
184
Hand registration is like buying lottery tickets for most new domainers and rarely pays off.
I do not agree with this statement.
Hand registration still alive. Every month there are many good 4-figure sales that have been registered by hand recently. With one or two renewal rates maximum.

It all depends on how you like to play and the strategy you want to take.
Some players prefer to play with very premium domains in a few portfolios (no more than 500 domains)
Others prefer large portfolios with over 5.000 domains where many will not be super premiums and many of them will be hand registered.

¿Quantity or quality?
Two very different ways of trying to make a living from domains.
 
-1
•••

inforg

Top Member
Impact
1,056
I do not agree with this statement.
Hand registration still alive. Every month there are many good 4-figure sales that have been registered by hand recently. With one or two renewal rates maximum.

It all depends on how you like to play and the strategy you want to take.
Some players prefer to play with very premium domains in a few portfolios (no more than 500 domains)
Others prefer large portfolios with over 5.000 domains where many will not be super premiums and many of them will be hand registered.

¿Quantity or quality?
Two very different ways of trying to make a living from domains.

Maybe you missed the “new domainers” part of that statement you disagree with?

15-20% of my domains are hand registered. I also have 20+ years of experience, a diversified portfolio, and enough disposable income to cover renewals out of pocket if it ever came to that.

It is not a good new person, low budget strategy even if some get lucky at it. How many threads do you have to see with newbie trash domains to see that?

Doesn't matter, by the time they figure it out, the damage is usually done and they will be discouraged forever. I'm not going to encourage new investors to register random crap because once in a while random crap sells.
 
Last edited:
7
•••
Impact
184
Maybe you missed the “new domainers” part of that statement you disagree with?
Yes, it is possible that this is my fault. Maybe I read too fast and my English is not very good.

And yes, it may not be the best option for newbies but once you get past "the first course of domains", the manual registrations can generate a very good ROI in good quantities.

Everyone with large portfolios has a good percentage of junk domains, myself included.
 
-3
•••

Sjpals

Established Member
Impact
382
It feels like a gamble.

I have hand reg'ed some, I have listened to advice, I have bought some at auction, listened to more advice, I have advertised on all the market places, my own website and social media.

I have not sold any (I started selling in February).

IMHO
If it was an investment, there would be more openness about buying strategies, the MANY criteria of a good buy, not just the obvious (people seem willing to share to a point)
If it was an investment the resale price would not be so subjective.
If it were an investment, there would be a better ROI than maybe 1% of the portfolio will be sold.
With investments, you have a good chance of all of the investment being able to be sold on reasonably easily (not the case with domains).

It therefore feels to me more like a gamble than an investment.
 
-2
•••