Has anyone leased out a domain name?

[nickd1]

I've seen many offers for leasing domain names with option to buy sometimes.
Has anyone had experience with this? Is it a popular option versus selling/buying names? What are the average lease fees? Thanks.

 

[HostingInsider]

I've never heard of it, nor would I ever be interested in doing it. Maybe if a company leased out similar domains to members of affiliate programs, but never to run as a commercial website, way too risky.

 

[nickd1]

The argument I read in favor of leasing names is that a buyer can gauge the effectiveness of a name for a few months and then decide if they want to go ahead and buy it at the predetermined price, or simply continue leasing the name by renewing the lease agreement. I've come across many sites offering this option to potential buyers. Potential candidates for this are existing sites looking to drive in more traffic by using multiple domain names.

 

[www.AmCy.org]

Has anyone had experience with [leasing domain names?]...

I offer to rent out any of my domain names for sale @ a rate of $4.00 per day with a minimum rental term of seven (7) days.

Some months ago, someone who has been interested in one of my poker domain names rented it for 2 weeks. He used the time to point the name to one of the major parking services (I think it was Domain Sponsor.)

There's no risk involved because all I'm doing is changing the nameservers temporarily. No big deal, IMO.

AmCy

 

[equity78]

Nice Post AMCY I agree. "too risky"? DON"T see any risk if you have a proper lease agreement.

 

[JMJ]

Several of those few that have exceptional names lease rather than sell. The benefit is they always own the name and a steady revenue stream. In addition the person leasing will most likely spend time promoting the name getting it indexed, increase incoming links etc. Once the lease is up you have your name and hopefully more traffic than you had to start with.

 

[nickd1]

As usual great info guys, thanks. Besides the $4.00 per day with a minimum of 7 days reported above, any other figures that anyone has come across? What about a buyout option at a predetermined price. Has anyone ever seen this built into a lease agreement?

 

[Gene]

I never knew you could, its kind of a risky move... :imho:

How is it risky? You maintain full control of the name... just change the nameservers as needed.

 

[equity78]

http://www.casinocitytimes.com/news/article.cfm?contentID=151307


LEASING OF VEGAS.com

 

[MissFlora]

I don't see potential risk in it when changing nameservers and you still have that few dollars a day in your pocket. It's a win-win situation for both parties, IMO.

 

[Jeanco]

The 2 week trial lease sounds like a good idea, I may offer that with some of my domains.

 

[Joey]

I'd say it'd be risky, expecially in running a business, I wouldn't do it.

 

[equity78]

For those Stating the risk try explaining, you ever lease a car with an option to buy. Proper lease agreement will protect both sides.

AMCY, NAME MOGUL,GENE and Flora all made clear explanations the risky group just said "risky"

 

[Ron Jackson]

I currently own two .us domains that I have out on a lease with option to buy program. When I was approached about the names (by two different buyers) I had a price tag of $1,000 each on the domains. I told the buyers they could own them immediately for that, or I would lease them to them for $100 a month for 12 months ($1,200 total) and would transfer ownership to them at the end of the 12 months if they made all payments on time. Both took the lease arrangement.

Under the agreement, if they stop making payments at any time, all previous payments will be considered rent and I retain ownership with their rights then relinquished. I simply changed the nameservers to the ones they wanted to use after they made their first payments. Both buyers have paid steadily on time and they will gain ownership by the end of the summer.

This is an attractive plan for many small businesses who can afford the monthly payment more easily than paying the lump sum up front and you earn 20% extra for letting them carry it for a year - not a bad return in today's financial market - especially when there is no risk to you - you just change the nameservers back to your own if they default.

 

[Midano]

Duke, would you be so kind and share the sample agreement with us?

 

[Gene]

Thank you for the excellent information! I too would like to see the lease/agreement form you used for this.

I currently own two .us domains that I have out on a lease with option to buy program. When I was approached about the names (by two different buyers) I had a price tag of $1,000 each on the domains. I told the buyers they could own them immediately for that, or I would lease them to them for $100 a month for 12 months ($1,200 total) and would transfer ownership to them at the end of the 12 months if they made all payments on time. Both took the lease arrangement.

Under the agreement, if they stop making payments at any time, all previous payments will be considered rent and I retain ownership with their rights then relinquished. I simply changed the nameservers to the ones they wanted to use after they made their first payments. Both buyers have paid steadily on time and they will gain ownership by the end of the summer.

This is an attractive plan for many small businesses who can afford the monthly payment more easily than paying the lump sum up front and you earn 20% extra for letting them carry it for a year - not a bad return in today's financial market - especially when there is no risk to you - you just change the nameservers back to your own if they default.

 

[Jammer]

I've heard of leasing with the option to buy.It's a way of doing business in a lot of industries.
It is risky in the sense of diluting your brand though.You have no idea what someone could potentially do with the name.It's unlikely,but if you have a premium name and someone uses it to scam users out of their money somehow(say using it and accepting credit cards or something)....although you control the ownership of the domain....who's left holding the bag?
I can see it being a nightmare.....that would be the downside of leasing a name.

 

[Raf]

I've never leased out a domain, but I don't plan on doing it anytime soon. As for doing it yourself I don't really see a problem with it, the only thing you would have to do is change nameservers to whatever the client wants and have some kind of agreement.

 

[equity78]

Great Post Duke and if a copy of agreement could be shared much appreciated, if not understand.

 

[Ray]

nope, i have never leased out one. nore did i no that you could do that

 

[Ron Jackson]

Duke, would you be so kind and share the sample agreement with us?

An attorney might scold me for this, but I laid out the terms and got the buyer's acceptance via email. As the one controlling the domains I didn't have anything to lose, so I didn't require a signed contract. I can see why a buyer might want one, but honestly, if someone stiffed you for $1,000, even with a signed agreement, it would cost you far more that 1K in time and legal fees to collect making it a moot point. Each buyer learned who I was from links I gave them and trust me to deliver the domains when their payments have all been made. Here is the initial email I sent laying out the terms once the buyer agreed to purchase via a lease/rental arrangement instead of buying the name outright:

"Dear Mr. Garrett:

The initial $100 payment can be made via Paypal (to this account: [email protected]) or with any major credit card. If you prefer to use a card let me know and I will set up a special checkout page for you on our secure server and send you a link to reach it. Additional $100 payments will be made each month using the 7th of the month as the due date (i.e, next payment will be due Nov. 7). I will send you a reminder email on the 1st of each month. The final payment will be made on Sept. 7, 2005. After that payment the domain will be permanently transferred to you (when the time of transfer comes I will have you open a free account at the current registrar which will allow me to immediately push the domain into your account).

Until that time, I will retain control of the domain but will change the nameservers to those you will provide me (your hosting company will give you the name of 2 nameservers to provide me so that your website will resolve properly). If for any reason, the 12 payments due are not made in a timely manner (we will allow an additional 10 days beyond the due dates before considering the payment schedule to be in default) this agreement will be invalidated and the prior payments made will be considered to have been lease payments with no ownership interest conveyed. Otherwise you will receive sole ownership of the domain at the end of the payment schedule and we will no longer have any interest or claim on it. If you have any questions feel free to contact me at any time."




You might want to add a clause forbidding improper content on the domain while it is still in your name or anything else that concerns you. Again the method I used constitutes a "gentlemen's agreement". I am not a lawyer and the language I used was not reviewed by an attorney. If the domains in questions were of higher value I would definetly recommend having an attorney draw up a more comprehensive lease agreement and get it signed by both parties. I have only done this on a few occasions but it can help close a deal and will often bring more money than the domain might have otherwise.

 

[Gene]

Thank you Ron! It's very kind of you to share this with us.

 

[Rob]

I would lease my domains out much like the members above, however I would keep a close eye. No kiddy porn on my domains thank you, I dont want bombs through my door where people have looked up the whois!

It couldnt hurt - I get traffic and if they dont buy at the end of it, you have a little bit of extra traffic.

However, for obvious reasons I wouldnt rent a domain from somebody else. As soon as it becomes popular they want $10,000 that day or no more domain!

 

[Gene]

I would lease my domains out much like the members above, however I would keep a close eye. No kiddy porn on my domains thank you, I dont want bombs through my door where people have looked up the whois!

True... but I would set up a special -separate- registration for name leases. Probably make the reg's private too.