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How much a Domain Name appreciates in value annually?

Labeled as analysis in General Domain Discussion, started by DomainRazor, May 26, 2020

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  1. DomainRazor

    DomainRazor New Member

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    I'm very well aware that there are many variables into this. But I’m after a bold park range.. let me give an analogy.. average residential property prices in the country I live doubles every 8-10 years ..this boils down to 10-13% long-term annual value appreciation.. ..highly appreciate responses from DN veterans who has been in the industry for a white
     
    Last edited: May 26, 2020
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  2. ecalc

    ecalc Top Contributor VIP ★★★★★★★★★★

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    First of all, your time vs interest rate calculation is off. Look up the rule of 72. Back to your question. There is no widely accepted composite index of domain prices and few investors agree on comps and/or appraisals. There are some growing databases of reported sales, see namebio and dnjournal. Sort the top 100 sales in namebio and you'll find more than half occurred over 10 years ago, draw your own conclusion. IDNX was a scholarly stab at publishing a market index, see https://www.idnx.com/idnx.csv, last updated November 2014. If you’re hoping to achieve predictable returns with domains, I recommend sticking with local real estate, good luck!
     
    Last edited: May 26, 2020
  3. Ategy

    Ategy NameCult.com TheDomainSocial.com VIP Gold Account

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    The vast super-majority of domains have little and even zero actual value. So ultimately to say they appreciate 1% or 10% or 100% makes little to no difference.

    On the other end are liquid domains (ex: 3L.com, 4N.com, 2L.org, etc) and super premiums one word .com's, and they follow "demand", which isn't exactly linked to "inflation". Ask people who invested in short "liquid" domains at the end of 2017 or early 2018 .. they lost a fortune as the CHIP bubble burst.

    What's left are strong two-word .com's, strong one word .co, .net, .io, etc. While these are less liquid, they are slowly going up in value not so much because of inflation, but again due to demand as more and more businesses come online and more importantly, as those businesses discover the benefits of having a good domain.


    So ultimately if you're asking because you want to put a number in your spreadsheet to project the future value of your portfolio .. there honestly is no number you should use. Demand on domains is not totally constant .. even more importantly .. the bigger factor by far is the specific quality of your portfolio. Different portfolios will rise and fall in value differently than others.
     
  4. CraigD

    CraigD 360promo.com VIP

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    Given all the information that other more knowledgeable people than myself will invariably post here, I am going to reply to your question from my perspective, based only on 'dumb' robot valuations.

    From what I have noticed from my portfolio over the last 17-odd years, a good undeveloped premium dot com name should appreciate at about 5-10% per year. That's my rough ballpark figure only, based on my portfolio that has been sitting idle for the best part of the last 13 years.

    Having said that, in the real-world, a domain could appreciate 1000% or more overnight if your keyword catches a trend.
     
  5. Jimmysun

    Jimmysun Established Member

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    Double or nothing:cautious:
    There are two kinds of domain, one you can considering like real estate the other tent, one appreciates value annually one does not.
     
    Last edited: May 26, 2020
  6. frank-germany

    frank-germany domainer since 2001 / musician VIP

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    let's say we see a growth of 10% per year
    great

    how much is your profit after 10 years
    when you hold lets say 1000 domains

    the average value of the domains is 6 USD
    the average cost is 8.79 USD per years


    what's your salary
    how much do you lose
    while calculating that?

    how much did I just lose
    while typing that?

    buy stocks
    ( no advice stocks have a substantial risk involved )
     
  7. CraigD

    CraigD 360promo.com VIP

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    Agreed... and at some point in our lives we are all going to have to call it quits and sell or dump the remaining majority of our portfolio at (quite likely) a huge loss.
     
  8. polongru

    polongru Established Member

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    I think we should consider creating mini pages or landings. In case of good domains it would be more profitable than parking. Parking gives less and less profit.
     
  9. equity78

    equity78 Top Member TheDomains Staff TLDInvestors.com PRO VIP ★★★★★★★★★★

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    Last edited: May 26, 2020
  10. noneisnone

    noneisnone Established Member

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    too many variables like you said any percentage given is wrong no way to tell
    case to case basis.
     
  11. CraigD

    CraigD 360promo.com VIP

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    That was actually how I ended up with a domain portfolio to begin with (I never intended to be a domainer). I initially had virtual tours on each 'lander' domain to attract specific traffic that I was targeting, and then sent them to my business domain.
     
    Last edited: May 26, 2020
  12. biggie

    biggie Top Contributor VIP ★★★★★★★★★★

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    Hi

    how much appreciated value depends on the category and then specific domains
    also depends on "timing", as in when you sold it or didn't sell.
    also depends on when you bought it and how much you paid.

    like when chips hit the fan and prices increased on 4 letter/number domains down the extension line, as volume peaked....
    but after chip trend faded, value deflated and prices dropped.

    or
    take 3 character.com and 3 letter org

    when I started domaining, one could register 3 char for $6.95 and 3 letter.org were about $20 average reseller price.

    now in 2020 both categories have had sales in 4 figure and some 5 figs ranges.
    they have been more stable than chips, in comparison to fluctuating values.

    and then again, it all depends on how much a seller can sell a domain for, that raises the appreciated value.///
    some folks don't appreciate what they already got now. cuz dey flip too fast to find out :)

    imo...
     
  13. HotKey

    HotKey Made in Canada VIP

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    Or they flip fast enough to get out..

    Domain names would have to be broken down into many sub-types to determine appreciation as a fixed range, as they are all unique. Grouping which domains are similar to one another, ie. length, characters used, types of words, extensions used, and from there extracting your sales data to begin a sandbox of appreciation range. But it would still have to be sorted for even more considerations, ie. trends or fads that are no longer relevant, and other influences like the past chip craze or the current pandemic.
     
  14. HotKey

    HotKey Made in Canada VIP

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    Just to add, depending on the name there very well could a depreciation or a years-long flat, where value remains unchanged. This is the difference between physical real estate and digital. I think physical can only go up in value because other than something like land contamination or economic downturns like what was happening in Detroit years back with the housing market. But generally the property itself can always be rebuilt on, with a beautiful piece of architectural marvel that can drive up and affect surrounding area value.

    In the digital realm, the value in the DN terms of garnering appreciation might only be guaranteed in the trusted and true blue-chips; super-premiums in the .com space or certain ccTLDs.

    The one-off insanely high-value purchase by a deep-pocketed end user who really really just wanted that particular DN name can also throw off dependable valuations, but must be taken into account as well because it's still a sale that adds to the overall picture.
     
  15. shojib

    shojib Established Member

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    yes
     
  16. TheBaldOne

    TheBaldOne Top Contributor VIP Gold Account ★★★★★★★★★★

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    Two things to mention about your analogy.

    1) If the property doubles in value over 10 years then the compounded increase is only circa. 7% per annum and not 10%.

    2) If all property doubles at exactly the same rate, say doubling in price every 10 years as per your example, then actually you have not advanced in the property market if your property increases by the same extent, another property will still be the equivalent value compared to your property 10 years from now as it is presently.

    However, again using the property market as an example, some towns and properties may boom in value for various reasons whilst others may fall again for various reasons. The trick is to do your research and get properties that will likely boom in value above the average, and exactly the same applies to domain names.

    I would also look at short term investment in domains as being for a period of 5 years, 10 years investment being the norm, and 15-20 years being a long term investment period. Of course should you sell a domain name the day after you register it for a very nice premium then that is a bonus. Also you should accept that some of your investments will lose value, just like with properties.

    Just my opinion of course.
     
  17. Save Breach

    Save Breach Established Member

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    i think it depends on the length of the domain and popularity of that keyword at any particular time. and also chinese demand

    cheers
     

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