# question-answeredI have \$500 to invest in domains. Can I turn this into a \$200-\$300 per month income?

#### twiki

##### Top Contributor
I just got this question from a fellow beginner domainer here. Good one, legitimate question. I believe not everyone here on NP might know the answer to this question, so here it is:

Absolutely not.

( Edit: or at least not at first, unless you're really lucky OR very good at it = native talent, OR you put a lot of sweat in, which is likely not happening for 95% of beginner domainers especially due to the odds at stake )

Domain investment is not a get rich quick scheme. And especially when starting up, you need time and efforts to get to some profit.

Also, 95% of people starting with domain investment will never make a single \$ profit out of that (or maybe even more than 95%, I'd say that 99% non-profit-ers is a more appropiate percentage).

Anyway. If you're still unclear, here's some math that would explain it:

With \$500, the best number of domains you can get for such amount are going to be handregs. Either drops or fresh regs. (Although you can theoretically spend \$500 on just one good domain at auctions; but as a beginner, the truth is chances are that won't be a good domain but junk - because you lack experience.)

So let's say you hand reg or get some drops. You can register say 50-60 .com domains for one year (or a bit more depending on registrar and offers, but anyway). I'm gonna take the 50 names number as it's more easy to calculate.

The average sales ratio in our field is 1...2%. As a beginner, chances are you will be on the 1% side... or maybe even less. Will use the 1% ratio in this calculation below.

Let's say you register 50 .com domains with this \$500 (note: per year). In this case, as per the ratio above, you have a chance at any profit whatsoever only if you are going to sell that domain ABOVE \$1K. Then you subtract \$500 x 2 = \$1K from the sale (the cost of regs over the 2 years span), and here you have just a few hundreds profit - if the domain sells above \$1K. But side note, renewals are usually more expensive so you might spend a bit more on the second year if you renew your names.

Say you are able to sell one domain in 2 years (again at the standard 1% ratio) for \$1500.

This means you just earned \$500 (over 2 years), which goes to an earning of ~\$20 per month on average from that investment (you need to keep that \$500 locked in for 2 years). Therefore you will still need to continue keeping that \$500 invested in order to continue making \$20 per month. (Or a bit more if you're good, but likely nothing in a larger order of magnitude.)

( Later edit: And if you want to grow your portfolio naturally, you might not be able to take any money home during the first years, as each of the \$ you make will have to go into reinvestment. )

Not what you expected, may I ask?

But wait, there's more.

Since most beginners sell domains at xxx range, not at 4-fig (due to lack of experience and lower quality portfolio) making this 4-fig sale is even tougher; although the sales ratio increases somewhat as the price lowers. The lower the price, the bigger the renewal cost pressure. Which puts you in a risky terrain.

That's if you decide to stick with .coms. And I will repeat here the advice I got when beginning: If you want to start with domain investing, get .coms at first. Chances are you can have far less success with other TLDs although they might be easier to get. (Why: Because sales ratio decreases far below 1%, like 0.1% or even much less). I listened to this advice when starting and it really helped me get successful with domains. It really made a difference for me, listening to more seasoned domainers back then.

The gTLD path: Alternatively you can of course get, say some .xyz for cheap (\$1 or less) or any other ngTLD, but I would not advise beginners to do that.

Again you probably won't know what you're doing and your xyz sales will not match the ones of top sellers here. And the same for other gTLDs not just xyz which I picked only as an example. Now since the sales ratio is terrible for most noncoms, unless you know exactly in advance who would buy that domain from you and why, you're going to be at a loss overall with gTLDs.

I need to also share with you here the results I got when starting with domains, a few years ago.

I banked a \$14K loss in my first year starting with domains (spent \$41K and made back \$27k). But having business experience behind, I knew how to make this work.

I almost made it to zero in the second year ( still some minor loss) and I only banked a profit in the third year. Therefore, for most of you beginner domainers starting just now, I would not expect things to be any easier. It's simply not how domaining works. Yes there are some super investors here that show amazing sales, but those are few and talented, and maybe lucky. So i would not bet on similar results if I would be in the starting position.

Again, domaining is anything but a quick get rich scheme. It's hard work, financial risk and strained nerves when you wait months and nothing sells; or when you see your capital dwindling in the first years because you banked a loss. But if you're good at it, and if you put the sweat in you can be successful - like in any other field. Or not. It's entirely up to you to mitigate these rather tough odds in our field.

Final note: IMPORTANT: Please also note that economical tsunami is coming. It's already born and has just to reach us. It might be the worst moment to start now with domains.

Or not - if you are a super talent, so do you feel like you are one...? Otherwise, for most of us here (including myself) there's no such thing. I personally also have no talent whatsoever at domains BTW - all my results come from sheer hard work and plenty of sweat, and putting/risking a lot of money in. I made my "talent" by working my b*tt out - so it's not talent, but experience.

Anyway, I hope my reality check here is not going to depress you cause that ain't the point.

But rather help you make that call, whether to get in the cold water... or not. Expecting easy, nah, that's not going to happen. Just be careful.

Good luck ahead, and happy domaining!

(edited for clarity)

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#### Mimo83

##### Domains Passionate
It feels like you really hate newbies you don't want any more competition

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#### twiki

##### Top Contributor
It feels like you really hate newbies you don't want any more competition
You feel wrong.

Thousands users here would disagree. I've been sharing valuable information in hundreds of posts here, many aimed at beginners. My posts of this kind regularly make it to the weekly most read on NP. It looks like you don't know that. Search my posts history.

I'm simply trying to wake them up to reality and save them the losses. If you're into domains, you need to take it very seriously. Especially in this moment. You need to discover a special angle, you need to have the skill, you need to put in the sweat and capital. (Edit: LOTS of capital.) Starting today? Even with all these in hand, you might still fail.

I started years ago, but if I'd have to start today with what I had back then, I'd have zero chances. Zero. The market is too thick at this time for it.

Edit: I caught one of the last trains at the time where the lower range market was thriving. Today, not so much. Lower end domains have few sales: too much noise and too little signal.

End note: I have no direct competitor, and no worries there will be one anytime soon, if ever.

If you look at the sales reports, there's almost nobody selling 4-figs from drops while I have reported a ton of them. For reasons I know well.

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#### Real AJ Martin

##### Established Member
1. Buy 8 large city geo service names on namejet or dropcatch. https://en.wikipedia.org/wiki/List_of_United_States_cities_by_population

2. Lease those 8 domains out at \$30 a month (\$1 dollar a day) with 302 redirect or use a simple landing page that links to their site.

Results:
Total investment \$500 to \$600
Monthly income \$240
Expenses - \$40 for hosting etc

\$200 net monthly income

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#### twiki

##### Top Contributor
1. Buy 8 large city geo service names on namejet or dropcatch. https://en.wikipedia.org/wiki/List_of_United_States_cities_by_population

2. Lease those 8 domains out at \$30 a month (\$1 dollar a day) with 302 redirect or use a simple landing page that links to their site.

Results:
Total investment \$500 to \$600
Monthly income \$240
Expenses - \$40 for hosting etc

\$200 net monthly income
Yes, it is possible. It is also possible with drops and closeouts. Or even with a single auctioned domain fro \$500 = if you are skilled and lucky you can sell that for \$20k perhaps, hows' that for ROI?

But this would be a best case scenario, not what the average beginner will experience.

Same is in my avenue: One could take ~55 drops at \$9 and if they sold just one for 1...2k, that'll be success. I have sales ratio over 2% so it's definitely possible. I would make good money from 55 drops.

But that's not what would happen for most beginners.

Outbound provides perhaps a smaller barrier of entry, same is SEO based (your example is a mix of them I'd say). But still, only the one with the skills, putting the (lots of) time in and being a lucky as well will make it work.
That's why the inbound reported sales outweigh outbound ones by a sheer margin. Outbound is hard work and sometimes for no result. The ones who tried it or do it (I tried it as well) know it. And income is usually not that satisfactory. I'd say it's hardly investment, but rather looks like sort of a day job.

Your lease case - well, same thing, IF you manage to really sell that lease out. It's not easy. Don't tell them it's easy. But possible? Everything is possible with domains, except in most cases it doesn't get there.

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#### alcy

##### Top Contributor
it's a dumb question from newbies alsays looking for quick money. it says something bout u if u find it legitimate

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#### Mking

##### Established Member
1. Buy 8 large city geo service names on namejet or dropcatch. https://en.wikipedia.org/wiki/List_of_United_States_cities_by_population

2. Lease those 8 domains out at \$30 a month (\$1 dollar a day) with 302 redirect or use a simple landing page that links to their site.

Results:
Total investment \$500 to \$600
Monthly income \$240
Expenses - \$40 for hosting etc

\$200 net monthly income
Interesting strategy. So would that involve doing some outbound and then directing to a domain escrow service like Dan for leasing?

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#### Real AJ Martin

##### Established Member
Interesting strategy. So would that involve doing some outbound and then directing to a domain escrow service like Dan for leasing?
Outbound for sure. Then use a redirect service or the registrar DNS to redirect the traffic - use paypal or stripe for monthly billing - no need to involve Dan. I avoid Dan since they don't take American Express (which most business owners have and like to use for points and safety) and they are based in Netherlands which most of my clients can't find on map.

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#### Mking

##### Established Member
Outbound for sure. Then use a redirect service or the registrar DNS to redirect the traffic - use paypal or stripe for monthly billing - no need to involve Dan. I avoid Dan since they don't take American Express (which most business owners have and like to use for points and safety) and they are based in Netherlands which most of my clients can't find on map.

Appreciate the share. This makes a lot of sense as it reduces the risk for the customer, paying \$30 a month to test out a domain may be far more doable for a smaller business than shelling out \$xxxx. Do you mind me asking if this is something you would offer initially, or as an alternative to buying the domain name outright?

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#### Real AJ Martin

##### Established Member
Appreciate the share. This makes a lot of sense as it reduces the risk for the customer, paying \$30 a month to test out a domain may be far more doable for a smaller business than shelling out \$xxxx. Do you mind me asking if this is something you would offer initially, or as an alternative to buying the domain name outright?
i have a core set of names that i will never sell but i will redirect on a per month lease agreement -

now if you are talking about lease to own that is different animal - then you have payment plan which is basically "layaway" - you are offering credit to the buyer and you can foreclose if they miss a payment -

all these models are based on physical real estate well established transaction models - nothing new here -

what i am talking about is basically like leasing office space or renting a dwelling - you can use this domain name each month for a specified monthly payment you are NOT buying the name BUT you can enjoy the value from having this name redirected to URL of your choice thus controlling the name to some level.

I don't allow people to build sites on these "pure lease only" domains since they can damage the long term value of the domain name if they use the site in certain way or use tactics like black hat SEO to damage the potential to develop the domain name as a web site in the future. thats' why i use a 302 redirect and not DNS pointing in my agreement.

also in the agreement i monitor the final url that is on the end of my redirect - and i can pull the redirect at my discretion and terminate the lease if i am uncomfortable with the content or if they change the original intent of the content that was on the url at the time of the agreement.
so think about it like this - the site they want to redirect to sells carpet cleaning and then after my redirect is in place they change the content to an adult site or they re-redirect my url to another site - therefore NO SUBLEASING - that would end the agreement.

Not financial, legal or technical advice - just my opinion, thoughts and based on my experience.

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#### Mohd Wal

##### Established Member
Thanks for the article and advice from the TOP CONTRIBUTOR'S. I have learned alot. All the best to everyone.

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#### Skipperscrown

##### Established Member
1. Buy 8 large city geo service names on namejet or dropcatch. https://en.wikipedia.org/wiki/List_of_United_States_cities_by_population

2. Lease those 8 domains out at \$30 a month (\$1 dollar a day) with 302 redirect or use a simple landing page that links to their site.

Results:
Total investment \$500 to \$600
Monthly income \$240
Expenses - \$40 for hosting etc

\$200 net monthly income
Thanks for the info! However, I can't help but wonder if leasing is the same as parking? I guess it's different after reading the subsequent threads. Thanks once more!

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#### Real AJ Martin

##### Established Member
Thanks for the info! However, I can't help but wonder if leasing is the same as parking?
yes -with a few nuances -
2. zero click - the redirect is the click
3. flat fee vs pay per click - no worry about click fraud

you could have a lease with payment based on visits so would be variable fee lease but many times the flat fee "all the traffic you can eat" for one flat fee is preferred by client and it removes the click fraud concerns on both sides.

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#### Skipperscrown

##### Established Member
yes -with a few nuances -
2. zero click - the redirect is the click
3. flat fee vs pay per click - no worry about click fraud

you could have a lease with payment based on visits so would be variable fee lease but many times the flat fee "all the traffic you can eat" for one flat fee is preferred by client and it removes the click fraud concerns on both sides.
Thanks for the clarification! I see how that works.

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#### bhartzer

Epik.com Staff
If you are willing to put in a little bit of work to develop those domains (i.e., a basic wordpress site on the domains), then you could easily reach \$200-300 a month in Google Adsense revenue per domain with a \$500 investment.

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#### twiki

##### Top Contributor
If you are willing to put in a little bit of work to develop those domains (i.e., a basic wordpress site on the domains), then you could easily reach \$200-300 a month in Google Adsense revenue per domain with a \$500 investment.
Absolutely correct.

Except this is not domaining, this is website development. The more you distance from domaining itself, the more solutions like this you'll find. And you're veering off-topic.

And it's theoretical - in practice, unless you have a very good plan, and a bunch of work included. I know this kind of work, too well, from the inside. Been in it ever since the old MFA sites and whatnot. Today it's much trickier, including Adsense closing accounts at any moment with/without a good reason. In fact that's why I stopped doing it, you don't hold the cards, G does.

You can make thousands per month with a simple app / website but a good idea. Or more. Or sell the app later for a large number of figures. Or, or etc.

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