With subprime hurting everyone, the credit markets drying up, terrible volatility in the stockmarket, houses tumbling in value, currencies under assault – where is safe nowadays for you to put your money.

Well this might sound a little bit out there but I believe Domain names to be the perfect investment vehicle.

Now maybe you are somewhat sceptical as surely domain names became worthless during the Tech crash?

This couldn’t be further from the truth, yes values were affected, but since then domain names have continued to increase in value at an incredible pace and they are showing no signs of slowing down.

So what is a domain name:

Well a domain name is a web address – it’s your address on the web. It’s similar to a phone number, except it is an actual location in cyberspace that is accessible anywhere on the globe. Anyone that wants to build a website has to have a domain name.

Now if you know nothing about the industry you’ll be surprised to hear that premium domain names are selling for incredible figures, and only a very small percentage of sales are reported. (This is just the name – not a website or business.)

Here are a few from the last couple of years I’ve selected:

Random Domain sales from 2008

Skiresorts.com $850,000 – 2008

Fund.com - $10 million - 2008

Datarecovery.com - $1,659,000 – 2008   

Cruises.co.uk - $1.1million - 2008

iReport.com - $750,000 – 2008

770.com - $330,000 – 2008

SEO.de - $71,000 – 2008

Fishing.net $52,500 - 2008

Filmschool.net - $49,500 – 2008

Atty.com - $48,000 - 2008

Random Domain sales from 2007

Porn.com $9.5 million – 2007

Seniors.com - $1.8 million – 2007 

Guy.com $1 million – 2007

Shemale.com - $520,000 – 2007

LI.com - $500,000 – 2007

Recycle.co.uk - $310,000 – 2007

Realestate.net - $300,000 – 2007

Buckhead.com - $250,000 - 2007

Yearbook.com - $237,500 - 2007

Crosswordpuzzles.com - $210,000 - 2007

DIY.net - $200,000 - 2007

Ringtones.net - $175,000 - 2007

I’m sure you get the picture. These are incredible sums of money changing hands, and this is just the tip of the iceberg. The deals that go on behind closed doors and aren’t reported to the media are rumoured to be much larger in volume and it’s estimated that the amounts are larger as well.

Benefits of Domain Names

So apart from the large money that can be made what are the other benefits of domain names:

They are virtual – you don’t have to store or pay for upkeep (yearly renewal fee of $7)

They pay interest/income – You can park the name with a company that specialises in monetizing domain names, and split the advertising revenue generated. Or you can create a simple site and place google adverts and keep all the revenue for yourself. (this is incredibly easy and you need no web design experience.

You can develop them and turn them into a successful web business that is branded   (premium names are a business in a box.)

Local and regional economic fluctuations won’t effect you as your site/asset is viewable by the whole world.

A site works for you 24 hours a day, it never rests, sleeps, gets sick or moans you’re paying it too little – it just keeps working.

Asset security - Property and possessions can be taken from you and they are fixed in one location. A domain name is accessible in any country – it doesn’t matter where you are on the planet you can access your investment.

Investment Privacy - You can also hide the contact details, so people prying into your personal business will never know you own it.

These are just a few of the benefits of domain investing. Obviously all investors look for capital appreciation and with domain names remaining unaffected by the current economic woes besetting our financial systems, they look like a smart place to diversify some of your investment portfolio.

Registering Domain Names

Before you run out and start registering hundreds of names and expecting the money to roll in. Please be aware that 97% of the current registered names are worthless junk. The ones that do have value have already been registered.

Sure, it’s possible to strike it lucky with a new technology or emerging trend, but the chances of this happening are so slim as to not be worth considering.

The only way to really make money in this industry is to buy names that have already been registered in sectors that are likely to experience growth.

But picking winners is a minefield and before you jump in with both feet, take your time to learn the market. Which names and extensions are on the move and which are experiencing difficulty. A shortcut to all this is to employ the services of a broker who can help you obtain the names you need, whether it be for investment or business purposes.

But do not let this stop you doing your own due diligence. The domain market is very similar to the stock market and if you don’t know what you’re doing you’re likely to lose your shirt…

Happy investing.

Mark this Listing