Domain Names as an Investment Option

If you Google the term ‘investment options’ you will come across options that are traditional in nature and are time-tested. Such as High Yield Saving Accounts, Certificate of Deposits, Government Bonds, Stocks, Real Estates, and Gold.

But, there are other options also available which may include domain investing. Yes, domain investing can be an investment option! Though it is not that popular as the traditional options – but there are people who make money investing in domain names. Buyer beware – there are people who lose also.

I n order to operate it as an investing activity rather than trading activity the following things are important:

  1. Know what are domain names – it’s an important step. First, you need to understand what are domain names? Why they are important for businesses or in general
  2. Investment Options: Domain names as an asset category are full of options. There are short domain names, Dictionary-Based one-word domains, Numeric Domains, Two-Word Domain Names, and so on. Avoid investing in hand registered names. Go for domains that are highly sought and can be acquired at fair value.
  3. Security: Like how you guard your traditional assets – the same way it applies to domain names. Some dangers associated with domain names are UDRP and Domain Theft. The investor has to keep domains securely
  4. Renewals: Domain names require yearly renewal or renew once 10 years if you choose to renew to that length. There are scenarios were ultra-premium domains get dropped due to non-renewal.
  5. Sell it: Putting the domains for sale is the way to recover your investment amount. People make 10x to 100x on their investment sometimes early and sometimes as late as 10-20 years. Patience and timings are important.
  6. Nomination: Though it’s not directly provided by the domain registrar – you as an investor should draft a will nominating your family as the right heir of certain domain assets. Providing them access credentials is also important.
  7. Updates: It’s important to keep yourself updated with domain-related news and updates from your registrar. It is an important part of domain investing.
  8. Professional: Since domain names are not that easy to understand and are tricky from an investment point – it’s imperative to seek professional domain consultant advice who can guide you in building your domain portfolio.

Some links for more study:

Above are some of my thoughts – I am not giving any professional advice – everyone’s situation and understanding about online assets are different. Exercise due diligence if you really want to invest in domain names.

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