Lease a domain and triple it’s value

MoneyI’ve only gone and done it! – leased out my first domain :)

After my shenanigans with replica weapons I got the wife on board so that she could research and email companies and we signed up a deal that rewards all our efforts very well indeed.

Leasing a domain is something I am going to put more effort and time into, I think that if I can gather a good collection of domains just now and rank them in Google then they could be promoted and leased out for a couple of years at a time whilst still owning them and offer a stable and long term income and at the same time if chosen wisely the domains themselves will appreciate in value.

LeaseThe market is still quite young and it isn’t the easiest thing in the world to do but it is very rewarding. Better than owning houses and leasing them, domains are low maintenance and have the potential to rise in value faster offering an ultimate exit strategy at some point when they could be sold off as either a going concern or individually.

Do you know what the real killer is about doing it this way? – Rank a domain with a mini site on it and you can get 3 to 4 times more profit by leasing it to the right people than you can by traditional methods of either PPC or selling it.

You can buy a domain to lease at reg fee like I did, so about $10
Trying to sell the domain just as a domain would get me around $200 for it, profit but nothing great.

After registering the domain comes the task to rank it consistently in Google, the domain once ranked brought in traffic and generated ppc income of around $500 per month,  very nice but changeable and unreliable. If I tried to sell this as a website in the average webmaster community I would be looking at about  $6000 to maybe $12,000 tops for it. Great profit but I am looking for better longer term income rather than a quick cash boost.

400%By leasing the domain to someone who was involved in the industry they can better monetise the traffic and value the site more than a domainer or a typical webmaster, this means the return is greatly increased and you can aim for something like $12k a year lease rather than as a one time payoff. Leasing out your domain even with an option to buy built in can treble or quadruple the value of your site and domain name to the right people.

I intend to be more selective about the domains I chase now, having value in the domain itself is a better starting point rather than looking for reg fee domains for me, if the domain is valuable then ranking that domain makes it extremely valuable.

Product based UK domains which are applicable to the UK market are where I intend to devote my time. Why? Because it is easier to concentrate on a geo location like Google.co.uk for rankings rather than worldwide products or services that may need to rank in Google.com.

The other added bonus is that if you find & buy an excellent domain name and manage to rank it you get to earn from the traffic with Adsense or the like while you actively contact businesses to seek out a lessee.

SearchI have also refined my search process which has itself turned up some new genres, sitting down and deciding that your willing to spend a budget on a domain to rank it and earn from ppc while you look to lease it out is a great strategy, but deciding upon the niche and finding the right domains for sale is a task in itself. There are tools available that make this a bit less of a stab in the dark and I’ll go through what I am doing now in another post.

So first one leased, a new business started and another set of tax returns to do next year , the joys 😉 I’d also like to thank Rob from Hey for organising a lease agreement for me, having a well written lease is extremely important as it protects yourself and your investment.

About Scott Jones

Scott hails from the north east of Scotland and started earning online at the end of 2000 building websites for local businesses during which time he won an award from Lord Alan Sugar for Excellence in Enterprise. After having quite a bit of success with domaining Scott mainly runs educational evergreen websites which generate over 3 million visitors per month but is always on the lookout for a fresh thinking out of the box way to turn a buck. Follow on Twitter.

Comments

  1. That is a very nice return. I know you’ve worked really hard (well Elaine has :) ) building this side of your business so congrats, it’s well deserved.

  2. When you lease do they return the domain at the end or can they buy the domain out at the end of the 3 or 4 year agreement?

    • For my first one there is a buyout option after 3 years which I don’t mind but for better domains in the future I would just be looking to lease for 2-3 years with a renewal option but no option to buy so that I can build a balance sheet and regular income.

  3. Nice work! You have mentioned that you put up a site and get it to rank, do you have any special method – content, tool, links from other sites that you prefer to use to build a rank?

    • Nothing special really, all links are good, relative links work better. I am going after main specific phrases though with the ideal domain so for example LED Bulbs doesn’t need too much work to rank No.1 in Google.co.uk

  4. Do you use the standing lease agreements, or do you enforce custom agreements that better address the AntiCybersquatting Consumer Protection Act (ACPA), the Lanham Act, etc. ?

    • I had an agreement made especially which does cover things like use of the domain,mis-use, legal disputes, infringement of 3rd party rights that ensue and the DRS. I am just dealing with UK domains and Nominets DRS procedure.

  5. This is simply an AWESOME idea!!! Is leaseadomain.co.uk your creation?

    • Yep, that’s my domain Justin with a few that I had listed, I have a few domains in the wind that I am trying to tie up that would be very leasable if ranked.

      • What sort of ranking do you wait for before leasing? I have a site that’s on the first page in MSN, second in Google for a few popular product-based keywords. Should I wait until it’s on the first page? Should i wait until it has PR?

        • I wait until I get onto Page 1 of Google.co.uk and then start sending out emails looking to lease it. Nobody cares about PR – if you offering a second shopfront to someone and they can see you rank on page1 in Google that could be enough to get some dialogue going.

        • Interesting – you send out emails. Do you just look for sites that are ranking much lower than yours, selling the same product? It would be nice if your domain leasing site or another becomes popular, so that there would be a central means of posting domains for lease. I’m sure I’ll be on the first page within a couple of months.

  6. I think it is 4th in Google.co.uk for ‘lease a domain’ so it’s good to have a main site like you say. Yep I had the wife firstly target Adwords advertisers as they don’t organically rank but obvioulsy see value in paying for traffic, after that she emailed peopel from page2 onwards that sold the products.

    • Awesome, that’s what I’ll do then. And did you just change the DNS settings to their host? Or did you give them access to change the current files?

      I’m on page 2 for a very popular health product, I imagine that I could lease it for a good price :)

      • I retain ownership so just update name servers to point to whatever host they wish for the term of the lease. The pull is people who sell products have the biggets margins, better than affiliates and better than using Adsense – they can make the money and afford to lease.

  7. Crikey, this blog post is in the top 10 in Google.co.uk for ‘lease a domain’ – that’s fast indeed.

  8. This is an excellent idea. You have some really nice domains for lease on leaseadomain.co.uk

    Glad it is working for you.

    Ray

  9. Cheers for the link – hope it works out well, certainly is a good ongoing strategy.

  10. On tools for finding candidate web slums to renovate for lease to upmarket clients, I just found Site Finder 301 after reading an interesting guest post at bluehat.

    It inspects entries in DMOZ and internet archive to find sites that are inactive or abandoned. The assuption is that you might find a slumlord willing to sell up and run.

    I can’t wait to climb into the code. It seems to work very elegantly.

  11. Great resource post. Simply opened my mind to a concept that I had not heard or thought of before. Great tool offered by Nafi, it gives the opportunity to target domains that may not have popular names per se but certainly offer relevancy to the new domain owner. Targeting niche domains and getting relevant ranking and listed in directories will certainly increase the value of the domain. I believe clients will appreciate if this effort is exhorted to improve the ranking for the domain.

  12. Good concept, great explanation!

    This is an especially good option if you’re looking to develop the domain in the SERPs at the same time, given the leaser is pro-active with their use of the domain.

  13. Not sure how this really work. what’t the difference when I can simply park my domian and have it pay for itself. When you lease do they return the domain at the end or can they buy the domain out at the end of the 3 or 4 year agreement? Win-Win situation I guess for both parties

  14. hi – i have around 30+ domain names which i own and have had a few thoughts on perhaps renting/leasing them out. do you have any further advice on this or sites you could point me to in order to advertise my domains for rent/lease or do you think its best to create my own site to dosp – any help would be hugely appreciated. domains range from .com to .co.uk (for example: b2c.co.uk) is just one of the domains. thanks in advance, any help appreciated! juliej

    • Your probably better to create on central site Julie and send any traffic from your unused domains there as a showcase to get enquiries from but more than likely you’ll have to find end users at present rather than them finding you.

  15. Thank you Scott for a great post. I was researching leasing domains and came across your words of wisdom. I did notice that this is a couple of years old now and was wondering if you are still in the leasing business, and how it was going?
    Kim

Trackbacks

  1. […] lease later on and as you can see from a recent post led bulbs is doing just fine and my plans to lease a domain and increase it’s value were in place for a later date, I had just pencilled in developing ledlightbulbs.co.uk into a […]

  2. […] 2 months later in October I had my first domain leased out […]

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