2 more domains leased

For those of you keeping up with my domain leasing attempts I have 2 more leased out in the last couple of weeks, both @ £50 per month, one on a 2 year lease, the other on a 3 year lease, one domain was caught for £5 the other cost me £700. That takes the total to 5 domains leased out @ a total of £775 coming in per month.

Overall thoughts on buying domains to lease recently are pretty much unchanged:

1. Make sure the domain encompasses a whole or substantial part of a business, it has to be attractive to an end user to build a second store front on, don’t try to get into too small a niche.

2. Make sure the niche you choose has a lot of players or potential end users, your going to need a big audience to find the right person with vision, I sent out around 30 emails last week and in one reply where I was asking for £75 per month the reply stated he would buy it for £75! When speaking on the phone to another potential end user he was shocked the domain I was trying to lease cost me over £1000, those are hurdles that still need to be tackled.

3. Again if there is a fee paid for the domain which is usually the case with good domains I try and get that back or most of it back within 12 months and therefore look to lease out for 2 or 3 years.

4. The domain needs to be ranked for it’s name, of the 5 leased out, only one was not ranking top 10 for it’s name, it’s that added value that helps make a deal just now.

That’s probably all the progress I’ll make with that side of my business this year, next year I need to crank it up and I have a lot in the pot that I have been working on all year quietly so I really want to aim to take it above £1k a month and towards £2k a month. it’s certainly not get rich quick but once the time & effort is invested if I have 10-20 valuable domains leased out in the future making an income of 4 figures a month it would make that side of my business pretty valuable considering the investment would have paid itself back within 12 months, that business would be valued on a multiple of it’s income and the fact that the capital assets appreciate in value each year. It may be an option to sell the busines as a going concern one day or just live of the income.

Recap/timeline on the last year for domain leasing.

  • It was August last year I made my first post where I considered the idea: Become an internet landlord
  • 2 months later in October I had my first domain leased out
  • In January 2008 I put in my to do list for the year “I would like to progress with leasing a bit more so would look to have at least 2 domains or sites leased out on long leases to expand on what I have started there and prove to myself it can grow.” 
  • I knew ranking and buidling some value into the domains would take time and hamper progress in 2008 so it was nice in May to lease out my second domain.
  • After leasing out the second one it really opened my eyes to the added value this gives a good domain.
  • It would be November before my 3rd, 4th & 5th lease would come, no surprise, I expected a year of buying and working on them before I could get down to realising them as assets.

All in all from a standing start around a year ago to get to £775 per month is fair enough, the first year is certainly the hardest and next year should offer more opportunities with more money being spent advertising online. Almost all my domain buying has been done in the last 12 months – it’s been a big shift for me but I think the fact that I have detailed a great deal of it on this blog shows it’s certainly not too late for anyone, there is opportunity if you have motivation.

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. Nice job Scott. £775 is not something that’ll make you rich but if you can duplicate the process 10 times more that will be a nice sum each month.

    Mikael’s last blog post..Case 2008 afslutter november

  2. The thing to remember that is recurring almost gaurenteed income as well. It’s not like a blgo where you need to keep turning out the content to keep it ranking or a forum needing constant moderation.

    A really clever way of doing things…

    kelvin’s last blog post..o2 3G Mobile Broadband Internet Dongle Review

  3. Interesting! That’s pretty sweet. I guess the major drawback to this is actually finding your customers. How do you go about doing that?

    Jason’s last blog post..Find Out What People Are Asking Search Engines

    • Yeah that isn’t as easy as it should be, I try others in the top 50 in that niche, Adword users, Yellow pages, still looking and trying new methods.

  4. A couple questions:
    1. You say that it needs to rank for its name. That’s pretty easy. I’ve been trying to get my sites to rank for main keywords though, as in “Toronto [service]“, and then leasing it. I’m almost there. It’s a lot harder work, do you think it’s worth it?

    2. How can you differentiate who is a potentially valuable lead, and who you’re wasting your time with?

    Justin Cook’s last blog post..What is Google’s new SearchWiki?

    • 1/ I make sure it’s main keyword is it’s name, hence the inherent appreciating capital value and investment at the start. It’s worth it as for me clearly a keyword domain that ranks is more than the sum of it’s parts, having a keyword domain is nice, having a poor domain rank top 10 is nice, having the keyword domain rank top10 is better than both the others combined.

      2/ I hardly get any leads/enquiries, if I do they usually are hot and productive, I wish I had to worry about quality of leads, just now I need more quantity.

      • Would you lease it for more if it’s a keyword domain ranked top 10?

        Justin Cook’s last blog post..What is Google’s new SearchWiki?

        • I only use keyword domains which mean usually buying them and depending on how competitive/lucrative the market pricing varies and it’s no exact science, so I try and get my domain investment back in 12 months by ranking and leasing it knowing the asset will appreciate and in year 2 onwards it’s profit and residual/hands free income.

  5. That’s a nice steady and reliable income, as we head into a global recession it will be good to have a regular income (provided the people leasing dont get into difficulties).

    What sort of page rank and traffic are these domains getting? Do you price them based on combination of traffic and percieved value of the key word?

    • some have no pagerank, traffic is generally low, I’m after sensible domains at sensible prices that can make great shopfronts for real businesses and describe their main product or service so yeah if there is a lot of value/traffic I would have to price it accordingly, I have a couple that I would look for £200 per month that should be ready next year.

  6. My personal feeling is that it’s really difficult to break into. Luck, vision and capital are huge elements of being as successful as you’ve been.

    I’m struggling to bring in a decent income from my sites, so I have nowhere near the capital to re-invest in domains.

    Dan @ PowerDosh.com’s last blog post..Avoiding 3 Business Mistakes made by Woolworths, MFI and Fudge Retailers

    • You may need to borrow to buy the ‘land’ I wouldn’t think this could be done on reg fee domains. It’s a business model by itself, if you borrowed £2500 bought a cracker of a domain, got it ranking for it’s name and leased out then from the start you could be looking at within 24 months having any capital borrowed paid back, a regular income and an asset rising in value, also any interest would be tax deductible. I have a site I bought with a friend which has performed poorly and he is complaining his capital paid in may take 3 or 4 years to be paid back – it’s easy to get complacent but try and think of any other industry you can buy into and get your money back in full and still own the asset within 2 years done from home on a budget.

  7. Hello Scott.

    I’ve followed your leasing posts since you started, and your answer above answered my main querie. So bascially get a good domain, put on a basic info site to get a decent position on google for the keyword and then approach prospects..

    Do you add any adverts on your websites saying lease this domain etc?

    cheers

    Mally

    • Hi Mally, sometimes I have put it in the title tag and used the pagepeel script to advertise but to date nothing came in that way, generally those that leased were not looking for a site to lease, I contacted them and gave them an opportunity they did not realise or consider existed. Perhaps one day they will chase us :)

  8. Nice work Scott, I’m 5 domains behind you and spent over £300 so far on ranking a domain. It’s still progressing through the SERPs but I hope to follow in your footsteps in due course!

    Well done buddy.

    Khalid’s last blog post..November 2008 Earnings

  9. What techniques do you use to rank a domain (that work)?

    Dan @ PowerDosh.com’s last blog post..Avoiding 3 Business Mistakes made by Woolworths, MFI and Fudge Retailers

  10. Nice work Scott. Always an inspiration. I’ve made half-assed attempts at leasing out a couple of my domains, but it’s really tough. End-users don’t often respond, and when they do, they tend to under value what’s on offer. I’ve been in the business of generating leads through direct email for a long time for my full-time job. Your conversion rate – 30:1 – is very good. In the pat, I’ve often sent out 300+ emails and received 3 responses that resulted in 1 job. And my emails were highly targeted and personalised. It’s a numbers game really. All lead gen is.

  11. The beauty of this is scaleability. Once the sale is done, the lease just brings the cash in.

    Ian’s last blog post..Stitch’s SuperSonic Celebration coming in April 2009

  12. Hi Scott

    You’re still my hero!! It also seems a no-brainer alternative to parking. After catching domains for 5yrs the protfolio is relatively strong in .uk but return weak – with most parked. Do you convert them to mini-sites first, get them seo’d & indexed, & then go out and find leasees? The only issue is making sure the domain is a keyword-rich generic with no competition/drs potential.

    S

    • Yes that’s exactly what I try and do, doesn’t seem a market ready yet just to lease a domain so to add value it needs to have a small site to enable it to rank, doesn’t need to be no.1 just top10 or 20 I’d say, I agree the keyword has to be pretty clean and fit for purpose. You have the added advantage of having probably all the domains you need Stephen but I have to buy them sometimes for hundreds sometimes low x,xxx to try and make a business out of this.

  13. Scott, have you thought about outsourcing the lead generation? Following the domain broker type model might work out for you allowing you to concentrate on developing new domains, then paying commission once the broker has found a customer?

    • I don’t think I have come across anyone that does domain brokering to a good level that’s proactive that I trust so I’m not sure if it’s a service out there I could use but it’s certainly something to consider.

  14. Really interesting Scott, thanks for the update!

    I should get my arse into gear and try it myself …my porksausages.co.uk domain is ranking top 5, so that’s a start :)

    I know you’re developing pcs.co.uk as an income stream, but I take it you’ve got revenue coming in from other affiliate sites or suchlike?

    John’s last blog post..Parked Domain Gives Wrong Impression

    • Yes I have other sites that generate income which keep my house so most of what I talk about here is me trying new ideas and building for the future.

  15. Thanks for the update Scott. It’s great to read your progress, as a relative newbie to domaining. Have you thought about marketing the expertise you’re developing in domain-leasing (it’s a rare and valuable skillset)? Maybe provide a service to other domainers, or an ebook or membership site (the seobook model)?

    Cheers, Jon

    Jon’s last blog post..New Product – Recession Proof Salon Marketing

    • When I work out what I’m doing perhaps one day I’ll offer a service for others, that would be nice, for now I need to establish more domains & sites and make a full time income from this one business before I can feel qualified.

  16. Scott, congratulations on your success with domain leasing. Don’t know if you remember me but I contacted you via email about your tattoo site. I read your timeline and it’s amazing how much progress you’ve made, as it can’t be easy doing research, developing, finding leads, drafting and sending letters to end users. I’m watching and cheering you on from New Jersey. Best regards.

    • Thanks Faye, the good thing about the blog is that it’s interesting for me to look back and piece the timeline together to keep check on whether I’m heading in the right direction and making progress.

  17. I just came across your site. I had never heard of domain leasing before. Thanks for the interesting and informative posts on it!

  18. Coming from a purely affiliate based site background i find it interesting to see other ideas of generating income from domain names. Definately worth remembering for in the future.

    I would usually see little potential in a domain such as John’s example of porksausages.co.uk from an affiliate site point of view, but from a leasing point of view i think given the right push it could attract plenty of attention from businesses comanies working in that area of the market.

    Food for thought….

  19. It’s a good business and unique too. Great going scott.

    lucy’s last blog post..Sony Ericsson T303 Pink

  20. I own over 700 domains atm, and seriously I must start doing something with them.
    Your post is an inspiration, still I need some high-end domains instead of just some random letter stuff.
    Can someone outside UK easily register or take ownership of a UK name?

    Thx.

    Database Guides’s last blog post..Installing your first WordPress script

  21. Great job. One question. I have some fairly good generic UK insurance based domains as this is my main industry. Would you build a small site, get it ranked and then

    a. lease it
    b. sell it
    c. use it to lead generate and sell the leads

    What would you preferred option be?

    I am in a quandry which way to go as I can see the value in all three but which one is the easiest to achieve and in your opinion the best.

    Thanks Guys…

    Jason

    Jason’s last blog post..Cloaking links with ImportCSVPro

    • A or C, you may have contacts which make (C) more appealing, for me that part of my business is a clear buy,part develop and lease to create a stable income with naturally appreciating assets so for me it’s A. However the easiest would probably still be B :)

  22. Hi Scott, just a general comment, I notice that the number of comments on posts have shot up since that competition you guys ran for the blogging book. A post about how that was promoted and the results would make for an interesting post! Also, really apreciate the time you take to answer all the comments on here, good for repeat visits :)

    John Essex’s last blog post..Permitted Development Regulations Update

  23. Scott,

    Do the leased-out sites manage to keep their first page rankings once your tenant adds their own content?

    John

    John’s last blog post..Meta Tags For Geo Location

  24. Interesting idea. Why buy a domain, or even set up a site and rank it, when you can rent that from someone else.

    • Scott

      You mention under point 4 that the key in the current market is to have a domain ranking in the top 10. This is by no means easy to achieve. How are you managing to do this consistently? Do you have a SEO background?

      Maybe a useful future post could be on how you achieve your SEO top 10 ranking. As such a ranking in any sort of competitive niche would require significant knowledge, not to mention work. I am sure people would be grateful for any tips you can offer.

  25. There was a good seo post a while back that I still find useful:

    http://selfmademinds.com/200709/seo-checklist-for-dummies/

  26. Hi Scott,
    I read your idea 2 weeks ago and recently purchase a domain thinking of working the same way you did :D
    However, I came across when you mentioned get listed top 10 for the domain.
    It’s definitely need a lot of seo works need to be done, but when you lease to someone else, they might rework the whole thing. Means the SEO no longer exist and the ranking will be gone too.
    May I know how you solve this or you just explain everything to your customer that it is their own risk?
    What about we just lease part of the blog instead of whole website?
    Thanks!

    • No the rankings usually do not disappear, in fact you can rank in the top 10 with zero content so what the client does is not a major issue. Remember it’s ranking for it’s exact keyword match domain name which is not that difficult unless you have just bought carinsurance.co.uk :)

  27. Really?
    Haha~~
    Guess this gonna be my tips of the year :p
    Great start of 2009!

    Hope you don mind me asking more details about this.
    The contract you prepare and sign with your customer is a “Complete Contract with Legal Actions” or just a short 2 pages contracts written by yourself?
    I’m an IT guy who work 8 to 6 everyday, din really go through such legalize stuff :)

    Oh yeah, I’m following your blog, looking for more 2009 tips of the year :D

  28. I bought my lease agreement for ~ £300 KC which covers the legal stuff,it’s around 4 or 5 pages I think.

  29. Hey Scott,

    I dont know how I missed this post when it was posted initially but i guess its never too late.

    Actually, I had a question. What terms of payment do you usually set for the lessee? Is it monthly/quarterly? Do you take bank checks from them or paypal? See I am from outside UK, and if I try to lease out one of my .co.uk domains to someone in UK, I will need payment terms pre-set. Just needed ideas how can i go about it.

    Also have you had any problems with your lessees not making the payments?

    Thanks,
    John

  30. And another thing, I would like to know how do you carry out the transferring of the domain? Is it something like giving out the password to your Cpanel? Because you need to retain the ultimate ownership and therefore the ultimate control (in case your lessee stops making you payments you might want to remove his content)

    I’m sorry if i sound stupid here but I’d be glad if you could help.

    Thanks,
    John

  31. If you use the search box top right for ‘leasing’ there are a few posts on this subject, I should really of categorised them, may go back and do that. I get paid direct into a bank account monthly, easier for tax & keeping track of. Two have prepaid 12 months in advance. I usually go with monthly standing orders setup by the lessee straight into my bank. You could go with paypal subscription, my wife keeps an excel doc with all the details and checks all payments come through each month and emails them a receipt.

    • I update the ‘name servers’ which points the domain to their hosting leaving me with full control. Don’t mind the questions mate, that’s why I post it here.

  32. The domain leasing plan sounds like a good one to me. All the while you’re building links and gathering reputation and authority, so when renewal time comes around you’re eityher going to get more rent, or sell / hire it out to the higest bidder. Sounds like a win-win to me!

  33. I own a few url’s which all rank top 10 for their own names, what would you suggest to use as a metric to understand how much I should be leasing the site out for?

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