Domain Leasing

Domain leasing I feel will continue to be one of my main focuses this year while others tick over, I am either having more luck or business owners are more receptive to new ideas in challenging times, either way I feel after a year or so of working quietly I am beginning to reap some of the rewards.

The premise for domain leasing for me for the most part is to buy a good product based generic UK domain, build it out as much as can be justifiably done to get it indexed and possibly ranking and then offer it as a second storefront to existing businesses, show them the advantage of a generic, high recall & recognition value especially when advertising, easy to spell, niche dominance and market credibility as well as some traffic.

The first year was mostly working on getting some good domains and after a great early lease it’s been odd pickings here and there to finally end up at £775 per month in income at the end of last year for a business built literally from scratch. 

This year needs to be the year I take this side of my business up a notch, the basic strategy which I have detailed on the blog is sound and I’ve tested it out enough times to feel happy with the principle. I decided in January my goal for this year will be to get up close to around £2000 per month from leasing which will be a pretty decent sideline, you have to remember that if I get it up to £24k annual income by the end of this year then not only is it a business earning pretty much £24k net passively, it also has assets that amount to far more than that, the lease itself increases the value of the domain hugely.

I’ve been asked once or twice to list domains for others and lease out for others but that’s not on the cards just yet, for now I need to ensure I’m getting a decent payoff for investing the time & effort needed to see a domain through from purchase to lease and that means ignoring the £15-£45 per month price bracket. One of my better domains was leased out this week for £500 per month, it was 2 long months of waiting to conclude the deal but it’s done and I’m very happy to have it wrapped up, I’m happy to say that for the most part I’m still working on the general rule of trying to get my capital invested back in around 12 months on a lease of 2 years+

Already done some more research and bought 2 domains, one for £600 & one for £800 which I feel are good candidates for leasing out at around £100 per month and I feel I have the inventory here to push on. Like I mentioned earlier I have had good feedback in the last few weeks when approaching companies, one agreed to lease 3 domains for £360 – not sure if it will come off and I can’t include it until the paperwork is done, I’d really like to get a few done this year around £100-£200 as they would add up quickly, however for now the confirmed passive leasing income stands at £1275 per month.

Edit: I created a category for domain leasing which started with this post some time ago!

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. Congrats. I could live on that.. (just) :)

    I read a lot and I’ve not heard this idea discussed anywhere other than here, although clearly it goes on.. just behind closed doors! I guess the take away lesson is that there’s still plenty of money out there, just not necessarily in the most obvious of places.

    • Thanks Peter, it also shows if you have an idea and can justify it as a clear advantage to a business then they do (sometimes) listen. Ultimately PPC & CPA/affiliate sales are fine but it’s the traders who have the mark-up that makes this workable for me. One of my lessee’s has leads flying in and is making a great deal more than I could on that domain which I am very happy about.

  2. When leasing, do you buy all this domains or do you also lease domains registered by you? If so, what’s the parameter you use? Just the domain name, having in mind if it’s a good product or do you also base your decision on number of searches per month?

    • I buy the domains myself and then lease them out, no set criteria but mainly product based domains that I feel can be applied to the internet and could justify a lease fee.

      • Scott – Im confused, do you then pay the 24.99 a year to names.co.uk and the like for a domain?

        Or when us “plebs” get a domain, are we just “leasing it”?

      • The concept of leasing domains had me confused initially, but after reading this I realize that I like the way you think. Letting your domains out to somebody else who is going to do all the hard work of link-building nad promoting can only be to your own benefit.

        Depending on how successful the other party is, your rent could increase significantly as they grow, or you can sell the domain to them foe a healthy profit. It makes much better sense than simply having the domain parked.

  3. Talk about passive income that is hard to beat. One could argue that these domain could easily make the same income from different kinds of ads or from selling affiliate products but you would get a lot of fluctuations and possible downsides (and upsides) when ranking changed. And then you would probably also have to put more ongoing effort into it.

    Mikael’s last blog post..Agents of Value – Outsourcing til Filippinerne

    • I have domains that I am building out and doing (trying!) affiliate sales so not closing any doors, the leasing is more attractive though for the points you make.

  4. Do you think the economy is helping with leasing?

    Where are the values of domains going generally at the mo?

    • I think it may make business owners more open to new ideas to dominate their niche or improve market share. Low end domains seem to have reduced in value as the free cash disappears, good quality high end domains are retaining their value.

      • It is quite funny how the virtual real estate market can actually mimic what happens out there in the real world too. The good quality high end properties usually reatin their value much better than the low end ones….food for thought, ain’t it?

  5. Recently, I´ve heard a lot about domain selling, but not about domain leasing. 775 a month is fantastic money (you´re right, for a sideline). Hope you can take it up to the 2000 mark. Is leasing a lot of work? It sounds like it could be pretty straightforward and a really good sideline to “normal” operations.

  6. I’m quite happy to say that based on your coaching I have leased out my first domain at $400/month, and doing the papers to lease 2 more for $2,000 per month!!!!!

    Thank you!

    Justin Cook’s last blog post..When digital theft is a good thing!

    • Bloody hell, piss all over my efforts why don’t you Justin ,lol. Good job sir, I hope they work out for you mate that would be a great achievement.

  7. I think there’s great potential here for someone to create a site to lease domains…like a Sedo type site.

    The only problem is people are looking for big name domains, these are expensive. Secondly, you need to find your own potential clients, this is hard and thirdly you need long term contracts drawn out…outwise you’d spend your time billing clients and chasing new ones when their contract expires.

    Also, do you check the sites regularly? Making sure they don’t like to blacklisted sites or display x-rated content/affiliate programmes?

    Giles Dawe’s last blog post..Nokia N97

    • good point about the risk of someone putting up dodgy material, I would of thought that as these are product based domains its very unlikey that anyone would put up anything to cause problems. More likely to have problems due to bad SEO I reckon.

      John Essex’s last blog post..Preparing for a Loft Conversion

  8. Very nice – congrats! So when people lease your domains do they do any marketing or SEO for the domain? I guess that if they do they are in fact increasing the value the value of your asset?

    John Essex’s last blog post..Preparing for a Loft Conversion

  9. Well done Justin. That’s awesome mate. Scott, in terms of penalties for nonpayment or payment delays, what do you have in the contract?

  10. I’ve been looking for a domain name. What’s the advantage of leasing over outright purchase of the domain name?

    • Hope I can answer this before Scott does 😉

      The advantages are that:

      – The background of the site would be setup already, pr, backlinks, aged domain, promotion etc., so you’re guaranteed to get visitors to your site.
      – Price. Scott’s leasing domains which you wouldn’t be able to get your hands on as they’ll cost too much to purchase/not for sale. They contain distinct keywords which you can’t find available.

  11. I love updates on this subject and I am amazed that still this is the only place I have heard of this being done!

  12. I didn’t even know this was an option. This way you get to keep all your hard earned work and reap the benefits for years to come. It just like leasing out a store front win a prime location, i am seriously going to look into this.

    Online Marketing BLog’s last blog post..Free Advertising for your Web site?

  13. I have to read more up on this concept of “domain leasing” because I still have so many questions. Are all of these WP blogs? Do you give the lessors full FTP and blog access? Have you already monetized the sites when you turn them over?

  14. Passive income is key to creating wealth, and your recipe seems to be doing exactly that, with the added bonus of growing the cash value of your domains at the same time. Definitely the kind of win-win situation I appreciate!

  15. That’s great, can you tell me how do you fix the price for domain leasing? Do you start with a highish figure then let the client bargain you down to their price, or do you price a domain on how many searches its keywords get?

    I’m thinking of giving it a go and have a domain made up from two keywords that got 60,000 searches last month and an averaga of 200,000 searches a month over the last 12 months, according to Adwords that is, and wonder what kind of figure I should be thinking about for leasing it per month?

  16. I think I will have to try and guess how much they’re paying through adwords for the search terms to come up with a price they might be prepared to pay. I don’t have a site on there at the moment either so I might try the minisite idea first before I try to get a client for it. I know you say you don’t want to deal on someone else’s behalf, but is there a chance I could email you the domain name to get a quick opinion on whether or not you think it’s worth a shot? If it doesn’t work out I will just put my own website on it, which is what I’d normally do anyway, but I’d like to try this after reading your blog. :)

  17. That’s fantastic Scott! It looks like you’ve already got a success. Are you leasing out the whole domain to one person, or subdomains to multiple people?

  18. please can you tell me is it ok to get domain and hosting from same company

  19. Hey Scott,
    Here’s a great thread on the Warrior forum that you might find interesting:

    http://www.warriorforum.com/main-internet-marketing-discussion-forum/70086-rent-site-simple-easy-offline-residuals-any-one-can-do-right-now.html

    Cheers,
    Tony

  20. PPC & CPA/affiliate sales are fine but it’s the traders who have the mark-up that makes this workable for me. One of my lessee’s has leads flying in and is making a great deal more than I could on that domain which I am very happy about.

  21. Hey Scott, did I ever get to ask you what has happened to Al? We miss him here (as well as miss your posts).

  22. That seems like a pretty smart plan. Though I expect you’d need really trustworthy person to do that with – I’d be a bit affraid of simply getting screwed over.

  23. I realize this is an old post but I just came across it for the first time. The idea of domain leasing is interesting to me and I hadn’t really heard of this approach before. How do you actually go about approaching individuals/companies to lease a domain from you? Do you leave it up to them to develop a site on the domain or do they use the existing content?

  24. I am about to start up a domain leasing company. We have over 2000 domains which we have been sitting on for years. This post has been really helpful in confirming a few ideas we had, thank you!

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