Investing in domains

Invest in domainsI remember a few years ago share clubs were very popular and they may still be, the idea of getting together with some friends and investing together always appealed to me, and it also looked like a pretty good reason to have a ‘meeting’ over a bar lunch 🙂

My mate Ian recently came round for a game of snooker and asked if there was anything he could invest in with me, and basically offered to put money into anything I wanted to try, Ian doesn’t do any business online so this really was a leap of faith and a case of wanting to do something different, buying websites had to be ruled out quickly as I would do all the work while he would just be along for the ride, his budget was around $5000.

Looking for an investment for the future to share with a friend led me back onto the path of wanting an, an is basically letter – letter – letter .com and seeing as they are all long since registered they now increase in value.

The payoff would be to own an that would fit a business name acronym and eventually sell to an end user, this year the demand just between traders has been brisk and I have tried to keep my eyes out for a half decent one for a while with no luck. Prices seem to range from around $4000 for one with poor letters in it like QXZ to around $15,000 for a very nice one.

Some recent sales of to end users

  • AMT – $100,000
  • BCF – $71,200
  • IAB – $67,250

The above 3 domains would probably be out of my budget even at reseller prices which I would guess to be nearer $20k. LLL or 3 letter domains are increasing in value every month this year and according to are up $250 in the last month.

Current Observed Minimum Wholesale Price (regardless of letter combo) as of June 1, 2007: 3-Letter .com – $3700 (+ $250 since May 1, 2007 report)

After discussing all this with Ian we decided to go after an with 50% ownership to hopefully store it away for a few years as an investment.

Good hunting grounds for such domains are the usual domain forums

Other useful sites for research are

I found a few I liked and bid on one for $12,500! which I lost out on, offered $11,000 for another and it was sold while I was sleeping for $11800. I saw someone buy an LLL for $8k in January and get offers over $10k in May. The demand at present really is quite high for the good one’s.

In the end I managed to do a deal by PM with a good seller for VDF which cost $9k, it would make a very nice start to our investment portfolio. It was also first registered in 1993 which makes it by far the oldest domain I have ever owned. We plan to save up money again and hopefully in 3 months or so we plan on getting another one and if we ever sell along the way then we would re-invest in more.

No matter how good a friend though if you ever contemplate the same you should be advised to get an agreement or contract written up just in case things go bad, we may both sign a document stating our 50% ownership and that if one wants to sell the other partner gets first refusal to buyout, knowing us we should also put something in about not being able to gamble the domain ownership over cards or snooker 😉

Good domain names  are probably the only stronghold that have risen faster than property prices and investing in a decent in my opinion is safer than stocks & shares and comparable with land and property, it is also simple and zero maintenance so offers an easy route into investing money without wasting any of it on fees, you could do this with as many friends as it took to raise the capital.

Share moneyI’m lucky to have a great friend with the trust in me to pay half the money into my bank while I did the deal on our behalf, just like I am lucky to have gone into partnership with Al here and on other sites which takes and builds a lot of trust, it is easy to think that by going into partnership you may be splitting the profits but do you know what? when you make money or do a good deal it really is a great feeling to share it with someone and while Ian and I wait for our end user LLL owner to find us with deep pockets we may well have to have a few ‘business meetings’ over a pint or two to discuss the state of play 😉

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.


  1. And what about domains with numbers and Are they worth it?

    • dont have numbers, they would then be LLN for letter – letter – number, significantly less in value if you add numbers, are trading for high $xxx to low $xxxx and look to be gaining in value. Ultimately the com’s will always the most expensive.’s are still cheap just now though at around $100 you could snap up a few for good one’s at good value.

      • I thought I was doing good with my new, look like I need to ratchet up the game to get in the real fun stuff. I have a hard time imagining someone offering me 200k for it, but maybe in a decade and with it built out – who knows.

      • So what strategy would you use for ? Do you have some companies in mind when you select the letter? Or do you just pick likely letter combinations?

  2. Congratulations on the investment! Let’s hope the prices continue to rise!

  3. I am planning on starting a small bussiness simmiler to what you are doing. The only diffrence is that I’ll start with a much smaller budget ($300). I’ll buy them, build links/PR/Contents and then sell them on for a profit.

    Hopefully one day I’ll get to

    Good luck with your investment

    • That sounds a very good way to do it Abdul, I have basically done it with flipping sites to raise some money that I am happy to lock away in an LLL for a while, you could do exactly the same with domains, let me know how you get it.

      • So far I have made a net profit of $300 of developed site sales, and thats what I put back into the busniess

        But I am going to didicate my self to it after GCSE’s using my $300 to hopefully gain more and reuse it.

  4. How do the priced compare to LLLL, LLLLL and LLLLLL? I have seen some nice larger domains go for sale due to being good words. I am guessing LLLL could do well if it was a word, but not an abreviation.

    • Many thousands of businesses use acronyms for their company name, would you rather type in or, also LLL’s are rarer with less combinations than LLLL’s so that adds huge value to 3L’s. At present short – medium term there wouldn’t be a huge markup for 4L’s and less buiness use but they would be good for the long term. From what I have seen people seem to like constanant vowel constanant vowel like, haven’t looked too far into them as yet but I am always looking for longer term security and investments to aid retirement 🙂

  5. I must have a mental block when it comes to investing in domains. I like the idea, but anytime I go to buy a domain name, if the one I really want is taken I move on. The thought of speculating on a domain with serious money is hard to get my mind around.

    • I view it just like buying land Jay, and in this town the good land that’s easily accessed is all sold and all has permanent planning permission on it, and the value just keeps rising AND more people keep on moving into town and the demand keeps rising. Either that or I’m going to be living in my very own ghost town 😉

      • That’s a good analogy. There is a limited set of real estate in domains. Part of my problem is that I’ve been on the Internet since the debug of Mozilla, so typing in longer domain names is no big deal. But to people like my Mom, is much easier than

        • I like the busy street analogy, for some reason I thought it was still a few years away. Now I can better understand when I hear of others who have gone out and registered a domain and then sold it right away for 10k!

        • Love the analogy! Lets hope your town does’nt turn into a ghost town.

          I think you’ve got a pretty solid investment there, there will always been a demand for this kind of name.

          Best of luck with it.

        • Thanks Ash, hopefully I can make a good profit and get a round in 🙂

      • Have you planned for capital gains tax on the domain, or are you just assuming (probably correctly) that the tax authorities won’t check up on a domain name sale?

        In Australia, there are various exceptions and rules about capital gains tax for businesses, especially small businesses, and more rules for trading stock. It would be interesting to see how your (Scott’s, Abdul’s, and others’) domain name properties would fit into existing laws.

        • Hi Pat, yes we are subject to CGT here as well, any tax means a profit though! This is a personal investment with a friend though and not part of my businesses.

  6. Err…that should have been “debut of Mozilla”. Unless that was a Freudian slip. 😉

  7. Congrats on getting LLL domain, do let us know if you get any good offers or sell it.

    • Certainly will Yogesh, the good thing about this post is I can always refer back to it now at a later date when a good offer comes rather than the normal reflective posts after the event.

  8. I have been watching domains for some time and never really looked into the resale market. I did not know there are so many places dedicated to this type of trade. Thanks for the links, will be trying a few’s soon.

  9. I think an is a little out of my price range, and will be for a while I expect.

    What is the next best thing to look for, or should I (and others like me) concentrate on the small fry and build up to a good purchase later down the line by making mini sites or buying sites to develop?

    • It sounds like that is sort of like real estate. If you can’t afford it now, and prices keep going up 20% every year, you’ll never be able to afford it.

      Unless we get another bubble

    • Garry, perhaps you could go for short addresses on various country-code top-level domains. You can probably get three-letter domains on .au, .ws and all the rest, or find some amusing little word that includes the country code, like like

      While short .com’s are prized now, in future there will be more participants on the Internet so short addresses on other top-level domains will become more valuable.

      Think of it like buying up real estate in a small town, so you can profit when that small town becomes a large one.

  10. So is it worth it to spend some time building up the links to the site and giving it some rankings? Or do you figure that the company will have no interest in rankings and just go for the name?

    • I will likely try and get the homepage ranking Scott, may take a while after its been parked but I won’t worry too much as an end user would be branding it themselves.

  11. – any ideas for what this will stand for yet?

    How about ‘Venereal Disease Forums’?!?

    – Martin Reed

  12. Hi Scott, SMM has bee a great resource over the past couple months and I really appreciate your guys’ transparency in regards to very specific things that helped and hindered your web ventures. But, how do you foresee this post affecting the future sale of your newly acquired
    As a prospective future purchaser I would research the history of the domain and inevitably stumble across this thread and see how much originally you paid. Myself, I would use that against you as a way to keep the profit margin much smaller than it *could* be. I would prefer obscurity with these kinds of transactions… But I hope I’m wrong and you guys make a killing when Virginia Data Ferrets goes public and wants to pony up for it!

    • Hi Alan, fair point but many domains including LLL’s trade openly on forums and such with actual sales documented, if the domain was researched I am sure the forum I bought it from would also turn up. The value of the domain now isn’t really the issue for me and in a few years time today’s value wouldn’t be something I felt I had to try and hide. An end user would always be more motivated to buy than I was to sell, in 1993 the domain cost $15 but that didn’t effect how much I had to pay for it last week, the scarcity of LLL’s should make them increase in value in their own right regardless of use or history.

  13. I would love to get into domains, but it seems like it’s too late in the game for a newb. These days, I can hardly register a longtailed domain.

  14. domains have been one of the best investments of any type over the last 7 years, and they continue to increase rapidly in value as more and more of the limited supply (17576 possible combos) fall into end-user hands. Many thousands of dollars can seem like a large investment for an, but the strong percent returns are consistent and staggering with no ceiling for returns. Further, I have yet to meet anyone who’s ever lost money with an domain.

  15. Wow, I never really thought of comparing an domain with real estate but it does make sense.

    I wish that I could afford one, it’d be a great investment.

    Also, has an LLL domain ever been available? Like someone forgot to pay.

    • Yes that happens but there are industries setup to catch such domains and they then go to th highest bidder so you still end up paying $x,xxx’s for an that expires Gary.

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