What is Domain Investing? – A Guide to Buying and Selling Web Domains
Domain Investing (or “Domain Name Investing”) is the practice of buying web domain names, to then sell on a later date, with the intention of making a profit.
Domain investors purchase domain names today now, in the hope that there will be a demand and a willing buyer for those names at some point in the future.
Alternatively, an investor might buy a domain name with the intention of selling on, near immediately, if they feel that that domain name is undervalued and they can get a better price for it elsewhere in the current market.
Interested in finding out how to register a domain name? Then read our post here on How To Buy And Register A Domain Name in 2021
Domain name investing is not too dissimilar from any other type of asset investing. You are simply buying an asset which you believe will either appreciate in value as time passes, or which you think you can already find a better price and buyer for.
The same principles are at work in the real estate or stock markets. An investor buys property, land, or shares – and intends to sell them on for profit, or hold them as their value appreciates.
Domain Investing – How Domain Investors acquire domain names
Domain Investors typically acquire new domain names in one of several ways:
- Buy direct from existing owners (either through a broker, or direct communication)
- Register domain names which haven’t yet been registered, using a registrar such as GoDaddy or Namecheap
- Or, by buying expired domain names
Of the three options above, purchasing domain names which have previously expired is one of the more common routes to building an investment portfolio of domain names.
Domain Investing – Domain name expiry
Every domain name ever registered can effectively be considered ‘on lease’.
That is, they aren’t owned outright in perpetuity. Owners of a domain registration may renew their registrations each year, or pay for multi-year registrations, but ultimately – if they fail to keep up the renewals (and fees), their registration can lapse and the domain can be disassociated from them.
Each month, millions of domain names go through this process. Their ‘owners’ fail to renew their registration (either unwittingly or on purpose) and the domain name is returned to the publically available ‘pool’ of domains available for purchase.
Released to the public
There is however, a ‘grace period’ after a registration period has elapsed, whereby the current registrant can still recover and renew the name. This might typically last for 30 days after the expiry date has passed. After that, the domain is released to the public and made available to any domain registry to advertise for re-sale.
Each month, millions of domain names expire. Typically these are domain names, which people decide they no longer have a need for, or want. It’s quite common for people to register domains one year with a great business idea or opportunity in mind, only for them to then move on or for the idea to have gone no further by the time renewal comes up the next year.
To help with your domain investing efforts, we also have a Quick Start Guide to Domains and Hosting in 2021 which is a great companion article on how to approach domain names and hosting for new starters.
Domain Investing – Tools for discovering expired web domains
When it comes to discovering recently expired domain names, there are a few useful free online tools to help! These include websites such as:
All of these sites are known as ‘drop-catching-services’ and operate by automatically pulling in data feeds of recently expired domains, and compiling lists of domain names eligible for re-registration.
Typically, most domain names listed on drop-catching sites will be available for registration at the base cost (lowest rate offered by each registrar), however some services will automatically assign certain domains to an auction if they are deemed high value or high demand.
Access to expired domain names is largely a level playing field once the names become listed on domain-catching sites.
One of the biggest issues involved is time – can you snap up that domain quickly, and before someone else spots that it has become available? After that, investors need to figure out how to identify and separate the good names, from the not so good ones.
Investors might employ all manner of domain buying strategies based on industry vertical, keywords, TLDs. Alternatively, they might simply be on the lookout for specific combinations of words which they think will be relevant to emerging industries or products in years to come.
Domain Investing – What makes for a potentially valuable expired domain name?
When buying an expired domain name tom then sell on, you’ll want to try and make sure there is a market of potential buyers, and that the name has utility and relevancy to make it a valuable proposition.
A few factors you might want to consider as a means of estimating the value and market demand for a given domain name:
- Domain name contains keywords with proven search traffic – Domain names which either match or contain common search terms and keywords will often be of higher value and in demand. There are a number of online tools which you can use to determine Google search volumes for specific keywords and search terms.
- Domain name is short, easy to remember and spell – This is more a common sense and practical issue. Most people will only be able to recall short domain names which read logically and are easy to spell. The downside to this though, is often that these names are more generic, and have often already been registered.
- The same or similar variants are already registered in different TLD extensions – If a domain name is already well used across a range of other extensions (.org, .info for example), then this can often be considered a good indicator that the .com variant will be a valuable investment for instance. It’s also often the case that owners of those other domains will be keen to buy up the matching domains in the extensions, which they don’t yet have (i.e. the one which you’re about to acquire!).
- Domain name doesn’t contain any hyphens – Hyphens might be present in a business or product name, or provide a ‘near-match’ for your ideal domain name, but as a rule of thumb they aren’t a good idea for domain names and won’t sell as well.
- The domain name is old (has been registered previously for multiple years) – a domain name being old doesn’t immediately equate to it being more valuable. However it is generally the case that the more popular domain names, and those which people continue to find valuable – were originally registered early on, and continue to be re-registered year after year.
- Domain name contains recognised dictionary words – Another common sense consideration. Most businesses or products are best described by widely used common language keywords. Domain names with unconventional spellings, or unique names altogether, often aren’t easy to remember or search for, unless they’re already well established and associated with a known brand.
- Domain name has previously accrued significant backlinks – If a domain name has been registered previously and proved to be of value in its former life, it’s highly likely that it will have accrued a number of backlinks from other websites. If a domain has a high number of backlinks then it will likely be benefitting from the domain authority accrued and will be in turn more valuable because of this.
Domain Investing – Searching through databases of Expired Domains
With such a vast number of domain names expiring and re-entering the market on a daily basis, how do you apply your search criteria and find your golden egg?
Thankfully, some of those same drop-catch sites offer bulk search tools just for this purpose.
Probably the best site for this purpose is ExpiredDomains.net. Here, you can select and apply dozens of filtering criteria and instantly apply them to a database of the latest expired domains. Typical filters include TLDs (i.e. search for .com, .info, .org etc.), domain name length (character length), number of backlinks, and age.
The bulk search facility offered by ExpiredDomains.net is free to use. Although we have found that it sometimes breaks or limits searches if you search too often from the same IP address.
Like many other drop-catcher sites, ExpiredDomains.net generates its revenue through referral fees if you then click through on domain name results and register the names using one of their preferred registrars.
Best of luck hunting and trading domain names!
Domain Investing – Want to read more on the subject of buying an registering domain names?
With all the different types of domain name out there, it can be quite confusing at times. To help with that, we’ve written up a post on Different Types Of Domain Name – A Quick Guide for 2021
If you’re looking for a guide on domain name registration, then check out What is Domain Name Registration? – Easy User Guide for 2021