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Introduction to Domain Flipping

The booming real estate market of the early 2000s catalyzed the concept of "house flipping" - buying a home in need of repair, quickly making the renovations, and selling it for a profit. In the current market, house flipping has lost its allure as slumping home prices make any real estate investment a greater risk than ever before. Sellers outnumber buyers causing home sales to buoy towards the buyer as sellers try to get-out of once-profitable investments.

Many real estate investors have moved their money into the stock market or mutual funds seeking a safer, albeit less profitable, investment. One thing is clear - In the current real estate market, the limitless potential that existed just a few years ago, is gone. Luckily, there is a booming market emerging as we speak; it takes learning some new ideas, but is the only market where 5000% profits are the norm.

This is about Domain Flipping. Hopefully this term brings to mind house flipping as the two are analogous. The only difference is that one takes place in the physical world and the other in the virtual. It is very important to understand how these two are similar so that you can fully understand the idea behind Domain Flipping.

A domain name is simply the word (or words) between the www and the .com (or .net, etc). I think of a domain name as land. This is a piece of raw, undeveloped territory on the Internet. I think of a website as a house. When you put a house on your land, the value goes-up. So, as you would expect, when you put a website on your domain, the value goes up.

Location is paramount in the real estate market. The same is true for the domain name market. The difference is that the domain market defines location to be traffic to your website. Traffic is simply unique visitors coming to your site. The more visitors to your site each month, the more valuable your domain. This is why domain traffic is analogous to location - living in a nicer area demands a higher price. Websites with high-traffic are the equivalent to your Mansion in Beverly Hills.

So what is Domain Flipping? Domain Flipping is the process of purchasing a domain, putting a website on the domain name, and then building-up the monthly traffic coming to the site. Domain Flipping requires a completely different skill-set from house flipping. Domain Flippers need contractors that can get them people to build websites, people to list a site in search engines, and people to develop solid monthly traffic to the website. Just like the house flipper needs a contractor to get plumbing, electricity, roofing, etc. completed, the domain flipper needs the same in their arsenal.

There are new top level domains coming-out that have some great potential for future profits. For those new to domain names, TLDs or Top Level Domains are the .com, .net, .mobi attached to the end of your domain name. We all know .com, .net, and .org but there are more and more TLDs becoming available such as .mobi, .cc, .ws and many more. These domains offer fresh starts for new domain investors to take their piece of the virtual pie.

The profits realized by successful domain flippers can be staggering. Recently, a domain name that was purchased for $40, was professionally appraised for $2,800 after the flip. Domain Flipping deals with profits in the 1000%-10,000% percent range. With the right team or a bit of web design knowledge a domain flipper can emerge and try their hand at the next big real estate boom. Like any investment Domain Flipping takes time and energy. It is not a great way to get rich quickly. Instead Domain Flipping involves patience and timing, but with practice it can become a very lucrative investment.

Learn more about this author, Morgan Linton.
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