When it comes to investing, some strategies are commonly accepted as safe methods to build your investments. Investing in real estate or the stock market are always the most accepted as the mainstream route. They can set you up with a healthy investment portfolio, and there’s no denying it’s possible to get good returns from them.
There’s nothing wrong with taking the traditional investing route, but did you know that there are other investment strategies hidden on the worldwide web?
If you made an internet search for “best investments of the 21st century” you probably won’t see articles on page one about website investments. You’ll see the same old stuff such as real estate, bonds, stocks, home improvement, etc. Websites aren’t on many investors radars.
Investing in websites has many similarities to investing in physical real estate. You can buy the website and collect the income as you would with a rental property or you can improve it significantly and sell it on for a profit, just like real estate flippers.
Website flipping is based on the same concept as flipping houses – you buy cheap, make improvements and resell them for a profit. Both strategies can be very lucrative.
Here are some of the basics on how to get started investing in websites:
Where to find websites for sale
The internet offers plenty of places where you can find websites for sale. Here are a few of the bigger ones:
- com is one of the best-known marketplaces for websites. You can find some interesting deals on websites that need little fixing up.
- com is a popular marketplace for buying/selling more expensive and established websites.
- eBay is worth a look to see what’s available although you are less likely to find something there than the other two sites.
However, many of the best investments, the hidden gems, aren’t actually listed for sale. Use the internet to find sites operating in a niche you feel confident buying into. If you are into travel or sell vacations as part of your day job, for example, look in the travel niche. Don’t look for the big sites, especially if you’re just starting out. These are big businesses, and the owner won’t be interested in selling or will be looking for a six-figure price tag.
Dig deep in the search engine results. Some websites will even put a ‘for sale’ banner on their homepage. Find the webmasters that probably don’t take their websites too seriously but have been consistently adding new content over the years.
You’ll need to find sites that have potential, not poor sites that will take you an eternity to optimize or sites that are already optimized and making big money.
Buying the website
Once you find a site that you are interested in, start monitoring and studying it. Check the backlinks and investigate the website history and if it has a community (helpdesk, chatrooms, forums, etc.) have a closer look at what goes on there. Check the website design, keyword density, headings, and the structure of the links. Use Alexa rankings to get statistics about the site.
If you are definitely interested in buying the site, it’s time to contact the owner. Introduce yourself and say that you’re potentially interested in buying the website, then gauge how much interest the owner has in selling it. Like any other buying process, there is likely to be a negotiation.
You will need to know the details of website traffic, revenue, costs and all the current info which the owner may be hesitant to give out. Website valuation is an important phase so don’t rush into any decisions or part with any money without all the information you need.
When you agree on a price, don’t forget to look after the small details as you manage the transfer of ownership. Here’s a list of important factors to look out for:
- Have a contract made up detailing the agreement and have all the parties involved signed it. Consider drafting a clause to prevent the previous owner from starting a competing site soon after the sale.
- Transfer of the business name, domain registration details, hosting ownership, incorporation information, and any third party software to your name. Ensure that everything has your name on it by the time the deal is done. Using an escrow service is advisable.
- Outline how much support, if any, the ex-owner will provide. Having the owner available for a few months after the sale can make things less stressful.
- Download the email lists. There’s nothing more crucial in we marketing than mailing lists.
Investing time and other resources into your new website
Being honest with yourself is important. How much are you going to invest in your new venture? No investment is guaranteed regardless of how much potential it has. You need to be prepared by knowing the amount of money, time and other resources you can invest in the website.
Make sure too, that you have the resources to manage your new website. Remember that maintenance and the upscaling of your new web property will take time and energy before you can sell it or start earning revenues from adverts or referrals.
Remember that every new website comes with new responsibilities, server maintenance, support emails, spam control and regular activities of a webmaster.
Is investing in websites right for you?
Given the effort and time it takes to get a new website off the ground, the idea of investing in already established sites can be appealing. Once the website is up and running with a regular traffic flow, it’s fairly easy to earn passive income.
If you have a good understanding of SEO and your industry, then you should have no problem in finding under-optimized websites to buy, fixing them up and reaping the financial rewards when you sell them on. Sites with good quality traffic but little monetization strategies present enormous opportunities for you and they are out there.
No matter how you approach investing in websites, the internet is full of opportunities for smart investors.