So I’ve come up on my 1 year anniversary of domain name investing. I’m by no means a pro, full time domainer nor extremely successful. After 1 year I’m probably $900 in the hole but I’ve learned a lot and see that there’s money to be made if you’re smart. So hopefully this short article will help you avoid some basic mistakes that I’ve made. To give you some ideas of where I’m at as a domainer here some rounded portfolio stats.

My Portfolio Stats:

Domains: 375
Earned from sales or parking: $1,100
Earned from developing: $400
Spent: $2,500

Total: -$900

So here is my list of I-wish-knew-this-before mistakes …

Know what kind of domain investor you are:

Your style will help you make wise decisions when purchasing domain names. A lot of this depends on your personal skill set, available cash and goals.

  1. Big Fish:
    Usually only buys highly desirable, short, generic and keyword focused domains. Example: pizza.com which recently sold for 2.6 million.
  2. Speculator:
    Great at finding untapped domain niches that don’t always have immediate value but could hit big if they catch on. Example: Pop Culture, New Technology, News items. May have to hold on to a domain for years before it hits.
  3. Flipper:
    Find undervalued domain names and resells them for a profit.
  4. Parker:
    Buys domain names with existing traffic and gets paid when visitors click on the ads served on the site.
  5. SEOmainer:
    Buys domains that aren’t necessarily premium domains but have strong keywords that can be used to gain an advantage in the search engines. I think I’ve decided that I am more of an seomainer for the simple fact that I don’t have the $ to invest in premium domains and I enjoy creating websites that will create passive income and seo.

Don’t buy crappy domain names:

What a novice or average person registering a domain thinks is cool or valuable is completely not relevant for investing in a domain name. When I started I thought a domain like: brandnameplasmatelevisions.com was a good domain name. Now the domain is not completely terrible and I’ve seen a lot worse but it is one that I’m going to let expire. Out of my 375 domain names I’m probably going to let 175 domains expire from my portfolio because they are not worth more than their registration fee.

Characteristics of a crappy domain name:

Remember that there are exceptions to all of these characteristics but as a general rule these domains are not great.

  • #’s:
    For example I bought laptop5.com when I first started and the domain is not a very good one. If I bought laptop.com I could sell it for a few hundred thousand but laptop5.com is probably not worth much. Exception: Zip Codes - Zip code domains have been fairly strong but they have meaning and are not some random number added to the beginning or end of a keyword domain.
  • Long domains:
    Some domain names are just too long to be brandable, memorable, or to receive type-in traffic.
  • Dashes:
    This one is probably more debatable than the others but in general is a domain is: buy-houses-in-indiana.com it probably isn’t worth even the reg fee. The exceptions would be very high sought after keywords like: buy-houses.com This domain is not worth as much as buyhouses.com but would still sell for a pretty penny and would be great for an seomainer.
  • Quantity over Quality:
    This is more of a personal strategy choice but one that you want to make early on.
  • Where to buy:
    Not knowing where to find good deals is a big problem when looking for domain names.

If you have $1,500 to spend on domain investing you need to decide if you should buy 10 domain names or 1 really good one. There are a lot of domain names out there that are great buys for $200-$750 and a lot of great ones for $1,500. You can also try what I did and buy a ton of cheap domains hoping to flip them and probably not make too much money. I would recommend either buying one really good one and developing it or buy a few strong second tier domains and resell or develop them. Quality is always of utmost importance when buying domain names. There are always a bunch of chumps who will buy your crappy domains but they will always try and low ball you. Example: http://www.forums.digitalpoint.com I’m not dissing the forum because I myself go there but it and others like it are notorious for lurkers, noobs and shady deals.

Unregistered Domains:

There are still a lot of good 2nd tier unregistered domain names out there for those willing to dig. I like to use 2 tools to help me in my search.

  1. DomainsBot:
    Great domain search engine that helps you find and come up with keyword variations to find unregistered and domains that are listed for sale.
  2. Google’s Keyword Search Tool:
    Googles keyword tool allows you to pull keywords relative to a search term, download it as an excel csv file and then you can copy and paste it into your favorite bulk registering tool to see if there are any good ones still available.

Forums:

After I just got done dissing on Digital Point’s forum I still think they are a good place to find deals if you are willing to dig through the trash. Other recommended forums are:

  1. NamePros: Is a great forum that focuses on domain names. There are a lot of knowledgeable members and good deals to be had.
  2. DNForum:
    Another domain-focused forum.

Marketplaces:

Well there is only one place to buy and sell domain names on the internet: FlipSquare! Ok so there are a few others but we believe we are the best and are striving to fix all of the problems that exist at the other places.

Patience:

Man when I first started I was a bit over zealous and made a lot of mistakes. I though I’ve got to buy this domain or someone else is going to get it. Well any time you are negotiating or thinking of buying a domain name don’t feel pressure. There are millions of domains and millions of opportunities. Take time to think about it and to pass on deals if it doesn’t fit into your priorities. I’ve passed up some really good buys before and wish I would have bought them but in the end they weren’t right for me.

Although I’ve made mistakes and still have a lot to learn, I’m still bullish on domain names and seomaining. There is a lot of long term / semi-passive income that can be earned from investing in domain names. So my advice is to get started and start learning. I’ve learned a lot more than that and I’m sure you’ve got your own top 5 or will have a list of mistakes shortly. Sound off about your experience or questions in our comments section and stay tuned for more posts about domain investing.