5 Reasons Why Domain Leasing is Great
101 Domain

5 Reasons Why Domain Name Leasing is Beneficial

82

I’ve become a big fan of leasing domain names. As a domain owner, when you’re able to work out a mutually beneficial lease deal, there are many benefits and few drawbacks. I am pretty sure we’ll see more lease deals in the next few years than before.

I want to offer my thoughts on why leasing is a great idea from a domain investor’s perspective and also want to share why I think it’s advantageous for an end user to lease a domain name.

I believe there are many advantages and benefits to leasing a domain name, and I want to share my reasons below. You are more than welcome to share your thoughts as well.

Here are 5 reasons why I think leasing domain names is a great idea for domain owners:

  • Consistent revenue stream that is greater than the existant PPC earnings or advertising revenue without the work (if you developed on your own).
  • With domain valuations down from 2006-2008 highs, you can keep your domain names without selling at arguably lower valuations.
  • Someone else builds value on your domain name, both in terms of traffic and goodwill, which you will realize should the lease term end without renewal.
  • Can realize a much higher sale price if you do a lease to own or purchase strike price in your agreement.
  • Possible tax advantages to collecting revenue over time and/or treating leased domain names differently than inventory (obviously speak with an accountant – I have a CPA handle mine).

Here are 5 reasons why I think leasing domain names is a great idea for end users:

  • Spend less money up front on a domain name, allowing funding to be spent on building the product or service and marketing it.
  • Can work with the domain name owner to agree on a fair purchase price or lease to own deal for the domain name in the future, allowing an idea to be built out before committing the capital.
  • If the business doesn’t work out, the domain name can be given back to the domain name owner without having to find another buyer for it.
  • Business can be built and grown without having to spend a great sum of money at one time.
  • There may be tax advantages depending on how you classify domain names (obviously speak with an accountant – I have a CPA handle mine).

About The Author: Elliot Silver is an Internet entrepreneur and professional domain investor. Elliot is President of Top Notch Domains, LLC, a domain investing company that has sold seven figures worth of domain names in the last five years. Elliot is the publisher of DomainInvesting.com.

Reach out to Elliot: Twitter | | Facebook | Email
Niche Websites

Comments (82)

    AbdulBasit Makrani

    Thanks for sharing it. This is really helpful for those who are willing to lease their domain names.

    December 30th, 2012 at 11:19 am

    Sauron

    Domain leasing is always a win win situation for a domain owner. End user will always be on the loosing side. Reason is obvious.

    In real life a poor farmer can always borrow some land from a big farmer for a particular amount because he does not have any other option. On the other hand an internet end user always have an option to purchase the domain in some cctld or in other gtld extension.
    JS

    December 30th, 2012 at 11:24 am

      Elliot Silver

      If “End user will always be on the loosing [sic] side” then there would be no leasing. End user leasees aren’t in business to lose money, and if they do lose money, the advantage of a lease is that they can get out of it with minimal financial damage.

      I am currently leasing domain names and the leasees are happy because they didn’t have to pay 5 and 6 figures up front. Instead, they have fair monthly rates they we mutually agreed upon.

      Good luck building a very successful business on a .net or ccTLD. How many have done so and NOT coveted the matching .com? I welcome anyone to build on an alternative TLD where I own the .com. It will drive traffic and revenue to my .com name and ultimately will increase the value.

      December 30th, 2012 at 11:34 am

      Jay

      Yes, poor farmer can alway borrow some land… So all you can get is poor end user borrow your domain name. What a deal, right? Forget it!

      December 30th, 2012 at 2:42 pm

    Kevin

    Leasing domains is not a simple process though.

    1. You absolutely need a very comprehensive and professionally drafted lease agreement customized specifically for each deal.

    2. There are also many potential and significant legal and financial risks and liabilities when someone else is operating a business using your domain name as their identity. I think way too many domainers are seeing leasing as an easy monetization solution but they have no idea what they’re actually getting into when enabling someone else to do business appearing to the public eye as you.

    3. You should have a very skilled attorney review and handle every lease deal.

    December 30th, 2012 at 11:45 am

      Elliot Silver

      Absolutely correct and great advice.

      December 30th, 2012 at 11:53 am

      Kevin

      Adding to my post above.

      4. Ask to see the business and marketing plans they would be implementing on your domain.

      5. Obviously all businesses have most customers/clients that will speak highly of them and some unhappy customers/clients that will not. So instead of asking for references (since no one is ever going to give you bad references) ask what other businesses they’ve had and then see if there are lots of serious issues from the past, or present that could indicate problems for you down the road. You should also have these kinds of declarations in the lease agreement.

      6. On a major deal, where your domain will be out there in large media campaigns, consumer interactions, etc., I would ask to have a rider added to their business liability insurance policy covering the domain and your company from all the usual risks like lawsuits, damages, claims, intellectual property use, etc.

      More than anything, recognize that leasing a domain name is not like leasing someone office space in a building you own. With a domain lease it’s more like letting someone have use of your car that has your last name plastered on the side of it, the keys 24/7, and the vehicle registration with YOUR name on it.

      Also, from a legal standpoint, since domain leasing is new, there is not a ton of case law out there to fall back on if anything goes funky because of the lessee’s actions diliberately or even innocently where you get tangled up in a lawsuit as the owner of the business name they were using. So lease with as much prudence and caution as possible.

      December 30th, 2012 at 2:54 pm

      Max

      “More than anything, recognize that leasing a domain name is not like leasing someone office space in a building you own. With a domain lease it’s more like letting someone have use of your car that has your last name plastered on the side of it, the keys 24/7, and the vehicle registration with YOUR name on it.”

      Yeah, AVIS already do that. HERTZ also do that. Do you know them?
      ;)

      January 2nd, 2013 at 8:02 pm

    Joe

    Nice article. On the other hand, I’d say domain leasing has disadvantages as well. For example, you put your domain’s reputation in the hands of a 3rd party. And, of course, the more valuable your name is, the higher the risk is.

    December 30th, 2012 at 11:46 am

      Elliot Silver

      Good point, but the more valuable it is, the more expensive the lease would be, making it less likely someone will do something bad with the domain name when they’re paying a bunch.

      In addition, a good agreement will list things that can’t be done with the domain name (with the owner’s recourse).

      December 30th, 2012 at 11:57 am

      Jay

      Elliot, you don’t have to agree with every Rich’s idea. Be more independent.

      December 30th, 2012 at 2:44 pm

      Elliot Silver

      You’re fucking annoying man. Give it a rest.

      December 30th, 2012 at 3:03 pm

      Jay

      Elliot – please say a human being.

      December 30th, 2012 at 4:21 pm

      Elliot Silver

      What does that even mean?

      December 30th, 2012 at 4:22 pm

      Jay

      Elliot – please stay a human being.

      December 30th, 2012 at 4:25 pm

    Daniel

    I agree on this being a great future potential for domainers. Perhaps you could provide further insight in future blogs on this topic such as,

    - Best type of domain names to lease;
    - Types of leasing / lease to own agreements and terms to consider;
    - Potential problems which may arise in lease agreements;
    - How to approach the domain name lease option with a potential end-user;
    - Generatl tax implications; etc.

    I would assume leasing a domain name is quite similar to leasing ‘real property and I look forward to hearing more on this from both you and your readers.

    December 30th, 2012 at 11:49 am

    Domain Godzilla

    Any links to sample lease contracts?

    December 30th, 2012 at 11:52 am

      Elliot Silver

      I would pay for an attorney to write something up that matches your needs.

      December 30th, 2012 at 11:54 am

    Jay

    All I read here and in other posts and comments is how great is to lease domains but so far I haven’t seen any one good domain lease deal. I mean good for domain owner. Hate me!

    December 30th, 2012 at 12:10 pm

      BullS

      Yea…some me the real business cases.

      All the blah blah blah BS…give real examples, real people, real scenario.

      December 30th, 2012 at 12:20 pm

      Jay

      Bull S – Correct. Unless some “domainers” own a lot of shit domain names nobody will ever buy, so lease will conver at least registration and renewal fees :) I would never lease any of my domain name. Ever! Hey, people stop lying and post unreal comment regarding domain lease. This is not a good business model for domain industry…

      December 30th, 2012 at 2:35 pm

    jon

    What utter, utter tosh.

    If anyone reads this and thinks “Mmmm – what a good idea for saving a tenner hosting my new webshite!” then they deserve every bit of pain they’ve got coming. Since they’re probably non-technical (given that they think this idea is in any way not *horrible*), they can probably be totally ripped off – which makes it a *great* idea for domainers! Keep ruining the internet guys! Well done!

    December 30th, 2012 at 12:28 pm

      Elliot Silver

      I take it that “tosh” isn’t a good thing?

      December 30th, 2012 at 12:43 pm

    Olex

    I think it’s more easy in legal terms to lease the domain name as company rather than private person.
    Elliot, do you lease your domains on behalf of your company, isn’t it?
    Were any special terms for leasing on papers that you think can be good/bad for domain owner?

    Thank you for the post. This “Lending domains as property” trend is very important for domaining industry.

    December 30th, 2012 at 1:13 pm

    Francois

    My feeling is almost nobody want to rent domains:

    - How many rental requests did I received these past 7 years? ZERO! (and you?).

    - How many domain rentals we have escrow at ECOP.com in 2 years (while we have escrow thousands and thousands of sales and seller financing deals? ZERO!

    - Will I consider myself to rent a domain for my next service? NEVER!

    - What LeaseThis.com is doing after so many years? NOTHING!

    This is the true reality about domain rentals, all the rest are lies or domainer dreams.

    What should have a brillant future is:
    seller financing ~ rent to own ~ sale with a payment plan

    December 30th, 2012 at 1:36 pm

      Elliot Silver

      I don’t agree. My company has more than one domain name being leased. Although I would be happy to have sold those domain names, I like the recurring revenue streams.

      December 30th, 2012 at 1:45 pm

      Jay

      More than one… So two. Okay. I guess some blah-blah domain names with monthly income covering one nice family dinner. That is not a business. Real domainers focus on quality domain names only and only stupid one should put such value to a risk of domain lease.

      December 30th, 2012 at 2:31 pm

      Olex

      The reason is in absence of examples shown in media to business financial world. There was no any promotion for such financial scheme.
      Small business isn’t educated for such operations at all. Nobody knows that it can be made via escrow. Lawyers don’t have enough cases to support such procedure with low fees.

      But… it’s question for time…

      December 30th, 2012 at 2:34 pm

      Jay

      Olex – Don’t be stupid! You need a different point of view. Think like buyer! Would you buy domain name someone else is leasing and using for something else that you want? Lease may lead to value depreciation of your domain name!

      December 30th, 2012 at 2:39 pm

      Elliot Silver

      Jay Troll – I wouldn’t waste my time working out lease deals, spending money on legal fees, nor would I lock up my domain names if the deals weren’t for substantial amounts of money.

      December 30th, 2012 at 3:00 pm

      Kevin

      Francois has made valid points.

      As does Jay, since indeed someone could really muck up the value of your domain if something bad happens while they’re leasing it.

      Personally, instead of leasing, I think it’s way better to convince the prospect to buy the domain and then provide a reasonable down payment and affordable short or long term monthly payments.

      December 30th, 2012 at 3:03 pm

      adam

      Francois. Every buyer I’ve had that couldn’t afford the domain today has asked about the lease option because I’ve presented it to them. I suspect most people, like yourself, don’t present this option and only name a price. I also suspect having English as a second language can be a huge problem with coming to terms with a lease where a buy it now type of deal is much easier to bang out.

      Are we talking lease to own or a perpetual lease with a buy-out option ? There’s a lot of different forms to lease. I have had multiple names in lease deals this year. I suspect savvy domainers have even bought on lease ;)

      December 30th, 2012 at 11:21 pm

      Elliot Silver

      Having an option to buy would be a critical part of an agreement I’d want if I was going to lease a domain name from someone else.

      December 31st, 2012 at 8:40 am

      Dave Bhatia

      I recently sold a domain through ecop.com with a payment plan and feel it has good future.

      In my 15 years of domaining it was the first time I sold with payment plan.

      January 2nd, 2013 at 8:15 am

      Max

      You have that feeling because you are not an entrepreneur, I mean someone with real assets etc., otherwise you would understand.

      Of course an exit strategy with a final option/s to own the domain must be provided.

      January 2nd, 2013 at 8:19 pm

      jose

      @Francois, what’s the difference
      “seller financing ~ rent to own ~ sale with a payment plan” ?

      January 14th, 2013 at 11:32 am

    Lda

    It seems as though the former Zenscrow.com, (now GoForThe.com), tried the leasing route as a business model, promising domain usage monitoring for UDRP risks etc.

    The new model seems to be just ‘rent to buy’ without the previous infrastructure.

    Can anybody give details on what happened there ?

    Did original model not work?

    December 30th, 2012 at 2:41 pm

      Jay

      So far there is no UDRP case when domain name was in lease, I belive. Is it good or bad faith to have domain name and lease it to someone else? Does have domain owner rights or legitimate interests in such domain name? Who is willing to find out and risk valuable domain name (not shit stuff) and lease it? The party who will lease it from the owner may come with proof that such domain name match their (even not registered) mark and that owner try to make money on him, etc. Well, even it should not be a case, because we have seen very bad UDRP decisions, I would not count on “no problem” here. Would you, Elliot?

      December 30th, 2012 at 4:58 pm

      Elliot Silver

      That’s the first intelligent comment you made here today on the topic.

      There are a couple things that are important when I am considering a lease:

      1) Make sure your contract prevents the leasee from filing any type of legal / UDRP action on the domain name any time in the future. Rule number one is to protect your asset and make sure the leasee acknowledges that it is your asset and leasing it gives no rights to ownership unless it is acquired. When leasing an apartment or storefront, the leasee wouldn’t expect to get ownership of said property simply by way of occupancy.

      2) Have a lawyer who is familiar with domain name leasing write the agreement to cover your company and your domain name and ensure that your business is covered.

      3) Only offer lease deals on descriptive keyword domain names and not names that would be more risky.

      With any and every deal you do, there is an element of risk. Every business owner needs to weigh the risks and benefits of their deals before agreeing to transact.

      December 30th, 2012 at 5:23 pm

      Jay

      Elliot – Every serious domain name is risky, when it comes to non-sense UDRP. The problem is that party filing UDRP claim is risking just $1,600 or so, while domain owner is in much higher risk. And because domain lease potentially increases such risk (because of possible lack of owner rights or legitimate interests in such domain name), I suggest avoid this business domain to every owner of serious domain name.

      December 30th, 2012 at 7:08 pm

      Elliot Silver

      Do you avoid negotiations when someone wants to buy your name? I would say a failed sales negotiation would be far more risky since the acquirer didn’t get the domain name, and a UDRP would at least keep them in the game.

      There is always risk in this business.

      December 30th, 2012 at 7:10 pm

    Francois

    It look likes my english was bad and you missunderstood:
    The fact the domain rental market is (and has always been) dead is not due to the lack of interest from domainers (including me) but to the fact people want to own the domains they use, so they are reluctant to take this path (the numbers above clearly outline this fact).

    While I will never rent a domain for use it as a site, I will sign today to rent all my domains if the demand existed ;-)

    December 30th, 2012 at 2:54 pm

      Scott Neuman

      Why sellwhen you can rent? I have rented a few names and been happy with the transactions.

      December 30th, 2012 at 10:58 pm

    Olex

    From business point of view: With many IF for great name that fit the business and with garantie to buy name as Option -Yes.

    If I advice such Lending to SMB – Yes on high priced domain names and never on domain names in range less than Xk.

    December 30th, 2012 at 2:58 pm

    Bob Fontaine

    Leasing is a better modelfor Advertising units. Banners. Actually, that’s all that form of advertising is, leasing space.

    The lease/option/purchase of specific sized ad units in contractually defined locations on specific domains will become a mainstream market.

    Chace Viza type brand probablyn has their banners on hundreds of mid and lrge traffic domains under a 1 year “lease” at all times.

    Theym an other major brands, will end up “purchasing” those ad units. Like a condo.

    When that becomes common, then there will be confidence in the standardized leasing, lease option/purchase type models.

    Bothe lessor and lesses need to knwo there are accepted legal norms regarding liabilities and rights under a lease arrangement. And then as ort of registry of deeds, so that “clean title” ownership can be assured.

    I put some thoughts together on this model perhaps 5 years ago.. I dont want to spam the site, but relevant to the lease discussion. ConDomains dot com.

    December 30th, 2012 at 4:52 pm

    John Humphrey

    What’s your thinking around a situation where you’re letting someone make payments for a domain, but then get a very good incoming offer for that domain (much more than the price you agreed to take payments on). Would you have negotiated an if/then clause into the deal that would let you buy out of it?

    About how much might one expect to pay a lawyer to write up a lease-to-own agreement on a domain priced at $5-15-60k?

    Couldn’t the lessor simply add a clause to the contract that would indemnify them from whatever the lessee did with the domain while the lease was in effect?

    December 30th, 2012 at 5:17 pm

      Elliot Silver

      That is a big downside to a lease. You should keep this lost opportunity cost in mind when coming up with a monthly lease price.

      December 30th, 2012 at 5:24 pm

      Kevin

      1. You could provide a clause handling this scenario and for example grant the lessee a “right of first refusal”. But I doubt a lessee would agree to a lease where their lease term could potentially be cut short by incoming offers you wanted to accept. This is why I said in my post above to really think hard about leasing your domains. It’s ok for some but not might be a good idea for all.

      2. Lawyers are expensive. It’s an unfortunate cost of doing to business these days where we live in such a litigous society. Look at it as insurance to help you digest the fees. LOL You’re protecting your assets.

      3. Sure you could add a simple indemnification clause, but it’s much better to detail the most likely scenarios that could truly cause problems for you in the agreement and address what happens should they occur.

      December 30th, 2012 at 7:17 pm

      Elliot Silver

      Agree with all of that. The lease really needs to be financially worthwhile to justify the risk exposure. Obviously it wouldn’t be worth the costs to make minimal return.

      December 30th, 2012 at 7:19 pm

    Michael

    Let’s see how quickly Rick and Danny fill contracts at JointVentures.com and let the cards fall where they may. Results never lie.

    Me personally, PPC sucks lately and ads from Adsense or even banner partners doesn’t pay the mortgage (for most). Solid, GUARENTEED recurring revenue streams are where it’s at ladies and gents- not a few sales every year or bs parking payouts. If you can get an attractive lease deal to take your domain from $xx-$xxx to $x,xxx monthly- GO. FOR. IT!

    December 30th, 2012 at 5:32 pm

      Elliot Silver

      I am not referring to joint ventures here. That’s a completely different ballgame.

      December 30th, 2012 at 7:06 pm

      Kevin

      Getting joint venture deals is very very very hard work. There are a lot of essential ingredients that have to be planned out unique to each deal, then discussed and agreed on to get all the parties onboard.

      Running a business with a “partners” structure is also always a nonstop challenge because everyone has their own way of doing things and like a marriage “things can change” and tempers and egos can flare. JV’s can turn out great and very profitable for all the parties or JV’s can turn into total nightmares from hell when things don’t go as planned.

      I have to disagree with you Michael about using the words “solid” and “guaranteed” thinking leasing is a sure thing monetization solution. From my decades of experience as an entrepreneur if there is one thing I’ve it’s NOTHING IS SOLID NOR GUARANTEED IN BUSINESS. Everything is a risk. Anything can go wrong. The only thing guarenteed is change. And change can be beneficial to your business or utterly disruptive and tale your business over the cliff.

      Look at PPC. That was the lazy man’s way to riches for most domain investors for many wonderful years. Now where are we? Game over (unless you have the really great keyword domains with tons of genuine type-in traffic and are hooked up with an honest system like Frank’s InternetTraffic.com).

      Look at AdSense. Same thing. Build hundreds of sites and kick back and watch the Google $$ roll in. Now where are we? Game over. (unless you know blackhat SEO techniques and can stay one step ahead of the neverending algorithm changes)

      Flipping domains. Same thing. Used to be you could in the worst case post a decent domain on the forums and get lots of prospective offers on it instantly. Now where are we? Game over.

      2012 became the year we all experienced game over time.

      The only domain investors who will prosper in 2013 and the years ahead are the ones who have truly great domains and who possess incredible business minds and skillsets. The easy money days are over and done.

      December 30th, 2012 at 7:47 pm

    jimmy

    this whole leasing thing is so funny. if i’m an end user, i would be an absolute idiot to put all my efforts into someone elses domain. i would be trusting some random guy to simply not point the dns over to a new host, which would take all of 2 minutes, and my entire business would be over.

    it’s just so funny. if you get someone to actually agree to lease a domain from you, they are probably so stupid you wouldn’t want to count on them being around very long. it would be like renting

    rick shwartz should stick to just sitting around and waiting for a sucker to overpay for old registered domains.

    December 30th, 2012 at 5:38 pm

      Elliot Silver

      Domain names can be held by a third party escrow service to protect the leasee. Contracts protect both parties and there is recourse for that type of issue. Like any deal, due diligence is important to be sure both parties are reputable and all terms are spelled out in the contract.

      You can walk into a supermarket and grab a six pack without paying. The only thing preventing you from doing that is the risk of arrest. Similarly, the risk of a lawsuit would likely deter someone from violating the terms of a contract.

      Again, with any business deal there is risk. Business owners need to do due diligence and weigh the risks.

      December 30th, 2012 at 5:43 pm

    Talk like this

    Sorry to say but honestly I just see a bunch of shit head .. Built me a market and I will like to share a piece of that pie…
    There might not be a market at all but give it a go and then in few years … We can have a chat again ..

    Elliot.. As I have said in the previous comment that (rent a domain / try and buy ) will be the next approach … No.. One has promised win win but hey at the end of the day it matters … How hard did we try and what we are left with …
    Happy New year to all…

    December 30th, 2012 at 7:08 pm

    BusinessShow.Tv

    Will only work well in a one or two month promotion deal combined with media advertising. The business gets coverage and the message across at the time they need to.

    December 30th, 2012 at 7:08 pm

    Curious Cookie

    Are you currently leasing eventplanner.com? Can you provide any details?

    December 30th, 2012 at 8:46 pm

    Another Roy

    The advantage of ‘leasing’ comes from domain owners involved with JVs or development leasing back to the enterprise for tax or owhership stake purposes.

    Someone who likes to pretend other peoples ‘ideas’ are his own noticed via Domaintools a whois change and as if on cue, like ringing the bell for Pavlov’s Dog, started in with the expected LOOK AT WHAT I’M DOING NOW! (and in our next chapter: How to Manipulate People via Domaintools for Fun and Profit)

    The idea that there’s a booming market for “domain leasing” is funny. Does it happen? Yes, occasionally. IIRC, it was either Vegas.com or LasVegas.com that’s on a long term lease (or, at least that’s what Metnick said) but the idea that anyone but a tiny handful of very lucky types are going to make money with this has a lot of people quietly chuckling and laughing behind the scenes.

    December 30th, 2012 at 9:38 pm

      Elliot Silver

      As I said, I have multiple lease deals right now. As someone who flips domain names for a living, I wouldn’t offer lease deals unless they were financially rewarding, most specifically because a lease precludes me from selling the domain name. Why would I encumber expensive domain names if there wasn’t a significant financial incentive?

      December 30th, 2012 at 10:23 pm

      Francois

      They are rent with option to buy, exact?

      December 31st, 2012 at 5:28 am

    adam

    Why does a lease prevent you from selling a domain ?

    December 30th, 2012 at 11:27 pm

    jimmy

    renting/leasing a domain is the equivalent of renting an apartment and then telling everyone it’s your permanent address when you don’t own it.

    You are renting this apartment in a SUPER nice location. You’re a sucker and you’re paying like 2,000 to 5,000 a month instead of buying because you’re not smart enough and don’t have the money to buy because you’re driving an audi with a 1,000 a month car payment that you can’t afford, you’re still paying off your school loans for a degree you’re not using, and you’re living on credit cards to keep up with the lifestyle of your friends that have better jobs than you.

    then go out and get a personal loan to do a 250,000 remodel on your apartment you’re renting from someone. you rent for a year and you decide, hey this apartment rules, i’m going to spend 250,000 a year updgrading this apartment every year because it’s so cool!!

    your landlord goes broke because he ran over some rich guys foot and got sued for everything he has. all of a sudden the new rich guy owns your old landlords assets and gives you a notice that you have to leave. you say you’re legally in a lease. and the new owner legally has to abide by it. he poops on your doorstep until you want to leave, you won’t…

    he kicks you out anyway.

    well, i guess you have a legal peice of paper that you could sue your landlord over. sure is a good thing you have a lease right??!!

    i mean at the end of the day we want to bank our entire lives/business off of a legal peice of paper holding an agreement with another random party that we could go to court over right?

    that is the equivalent of leasing/renting a domain name

    December 31st, 2012 at 1:41 am

    Donny

    It is all very easy.

    If you give the client the option to buy at any time then what is the big deal.

    No problem exists. You all should be saying what will happen if I sell this instead of what will happen if the client goes bankrupt. 1 of 100 may go bad big deal. That is life. Have an attorney write up the best contract they can and go from that point.

    Reg- names

    Names that are being leased are .com with natural type in traffic. That is it.
    If you are looking to do .net or .co good luck buddies your wasting time.

    Next-
    No buyer with brains would lease with out the option to buy. The whole idea here is to move your .50 cent clicks that you get for real estate or insurance clicks into customers that can get real commissions on.

    The idea is to make a win-win for both sides.

    The clicks go direct to business owner.

    They don’t go to google then a ppc firm then to you.
    Nor to do go to a lead based company that shares the lead.

    Leasing a great domain name for 1000 to 3000 a month is cheap. The problem with most of you are trying to lease crap for 5k a month with no traffic. Its all about the value of the client and how many people are walking through your door.

    The game is just starting, yet over for many. Now go save your money and reg all those dot whatevers for 2013 and beyond.

    happpynewyear as they say on tradingplaces

    December 31st, 2012 at 2:52 am

      Another Roy

      Domainers have been leasing out traffic for a while and for the most part, it’s snake oil. Type in traffic has no special properties over traffic from other filtered sources. Tooth whitening was one of the most popular feeds on porn names.

      Don’t take my word for it. Likewise, don’t take the word of the usual schmucks hyping their own product. Talk to some of the poor bastards who’ve actually leased that “powerful type-in traffic” – adult in particular – and ask THEM what their conversion rate was.

      Oh, but this time its different?
      Because with a lease, it gives you a purchase option at the end?
      And after learning just what a non-advantage that domain name really was, buried in your contract is verbiage that upon expiration, the entire venture is handed over to some clown domain owner who now gets to operate your idea as a glorified parking page because he’s too worthless, uncreative, untalented and unskilled to build anything relevant on his own?

      There are always ‘a few’ idiots who can be stood out as an example of something. Pay no attention to ‘a few’ people who get sucked into this. Pay close attention to how marginal ‘leasing’ is, relative to all the other activity that goes on in the domain ecosystem. No about of blog-bellowing that will change that.

      December 31st, 2012 at 3:54 am

    Howard Crosby

    As a seasoned freshman! Is there a general rule on the ppc or the ‘exact’ keyword results a domain can have for you to lease it?
    Cheers!

    December 31st, 2012 at 9:33 am

    Bob Fontaine

    I think some are missing the point that the specific terms of the “lease” are contractual and provide clear rights, obligations, duties and liabilies.

    It’s not some abstract arrangement. It is what you can agree to make it. If you lease out your 2,500SF retail space to a commercial tenant, both of you will do your due diligence, or should.

    A small startup, a couple of college techies with a great idea but no access to funding can get the “.com” they know will be highly important to their ultmate success, for small money.

    They can offer the domain owner who might have 6,000 other domain, who has no intention to develop it, and might be earning $50 a month as a parked domain, $100 a month to lease for 24 months (A fraction of what leasing that store on main street would cost).

    The lease then states that after 24 months the “lessee” has the right to renew at $200 a month for 24 months. If after two years the tenant isn’t growing such that $200 a month isn’t worth it to them, they move on and you put your domain back in action.

    If the tenant’s venture IS starting to grow, building traction on your domain (and perhaps in good part due to the domain), they renew and your domain is earning 4 times what it was parked – as parking fees drop.

    By the next renewal term, If the tenant is doing well because of their service or product, they will likely have started discuss the purchase of the domain above market value, or have acquired of have already begun rebranding their awesome business under another domain.

    Or, both of you agree that the $200 is fair to each side under the circumstances.

    But there HAS to be an out for the people leasing, either in the form of a percentage lease that allows tenant rights in perpetuity, or a Buy-Out price which is based on factors that are clear and fair to eveyone.

    The reality is, both sides are agreeing to a long term relationship over that domain. Both can absolutely benefit from that relationship, or else neither should be making the deal.

    This is why I see the condo model as being helpful. Because it can be done with domains, a directory of a domain, or an ad unit on a specific page and location on a domain.

    I own that main street retail condo.
    I can lease (or sell)my front window space(Banner)to LocalRealEstateGroup.
    I can lease or sell exclusive use of “/Mortgages” – directory on my BigCityRE.com/MORTGAGES. to the local lender.

    And then I can sell the entire condo if I want, to any/all of those “tenants” of “CoDomain” owners, in the event they’ve purchase a “unit” from me..the banner space, or the directory.

    And the local lender can actually SELL their Condo – “/MORTGAGES” to Banc of Armirica (sic) – for a profit.

    Subject to the deed restrictions. And a pre-determined “processing fee”.

    OK I can see that 2012 has been a long one for me, so i’ll stop there.

    Good luck and success all in 2013. More importantly, good health.

    December 31st, 2012 at 9:37 am

      Kevin

      Some good points, however you have to factor in the cost for your time and energy on finding a company to lease your domain and then the time to negotatiate a deal and then the time to work out the agreement terms plus the attorney costs.

      When you factor all that in I really can’t see the profit potential for a $200 a month deal. Reason being if you try to scale that out with 100 domains, the odds are slim to none that you’re going to find companys to lease all of them. If you are lucky lets say you score deals on 5. That means you have to factor in the costs on the 95 attempts that didn’t find a leasee into the costs for the 5 you succeeded on. That’s not going to profitable when you do the math unless someone values there time at McDonalds wages.

      It’s much better to just refine the focus on investing in the highest quality domains you can afford to acquire, get rid of the crap in your portfolio, and then go after high end resales, joint ventures or 4 and 5 figure per month range leases. You’ll get a much better ROI, will have a lot less domains to deal with that will increase the odds for success and decrease the time inefficiency costs of trying to do the same thing with hundreds and thousands of domains which is almost always a wasted effort as we’ve all seen.

      December 31st, 2012 at 9:54 am

      Elliot Silver

      I wouldn’t seek out lease deals. I might offer them if I think it will lead to a sale one day and can generate solid cash flow over time.

      December 31st, 2012 at 9:59 am

      Bob Fontaine

      I am talking less about an individual entity’s attempt at finding someone to lease a bunch of their mid market domain names.

      I am talking about the standardization of the process of leasing out that space. Just as MLS does with conventional real estate.

      When you have standard forms, easy entry, access to the inventory, and a 3rd party holded the “deed” on the transaction, there is a ton of business than can take place.

      All those Banner ads are leases.
      Even when you get ‘some’ of the revenue because thiose ads are on your parked website.

      If you got 1,000 domains and there’s a market where someone with energy wants to take a shot and is promising you more than what you are getting.

      And I run an mls where the standard paperwork can be done to protect the parties for $200 each, and there is upside built in for all concerned. And access to create new markets are clear and easier…. you’d be there.

      Or, we can watch as doing nothing with the domains we all think are worh more than they usually are, earn less and less as reg fees are more and more.

      I’d love to work with someone to create that market.

      You would BE the mls for a ton of this activity. As I mentioned on my Condomain site “The Condo Conversion of Internet Real Estate”.

      I’d have nearly ALL the inventory for the entire concept – being the MLS and the Registry of Deeds. You’d end up with nearly all the lessors/sellers, and all buyers/sellers.

      Everyone would be protected and entry would be a fraction of “real world’.

      I’d take my MajorCityDomainName.com and sell; /RealEstate to C21, I take /Hotels and sell or lease it to Hilton. The top right 250×300 pixel would be sold to the local restaurant group. The bottom left tile would be leased/sold to Visa.

      You would simply create the market, then be the exclusive broker for every transaction. The re-sale market would be crazy.

      Happy 2013.

      December 31st, 2012 at 10:17 am

    patti

    I am sitting here perplexed trying to figure out the logic of the reader’s “Like It” and “Dislike It” to posts on this thread. Something doesn’t seem right. I started noticing it recently in other articles, too.

    I know for me….sometimes I Like or Dislike a post and instead of adding to the total, my click will decrease the amount by 1 or even 2…..But maybe it’s just me….maybe not. : \

    December 31st, 2012 at 9:07 pm

    Domain Godzilla

    From an outside perspective at least the idea of leasing is another idea; An expansion of simply trying to sell. As it stands, I surely am not alone in possessing names that are of little or no value in today’s market. Some of my successful business ventures over the years were borne of dumb luck; just by being open minded enough to try different things. At least the idea of leasing expands otherwise limited option of only selling. Thanks Elliot.

    January 3rd, 2013 at 9:15 am

    BillW

    @patti
    Your correct. I was just trying to figure out the same thing on the “Like It” and “Dislike It” tabs.

    I clicked on one that was already Dislike (5) and when I clicked it became Dislike (2), instead of Dislike (6)

    January 20th, 2013 at 5:35 pm

    mike

    Interesting thread. I found it while searching for “domain leasing” and trying to gather info on what my domain is worth. I’ve owned a domain for several years that is the exact company name of a startup about a year old. They just raised millions in funding from very high-profile sources. The have have a .CO of their name and a cheesy MY*.COM variation on their name, but not the straight-ahead .COM because I happen to own it. Within the space of a month, interested parties have upped their offers to me from just a few grand to $10K, including the company in question. My thought is that it would be foolish to sell a domain that clearly will continue to quickly grow in value. I’m thinking a minimum of $10K/yr to lease it would be fair, but that seems on the low side. I’m talking about a startup that could be worth hundreds of millions of dollars in a few years. Does anyone else here rent out a domain for over $1K/month?

    July 29th, 2013 at 11:22 pm

    Trey

    Hi, great post. Ibe’m interested in domain leasing. How do I get started, I think I have a great domain that can benefit from leasing – any help you give will help. Thanks

    September 19th, 2013 at 12:17 am

    joe

    I Have a generic portuguese domain name that I want to sell/lease. It’s a very popular sport in brazil. All of the other sites that cover the sport is shitty in my opinion. Any suggestions?

    October 15th, 2013 at 1:07 pm

    duncan

    I just had to comment. Everytime I go looking for domain info, BAM! There’s your blog staring me in the face. Well done!

    October 22nd, 2013 at 7:39 pm

    Zlatko

    Hi, just want to tell I have a domain name great for domain name rental business: rent-a-name.com. Don’t need it for business so domain is for sale. Whois info is available… Thanks, cheers!

    March 22nd, 2014 at 5:24 am

    Patti

    Mr. Z—–
    The truth always comes out in the end.

    March 22nd, 2014 at 10:48 am

Leave a Reply

Name *

Mail *

Website