Why I Keep Buying
Someone asked me why I was continuing to buy domain names when I couldn’t find the time to develop all of my names right away. One suggestion was to allocate my resources to developing what I have instead of buying more domain names. The question is reasonable and I spent some time thinking about it. Truth is, at heart, I am a domain investor. My business is built around acquiring domain names for good prices and then determining how to make a profit from each domain name I acquire. While I have been developing some of my names and continue to do so, I am not a developer. I believe to unlock the real value of many domain names, development must be done, but I have to determine where to allocate my personal resources, and sometimes development isn’t the best strategy.
When I am in the process of buying a domain name, one of the things I consider is how the domain name could be developed to make a profit. Once the name is acquired, I determine whether it would be possible for me to do this and/or whether I would have the desire to do this. If the answer to either is “no,” I will typically put the name up for sale. Sure, I could keep every great name I buy, but that would make it difficult to generate revenue here and now. In the long run, knowing what to develop and what to sell is crucial, as development can cost thousands of dollars, and recouping the investment might not be possible on some domain names, depending on how it was spent.
A real world example is one my fiancee and I are discussing at the moment. Our kitchen was re-done a couple years before we bought the apartment. I don’t love the kitchen, but I don’t hate it. We asked our building’s realtor to take a look at our place and see what improvements we can do that will be beneficial when we sell in a couple of years. Long story short, she said the kitchen looks good, so there aren’t many things we can do to add any more value to the apartment. If we make changes, it will only marginally improve the value of the apartment, although it will cost tens of thousands of dollars to revamp the kitchen. The kitchen is in great condition, but a buyer might make changes to his liking, so it’s not necessary or recommended for us to do it with the purpose of adding value. Just like some domain names, a website might look nice, but a buyer will probably have his own business plan, so sometimes its better to just leave it alone and sell it as is, as any changes won’t impact the value.
With my developed names, I am planning ahead to create a steady revenue stream for 3, 5, and 10 years down the line. I will always have to adapt to changes in the Internet landscape, but because I am bullish on the .com domain market, I believe no matter what I do, my domain names will increase in value. This is why I spend time and money developing good domain names rather than spending time and money building good websites on sub-par domain names. It is critical to build websites that can adapt to changes, but it is also important to know which domain names to develop and which should just be re-sold. I am always a buyer of great domain names, but determining which I should develop is difficult.
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