Domain investing is very much like real estate investing. The biggest benefit is a much lower price point to enter the market, as low as a few dollars to own a domain. Investing in domain names is a way to make money for an investor by selling a domain for a higher price than it was purchased for. Just as in real estate you can flip a name to make a quick profit. You can also develop a domain into valuable piece of Internet real estate.

Domain investing doesn't require knowledge of local rental laws nor do you have to deal with tenants. Can it get any better than that???

Domaining is not hard but it isn't a get rich overnight venture either. It will take time, effort, money, and a lot of research. If you develop a routine and stick to it, the whole process will seem like a breeze. It is important to know the market. Just like with terrestrial real estate's motto of "Location, Location, Location" a cyber investor should really study various aspects of a domain BEFORE shelling out money to buy it.

There are various ways to profit with a piece of cyber real estate. You can sell a domain immediately after you buy it, also known as flipping. You can lease the domain out to other parties, which can be rather technical and isn't very popular yet. You can park the domain and earn some commissions that way. Or you can develop the site and then either hold it for the residual income or sell it as a fully developed site to bring in a large chunk of cash all at once.

To compare virtual real estate with actual real estate, think of one site being like a store on Rodeo Drive and another being a diner on the outskirts of a small town.

Domains with the ".com" extension have the highest value as a general rule.

That being said, depending on the domain, another extension may actually be more valuable to a particular niche.

There are many websites that allow users to buy and sell domain names. I am listing the three most popular.


http://www.sitepoint.com/marketplace/


http://www.sedo.com


http://www.eBay.com

If you are not buying your domain directly from a registrar be sure you know when the domain is due to expire. Also make sure the person selling you the domain is listed as the owner of the domain. You can check this by doing a "whois" search.

I don't worry about it for cheaper domains but definitely use an Escrow service to protect yourself when buying or selling an expensive domain.