There are several
ways to make money from domain names. The most well know methods are domain
parking, and obviously selling domain names. But if you have a portfolio
containing generic domain names, you may have a third option, known as ‘domain
leasing’ or ‘domain renting’.
Domain leasing allows you to generate
revenue from your domain, while still holding on to the rights. This can be a
great option if you suspect that your domain name is going to appreciate in
the next few years and you are not yet ready to sell.
The
pros
Renting a domain means a steady income, paid to you monthly or
yearly. Your domain could increase in value, making it easier to sell. The
renter’s website could even increase the pagerank and backlinks of the
domains. But the opposite is also possible.
The
cons
There is a risk the renter could have your domain name
blacklisted by search engines, which is very difficult to reverse. If your
domain has a high pagerank, it could lowered or lost due to the renter’s
website (but this is likely to happen if you have your domain parked anyway).
Domain leasing is also much higher maintenance than domain parking.
You have to make sure the renter make their payments every month and you are
responsible for name server changes. Whereas domain parking is easy and can be
almost completely automated.
What’s in it for
Renters?
Let’s assume that hotels.com is for sale. Obviously, this
domain would be worth several hundred thousand to a few million dollars. I am
starting a hotel search website and think this domain name will help my
website. But, as I am just starting out, I do not have that kind of money. The
domain owner has offer to lease it to me for $10,000 per month. He will allow
me to change the nameservers to point at my website, but will keep all rights
to the domain.
I might find that, several months later, my business is
making a huge profit and purchasing hotels.com has become feasible. I am now
able to make an offer that the owner is happy with.
How do I get
started?
Doing a quick search for “rent domains” will return
several popular websites where you can advertising your domain for lease and
for sale (or rent a domain).
One of the great advantages is, that once
the lease term is over, there will be residual traffic to your domain. Your
domain names will also obtain a pagerank and backlinks, from the renter’s
website. This will increase your revenue if you choose to go back to domain
parking. It could even make the domain worth more and easier to sell. But
revenue solutions like domain parking are usually a much lower
risk.
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