Want to Invest in Digital Real Estate? How to Get Started

What is digital real estate?

Everyone’s familiar with real estate investment. It’s as simple as buying a house or land to rent or sell for profit. Digital real estate works the same way, except online. Every domain name, website, social media account and blog is internet property. They represent digital real estate that you can buy, develop, rent and sell for profit.

There are people making a full-time career from buying and selling domain names and websites. Some domain names sell for millions of dollars and websites often get acquired for lots of money as well. One example is lasvegas.com, which was originally registered in 1994 and then sold for $90 million in 2005. You, too, can make money from digital real estate.

How to invest in digital real estate

One of the biggest reasons many people stay away from investing in websites is they think it requires advanced technical knowledge and web design experience to build and manage a website and avoid web design mistakes. However, the opposite is true: You don’t need much tech experience to start investing in digital real estate. 

New technologies and free software platforms, such as WordPress, have made the website creation process much easier for beginners. You also have the option to buy an established website.

There are two ways to invest in digital real estate: 

1. Buying an established website
2. Building a new website from scratch

Each strategy comes with benefits and downsides. 

How to buy an established website

To purchase an existing website, you need to establish your budget, find a website to purchase, conduct due diligence on the site, such as verify domain ownership, request analytics, review financial details, and negotiate the purchase contract.

Pros and cons of buying an established website

There are pros and cons to buying an established website. For example, if you decide to buy a website, it might cost you a lot of upfront money. However, if the site is already making a profit, you can get a return on your investment much sooner. You will already have access to a dedicated audience and you won’t need to spend the time and resources it would otherwise take to build a website from scratch.

There are some potential risks to buying an established website though, such as hidden liabilities like outdated content, poor SEO or penalized traffic. These are all things that should be addressed before making a purchase

Where to buy an established website

The cost to buy a website can be anywhere from free to hundreds of thousands of dollars, with the average cost being between $1,000 and $100,000. Small business websites tend to be on the lower end of the range, with corporate websites in the middle and more successful e-commerce websites on the higher end.

If you have enough funds to buy an established website, there are several marketplaces you can explore to find websites for sale.

• Flippa: Flippa is one of the most popular marketplaces and a good place to begin your search. This platform allows you to participate in website auctions and buy websites that are already making a profit. The website listings in the marketplace show you the exact amount of money the site generates every month and what type of monetization strategies it uses to generate revenue.
• Empire Flippers: Empire Flippers is another popular online marketplace for buying and selling websites and online businesses. It specializes in e-commerce stores, content websites, software-as-a-service businesses and other digital assets. The platform vets businesses before listing them, which is ideal for assurance that you’re accessing legitimate and profitable opportunities.
• Motion Invest: Another platform for buying and selling content-based websites is Motion Invest. This platform specializes in smaller niche websites that generate revenue through display ads, affiliate marketing or other monetization methods. The platform specifically focuses on lower to midtier websites, making it accessible for people looking to invest in online assets without the high costs of larger website marketplaces.

Keep in mind that when buying websites, you can’t always trust the listings. Do your research to ensure your investment doesn’t go to waste. You can use a tool like Semrush to analyze a website and check its SEO, backlinks, visitor count and other statistics before buying. 

How to build a new website

Building a new website starts with the same step as purchasing one and that is establishing your budget. Additionally, you need to determine what you want your website to be, choose and register a domain name and select a website builder. You can choose to build the website yourself or hire someone to build it for you.

Pros and cons of building a new website

Building a website from scratch requires only a small investment and can be started almost immediately. You will have full control over your domain and its content, providing the flexibility to bring your own vision to life. This is ideal for anyone seeking to build an online presence from the ground up.

However, building an entire website can be time-consuming. You have to put in a lot of work to make it successful and it will likely take a long time before you can sell it for a profit. 

Website builders to build your website

If you decide to build a website from scratch, you can do it yourself by using a highly rated website builder. Hosting and building apps typically cost between $15 and $40 per month, although the price can increase into the hundreds for large enterprise platforms and e-commerce capabilities. Hiring a professional website designer typically costs between $500 and $10,000 per project:

• Wix: With over 900 responsive, industry-specific templates as well as customizable tools, Wix makes it easy to design a website regardless of your experience level. Tech beginners can take advantage of the platform’s easy setup wizard and drag-and-drop tools, while those with advanced technical skills can create custom coding through Wix’s dev mode, Velo by Wix. Wix offers both free and paid plans, but the free plan comes with advertisements. Paid plans are ad-free and range between $17 and $159 per month. The Core, Business and Business Elite plans include website analytics to help you understand how your site is performing. Learn more about Wix here.
• Weebly: Weebly’s intuitive interface and comprehensive features make it easy to build a website that meets your needs. The platform includes more than 50 website templates organized by categories, a drag-and-drop design and an HTML editor for custom coding. Additional features include analytics, e-commerce and marketing applications. Free and paid plans are available. Paid plans range between $10 and $29 per month. 
• Hibu: If you’re looking for a professional to take the reins, Hibu may be the right fit for you. The full-service web design agency specializes in creating “smart” websites tailored to both search engines and targeted audiences. The company offers additional services to help you manage listings, online reviews, reputation and e-commerce sales. Because Hibu is a service rather than software, the costs depend on the project. You will need to set up a consultation with a Hibu representative, who can offer a custom price quote. 

How to profit from digital real estate

After buying or making your website, you need to create content on a consistent schedule to attract visitors to your website and generate traffic. Use Google Keyword Planner to brainstorm ideas for your blog using words that people are already searching for.

If you’re too busy to write blog posts and promote your website, hire freelancers to write content on your behalf. You can find freelancers from sites such as Upwork at affordable prices. Once you’re getting enough traffic to your website, monetize that traffic to generate revenue. Here are some ways to make money from your web traffic:

• Advertising: Sell ad space on your website or use an ad network, such as Google AdSense, to monetize website traffic. When people click an ad, you earn money.
• Affiliate marketing: This involves promoting and selling products created by other businesses. Whenever someone buys a product through your affiliate link, you earn a commission off the sale.
• Product sales: You can create and sell your own products — like e-books, online courses and software — on your website.
• Sponsored content: Advertisers often reach out to companies to sponsor blog posts that promote their own brands and products. They will pay you to write about their products on your blog.

Eventually, you may start making a profit from your website. Then, you can decide whether to sell it for a profit or continue developing the site as an income stream. 

The good news is that you don’t have to spend a lot on a website. The bad news is that, unlike when you invest in stocks or real estate, you can’t sit back and watch the value of your digital real estate go up over time; you have to put in the work to increase your website’s value. 

Sean Peek and Syed Balkhi contributed to this article.