There are a lot of different ways to invest your first $1,000 in the domain business. However, some ways are much more beneficial to your ROI than others. In this post, I will cover the best way to invest that first $1,000 in domain names. If you are just starting out, you should pay close attention. This initial bankroll that you’ll use may be your last if you do not go about it correctly.
First things first, put your wallet down. Should you be so eager to buy domain names that you end up flushing a thousand dollars down the drain? No. The best way to not lose money is by not spending it. That is until you have an actionable plan in place that will all but guarantee you a healthy return on your investment.
The Best Types of Domains Names to Invest In
Forget about what’s trending at the moment, trends are fleeting. Instead, focus on what has a proven history of sales. These are domain names that have time and time again proven to be valuable:
- One word generic .com
- Two word generic .com
- GEO + keyword .com
- One word generic .org
These types of domain names are timeless and have always had value to potential buyers. In my opinion, if you are just starting, these are the only types of domain names you should consider acquiring.
One Word Generic .com
While a majority of one word, generic .com’s may be out of your price range, I can assure you there are some hidden gems out there. For instance, I had acquired Tamer.com for only $1k, Flipped it within a couple of weeks for three times that. Although I sold it rather low, I still tripled my money, and that lead to me being able to buy three more similar domain names and repeating the process. Always keep your eyes peeled for these gems, they are out there.
Be careful, however, because you can get so lost in hunting down one word .com’s that you will settle for the worst kind. Long, hard to pronounce, and even harder to spell. Stay far, far away from these odd, dictionary words. There are no real buyers out there for them. I advise you to focus on other types of domain names first, and if you happen across a word .com, then and only then should you consider acquiring it.
Two word Generic .com
These domain names are the bread and butter of the industry. They are priceable in the end-user “sweet spot” ($5k-$15k), and it’s much easier to pick up these domain names at wholesale prices.
A while back, I managed to acquire SlowDown.com for a mere $4k. I put up a landing page and within a couple of weeks received an inbound offer on the domain name and ended up negotiating, and closing the sale at $15k. That is how much power a generic, two word .com domain name has. They offer a variety of possibilities all within an affordable budget range for you and your future buyers.
GEO + Keyword
The best bang for your buck will be GEO + Keyword .coms. Think about the possibilities when you get your hands on a domain name like DenverRealEstate.com, LosAngelesPlumbing.com, or even NewYorkLawyer.com.
If you are into cold calling, and looking for quick flips, your money is best spent here. You can pick up a proper GEO + Keyword for much less than $1k and turn around and sell it the same day for a handsome profit. Some investors make their living with these types of domains.
One Word Generic .org
There are more not for profit organizations than I can count. These are also a fantastic investment. However, you will likely have to play the long game on these. Not for profits and outbound marketing do not mix. Let them reach out to you. Be careful here as well, as you will likely be waiting quite a while, so make sure you have them listed on every marketplace as your buyers may not be as internet savvy as you are. Read more on Best Places to Sell Domain Names.
Deciding on Your Investment Strategy
Now that you have an idea of the best types of domain names to invest in, you need to decide how you want to move forward.
Are you going to play the long game? If so, that can drastically change your approach. Do you want to flip domains quickly? Or do you want a blend of both worlds?
The long game is all about forward thinking. What kind of technologies will be present in the future? What kind of businesses will be going online? What sort of company has the longevity that will ensure your investments will still hold value in the future?
A few that come to mind are Real Estate, Insurance, Health, Money, and Travel. There are hundreds of others, of course, but you should focus on the biggest industries as they tend to die off less frequently than the smaller ones.
Also, GEO + Keyword domain names with big industry keywords are all but guaranteed to always be around. So if you invest in these, you can also play the long game with them.
Quick flipping is all about value investing. Finding an undervalued domain name is like spotting Bigfoot in the wild. Tough to do, but once you master the art form, you can flip the domain names the same day.
One word generic .com’s and GEO + Keyword domain names are your best friends here. With the one word .com’s you can turn and flip it to an investor. With the GEO + Keyword domain names you can pick up the phone and call local businesses, tell them the benefits, negotiate a price and wrap up the deal within a few hours of acquiring the domain name.
Hybrid of Long Game and Quick Flipping
By far the safest strategy as it allows you the ability to make some quick returns to cover your operating costs, and generate you some recurring income until your long game domain names sell.
With only $1,000 to spend, you can take half and invest it for quick flipping, and put the other half into your long game domain names.
How Many Domain Names to Buy
The big question. How many domain names should you buy with that $1,000? Personally, I prefer to stay focused on only one, but if I had to choose more, I would invest in no more than three domains.
With three, you can dabble in a few different investment areas and diversify your approach, allowing for a learning experience to see which strategy works best for you. With three domains, you can also stay focused and not spread yourself too thin. However, this does limit the quality of domain name you can buy.
All being said, I recommend you focus on acquiring just one domain name at a time. Spend the entire $1,000 budget (but don’t overpay) on the best possible domain name you can find and spend the following weeks trying to at least double your investment.
The Domain King himself, Rick Schwartz, has a remarkable post about how you can make a million dollars in domains in 36 months. And it all starts with $1,000: read it here.
Now that you have a an investment strategy in mind, you can start browsing the marketplaces, forums, and investor portfolios to find the perfect domain name to invest your first $1,000 in. Take your time, this investment will make or break you. If you are just starting out, this will likely be your biggest learning experience. Don’t be like the rest of us who flushed money down the drain when we first started, be different. Think. Research. And then, when you are 100% certain, spend your hard earned money.