FagEnd

I know domain rental is a good idea in theory, but does it actually work?

The only benefit I see from domain rentals is a guaranteed income for a pure generic, but if someone can afford to rent a generic, surely they can scrape together the cash to buy it. Can't be much difference between 3 years rental and a purchase price!

namealot

I have rented out a number of domains there are benefits for both…

They do not have to tie up cash in a domain that with technology ever increasing and new tlds etc may be worthless in years to come….? Monies saved on purchase can be used for other forms of advertising, extra stock, new equipment etc.

You have a good generic but no knowledge or ability to enter that market, Ppc, affiliate etc will not ever bring you in a great return and not looking to sell.
e.g. banking.co.uk Most of the people here would not be able to set up there own bank successfully so to rent to someone that can is ideal?

Some say they could build it up, you just take it back ? Unless you are going to set up a bank you would have to find someone to rent it to? If you have done the research it should have been market value so only getting the same again…

Most know domains are good at introducing customers and how many customers it is going to bring in a given time,The main thing is the domains have to be good ???? They can worry about you selling the domain..It’s the same as any advertising/business if you have an ad onTV do they worry the TV network is going to sell the product and kick them off?. or there landlord is going to kick them out of there property and set up there own shop?

ScottJ

The appetite for leasing is imo growing.
Granted if your talking about a £500 domain your theory fits, but if the domain is £10-£30k then leasing it at £100-£500 per month with a buy option is attractive and offers the seller more income than an immediate sale and offers the buyer the chance to build on a generic, and naturally they retain ownership/copyright of any content.

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GreyWing

Yes it does work but people will only rent off you if you have a buy now clause at the end of the contract, in my experience I haven't seen one leased without this arrangement.

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retired_member6

If I'd rented domains that I've sold to end users on the cheap, that's an income of £15k a year, compared to a one off fee up to £500. Just say 125 x £10 a month. £30 for the contract and a promise of no drs and sell on clause of five years worth of rental would at a guess, be ideal with a percentage drop down to 50% over time but no point doing that on a £10 a month domain, almost every company if risking building on a rented domain, will have £600 somewhere. Christ I sell my names cheap.

ScottJ

I have leased quite a few without a buy option, strange as it may seem, but it would be remiss of the lessee to not ask for it imo, still it happens. Depends what you offer, if you offer a buy option 100% will likely add it in, if you don't and they ask, it's a fair point.

A recent lessee had a good request I liked. The domain had been leased before and they asked about a buy option, I said it could be included at £28,000. Which was fine but they wanted the lease amended to say an option to buy would be by mutual agreement at no more than £28k. In other words in a year or two they reserved the right to negotiate a price of £28k or less, I respected that thought process and agreed.

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retired_member6

but what rental value do you put on a domain's whole worth? I'm guessing at £28k you're looking at least for 10% a year / twelve months? £250 a month, maybe 20%?

ScottJ

I just wing it Lee.

Whatever I think I can get away with, every domain is unique, as is every industry and every genre.

For leasing, I had a domain/small site that earned £300 per month in Adsense, so to lease it I asked for £500 per month, it's now been over 2 years and it's still leased out @£500pm.

Conversely I bought a nice generic, not ranked, no website, for under £800 and leased it @ £75 per month as a domain, it's also been leased out now for over 2 years, it has no buy option and I have not spoken to the lessee in 2 years.

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namealot

May help some of you thinking of leasing out domains

If you can get the full amount back on the domain in 7 years you’re doing fine, 5 excellent

It’s much easier to lease a domain 20k + than 1k

Remember to include legal cost and running cost in any calculations ?

Don’t waste your time on non generic terms.

Any domain that someone ask if it’s for sale always give them a lease option .

Tell them the benefits of leasing as opposed to buying ?.

If its less than 5k offer to lease it with domain hosting and web design etc set something up with someone who can if you cannot or at least recommend someone.

Before leasing try to get the site listed lots of links and a good web presence this will pay dividends. Don't waste money developing a site they might not want a page or couple is fine

Good place to find potential customers is new business start ups there are local authority, council and trade fairs all over the uk and internet a lot of these will not have a web presence so its one less hurdle to those that already have one. (check what stalls/business etc are booked in first),

Don’t mistake profit for income?

turnic

Scott,

Can you give some examples of leased domains of yours, please?

Thanks
TurNIC

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