Buy a house or buy more domains?

[James]

People are always amazed that I never invest in bricks and mortar. They think I'm crazy to be wasting money on domain names. Is there any sense to what they are telling me? Should I buy a house, or buy more domains?

 

[rob]

People are always amazed that I never invest in bricks and mortar. They think I'm crazy to be wasting money on domain names. Is there any sense to what they are telling me? Should I buy a house, or buy more domains?

use the mortgage to buy some of mine

 

[aquanuke]

If you lived in a studio flat in Peckham and owned a name like casino co uk then you probs just escaped from a loony bin.

If you mean 2nd / 3rd houses for investment/rental then Ive tried that and its not my cup of tea. Too much hassle with rents, damages etc.. I ended up leaving properties empty paying out on tax, bills etc.

Really depends what sort of person you are. Also property developers who knock down these fantastic old houses to make a block of flats.. They just did that to one couple along from me, crazy to think its been there like 100+ years and in one day its gone

 

[Pred]

If you lived in a studio flat in Peckham and owned a name like casino co uk then you probs just escaped from a loony bin.

If you mean 2nd / 3rd houses for investment/rental then Ive tried that and its not my cup of tea. Too much hassle with rents, damages etc.. I ended up leaving properties empty paying out on tax, bills etc.

Really depends what sort of person you are. Also property developers who knock down these fantastic old houses to make a block of flats.. They just did that to one couple along from me, crazy to think its been there like 100+ years and in one day its gone

I agree 100%

 

[aquanuke]

Also property developers who knock down these fantastic old houses to make a block of flats.. They just did that to one couple along from me, crazy to think its been there like 100+ years and in one day its gone

And also means Ive got to live next to a herd of tossers, rather then the sweet old dear with 50 cats and her old man telling me stories about World War One. Just because it needed a new roof, but some suits would make more money making cramped accommodation going into the sky

 

[Edwin]

If you did decide to spend a house-like amount on domain names (100,000 pounds++) then it's probably going to be safer to buy a handful of "really great" domains rather than dozens or hundreds of "good" domains.

For instance, if you picked up half a dozen names (for 100,000 pounds) that together brought in a steady 1,000 pounds in revenue a month when parked, that's essentially a 12% net return on investment (since your servicing and upkeep costs are zero, unlike in the case of property rental)

On the other hand, domains could drop in value significantly on long-scale investment timeframes (10 years+) - it's all a big unknown at this point.

 

[rob]

For instance, if you picked up half a dozen names (for 100,000 pounds) that together brought in a steady 1,000 pounds in revenue a month when parked, that's essentially a 12% net return on investment (since your servicing and upkeep costs are zero, unlike in the case of property rental)

However by that :

£100k for 6 names = £16k a name , are there really that many 'great' names going for 16k a pop?

I suppose it all comes down to the name itself. Personally I think you would be looking to get 1-2 truly great names for £100k - but again it depends on definition of great

 

[philipp]

£100k for 6 names = £16k a name , are there really that many 'great' names going for 16k a pop?

£16k would make a good deposit on many rental properties outside London. I haven't regretted going into lettings (yet), despite having to clear up an inordinate amount of filth when tenants leave - and boy do some people leave them in a state. There's a reasonable amount of work involved but I quite enjoy a bit of physical work, it makes a change from computers anyway. Yields are generally small in my experience, but worthwhile, and appreciation is good although capital gains tax applies when you sell a property that's not your primary residence.

P.

 

[Edwin]

However by that :

£100k for 6 names = £16k a name , are there really that many 'great' names going for 16k a pop?

I think if you were really willing to do the legwork, you could find 6 end-users who were willing to sell "great" names for 16k each. You might have to approach 100 candidates or more to get 6, but some folks might just need the money more than an under-used domain.

No good talking to fellow domain investors, most likely - I'm talking about companies or individuals who regged a great domain years ago but still haven't got around to doing anything very meaningful with it (first clue would probably have to be: is it parked with a known parking company? If so, skip it...)

 

[lesurf]

I know it's an obvious answer but I would do a mixture of both if you have the cash to do so.

Despite everyone saying the housing market has peaked I actually think property is a safe bet for the next five to ten years. The price increases are purely down to supply and demand, there simply isn't enough property for the increasingly fragmented population (singletons, divorcees, immigrants etc). Where as in the past four people would live in a 3 bed house, that house may now only house one person.

Multiply that across the whole country and add it to lots of people coming from the new EU countries to work and you have a serious housing shortage which is magnified in the honeypot of the South East of England becuase of the jobs and wealth concentration.

Low supply -> high demand -> price increases. Ok it's hassle being a landlord but no bank will give you the kind of return property will and you are buying an asset which is extremely unlikely to increase in value over the mortgage term.

Domains are a very low cost way of making good cash I think, property is more proven. I agree with Edwin, you would be best blowing larger sums on quality generics but getting these would be the problem I feel. Plus it only takes a very small change in Nominet's thinking to seriously affect the value of domains e.g. overnight they bring out .uk rather than .co.uk

Having said that there are quality generics out there to be had for relatively small sums if you are clever/cheeky with your offers. I purchased a quality generic recently for what my mates said what a ridiculous sum (I thought I got a bargain btw) but have had offers for double what I paid already.

 

[denchomsky]

If you did decide to spend a house-like amount on domain names (100,000 pounds++) then it's probably going to be safer to buy a handful of "really great" domains rather than dozens or hundreds of "good" domains.

100k wouldn't even get you a flat in a tower block in Peckham (London), of course it would be great deposit on a nice house or flat in any part of the country, but i would definately say that putting it into property in london would be your best bet, probably around Stratford (near Olympic site).

I recently bought a flat in London and in the 5 months between the offer and the exchange the value went up 5%.

 

[James]

Interesting replies...

It seems that most people here would agree that a bigger return can be made from domain names, although they are higher risk.

I have another question which kind of follows on from this: http://www.acorndomains.co.uk/general-board/13144-domain-investor-how-important-domain-sales.html

 

[Domain Channel]

People are always amazed that I never invest in bricks and mortar. They think I'm crazy to be wasting money on domain names. Is there any sense to what they are telling me? Should I buy a house, or buy more domains?

Hey James,
I am putting on a show in London 2nd Feb, you should come along, bricks & mortar vs Cyber property, no contest. I brought my 2 bed flat for 200k 5 year ago, selling today for 400k, (I had it on the market 6 months ago for 345k and it did not sell) I have paid 68k interest only, I was lucky. With development you can take an ok name paying $200 parked to $800, with almost no work, I would suggest having a look at the show on the 2nd Feb in Victoria London, Domain Channel.

The answer in short, forget bricks and mortar, you have no control over the market, with Domains you can make the market work for you. The value of Domain names is not understood by most people today, wait for another 5 years, collect rent then sell….. Have a look at The Future of Web Ads Is in Britain - New York Times