from the hip

If you want to speculate in real estate, but lack the funds for it, you should not despair. Trading in digital real estate is considerably less expensive, but can still make you good money.

The number of real estate speculators on the internet is on the rise. The tricks of the trade are relatively few and easy to learn. The risks are limited, and the opportunities growing. There’s still a lot of land available on the internet.

Here’s what you do:

1. Find one or several great generic domain names. Domain names are the addresses of websites which follow ‘www’ and end with ‘.com’ or ‘.co.uk’. A generic name could be “vodka”, “weeklyflowers”, or “freeadvice”.

Usually, .com and .co.uk names are the best, as those are the most likely to be used on the internet and the ones most in demand.

So, a generic domain could be vodka.com or weeklyflowers.co.uk.

2. Buy the domain at some or other site that sells domain names, such as godaddy.com or sedo.com.

3. Go and park it. A number of services give you the opportunity to park your site. No programming is required. They will set up a standard page and add some ads to it.

And this is the first trick: Ever so often, if you have a good domain name, somebody will type that name directly into the browser window. Your site will receive a hit, and if they click the add (a percentage will), bingo - you make money!

This is what Guardian writes about a virtual real estate trader named Neil Stanley:

Neil Stanley goes to bed each night knowing he will wake up a little richer. All over the world, the clicks of computer mice are depositing a few more pounds into his account. His secret is that he was smart enough to ask: what’s in a name?

…

He is one of a growing band of cyber-speculators able to make a living from buying and selling domain names at a substantial profit. No effort or expertise in building websites is required. Instead, a PC with broadband connectivity and an eye for a popular generic domain is enough to draw traffic and unlock a fortune. Recently Stanley was involved in a deal which registered a domain name for almost nothing and sold it for $40,000 a few weeks later.

‘It’s amazing how many people go to the address bar and type in a generic name instead of going to Google,’ said the 44-year-old from Bath. ‘If you’ve got mortgages.co.uk, you’ve got a licence to print money. It’s an industry in its infancy and there’s a bit of a gold rush on at the moment. It’s amazing that the UK hasn’t really woken up to it yet.

‘The analogy is real estate. The internet got invented and all the land is being bought up. In 10 years’ time any word you can think of will be taken: all the real estate will be gone. If one day someone wants to build a skyscraper on it, you’ve made a fortune.’

4. And there’s the second trick: Go to an online auction site and offer your domain for sale, unless you intend to use it or want to simply let it remain parked. See if anybody wants to buy it. And while you are waiting, if you’ve picked the right name, you may make money!

Stanley acquired kids.co.uk and is planning to make it a non-profit site for children, but leaves the majority of his domain names sitting idle, or ‘parked’. This means that they are hosted by a specialist website as a simple, customised template containing relevant adverts. Every time someone visits the page and clicks on one of the adverts, the name owner and the website share revenue.

Sedo, or ‘Search Engine for Domain Offers’, claims to have the world’s biggest database of names for sale, with more than 10.5 million listings. Its total sales in 2007 amounted to £37m. In Britain it has overseen the sale of sport.co.uk for £135,000 and mobile.co.uk for £120,000. Sedo also ‘parks’ more than 3 million domains and paid out £25m to customers last year.

Other sites doing this are yourdomaintrade.com, godaddy.com, and others. And, to inspire you further, here are the 10 most valuable domain names auctioned by Sedo:

1 Vodka.com, $3m

2 Chinese.com, $1.1m

3 Website.com, $750,000

4 Telecom.com, $700,000

5 Annuity.com, $600,000

6 Gays.com, $500,000

7 Gibraltar.com, $360,000

8 Sport.co.uk, $265,000

9 Mobile.co.uk, $247,000

10 Fly.co.uk, $180,000

So, what do you say? Something to check out? A lot of people will make money on the information highway this way! It could be you.

See also:

Dell suit reveals lucrative trade in domain names
Domain names price list
Domain names forum
ChowCow forums