To Lease or Not To Lease?
Is there a simple answer to the this question, To Lease or Not To Lease?
I am wondering how many domain name investor has been successful in leasing their domain names recently?
I am not talking about Joint Ventures where both you and a partner decide to build a website together, I am wanting to know if you have had any success in leasing your domains only.
I got sent a list of domain names yesterday, some of the domain names are really nice premium domains and they were all offered for lease for a very low annual fee, I suspect the fee would cover the owners annual registration and give them a little profit on each domain and if they lease all the domains it would return a nice ROI and give them an easy revenue stream.
They were offering a minimum of 12 months lease on the domain names with a maximum of 6 year lease and I seriously considered taking a couple of domain names on the 12 months lease. I already had plans to start building them out in my head, The domain names I had interest in were e-commerce product domains similar to my site ScreenProtectors.co.uk I could have easily launched and sold products or drop shipped from the websites if I built them out using their domain names.
However at the back of my mind I am thinking what happens if the site takes off and I start earning some nice profits but at the end of 12 months they see the traffic and up the lease payment should I decide to renew for another 12 months or longer? What happens if I want to buy the domain name outright and we can’t agree on a price then I could be held ransom to the domain owner should we not come to an agreement the past 12 months work is at risk of being lost especially if you have built a brand around the domain name.
Another question I had was, what if I want to sell the site but I don’t own the domain and the interested purchaser can’t agree on the lease or outright price?
There is one big positive that after 12 months if the site doesn’t take off I can just hand the domain back and only have lost my time and money on development.
For time being I am going to leave domain leases as much as I think they are a great idea for certain businesses they don’t suit my current business model however that might change in the future.