Why do you buy domains?
Just a simple question. Why do you buy domains? Some may simply answer, because i see the values of domains rising, some may answer, because i want to develop a project under this domain.
Domain names are a great investment, but i doubt they are a great speculation object! How come? I blogged about a smart kid that made a lot of money flipping domains. There are stories all around, that one can have great success flipping names. All this is definitly true. What i want to offer you is the other view. The portfolio view. How long does it take to find a great name? How often can you sell? How long have you been in the industry and built your portfolio? How much legal risk do you have?
Domain speculation works for some. Most do not take into account that we still live in a very unliquid market and ignore the cost of oportunities, like domain research and domain sales. The values of prime generic .com’s and ccTLDs have been rising for the last decade. Investing worked for domainers that played the domaingame early on. And here i stress the definition of investing: to buy undervalued assets!
So if you are a domain buyer, ask yourself carefully: Will domain values rise for the next decades? How long do i want to hold my investment? How fast can i liquidate? What are my opportunities if i want to liquidate now?
Happy domaining and have a great day,
Namewise