When Domain Name Leasing Makes Sense

When Domain Name Leasing Makes Sense

One of the biggest challenges in setting up an online business is finding a decent .com domain at an affordable price. Even the good niche and keyword match domain with .net, .biz, and .info extensions are mostly spoken for. Businesses are left with 3 options: buy a less than desirable domain name, come up with the money to buy a good, expensive domain name or lease a good domain name. While there currently isn’t a third party platform to simplify the process of seeking out domain sellers interested in leasing, one is underway and should be available later this year. In the meantime, the option of leasing is something you might want to take the initiative to do with your domain or if you are buying, speak to a domain broker who can find domain sellers interested in leasing to you.

Why Would the Seller Lease?

Why Would the Seller Lease

If the seller is not currently doing anything with the domain and even if it is being monetized with CPC ads, the income potential for leasing the domain far outweighs other monetization models, short of building the domain out into a website. While the seller is waiting around for the 2 million dollar bid, he could be earning tens of thousands of dollars a year by leasing the domain.

Why Would the Buyer Lease?

The advantage to the lessee is the opportunity to utilize a valuable domain without coming up with a large payment up front, capitalize on the direct type-in traffic for its keywords, be in a better position to brand the domain and possibly work out an arrangement with the seller to apply lease payments towards the purchase.

Why Would the Buyer Lease

There is no loss to the seller either way: he earns money whether or not he sells the domain and can bide his time until a buyer comes along. Over several years, he might even earn more income than the sale price of the domain would have brought in. In fact, most domain sellers would do this year round if presented with the opportunity. It truly presents the domain owner with the potential to earn the most amount of money with the least amount of effort. Should the lessee invest the time building backlinks and branding the domain through various marketing efforts, those efforts will only serve to increase the value of the domain.

As much as the new gTLDs are being touted as low-cost opportunities for businesses, the biggest obstacle for any business to overcome at this time is the fact that the public is used to .com domains. Right now and in the near future, .com is assumed, type into the address bar and more valuable than any lesser extension. Any time a new extension is made available, there’s initial excitement and domain buyers grab them up, but many extensions have just fallen flat and predictions become nothing more than myths.

Until such time that the newer gTLDs become commonly recognized and memorable, the near future holds more potential for the growth of domain leasing, especially in a bad economy that inhibits buyers from being able to offer domain sellers top dollar for their premium domain names and sellers aren’t moving their domains in domain name auctions.