When legendary investor Igal Lichtman died, the sale of his assets generated almost $75,000.
Did he put his money in vehicles?
No.
Artwork?
No.
Cryptocurrency?
No.
Whether you’re just getting started with domains or you’ve already invested in dozens, you’ve probably noticed like Lichtman’s heirs did that it can be difficult to effectively manage a domain portfolio if you don’t have a system and tools in place.
So in this guide, we’re going to give you some modern tips on building a strong domain portfolio as well as a key tool for managing it smarter.
What is a Domain Portfolio?
First, let’s make sure we’re all on the same page when discussing domains and domain portfolios.
A domain name is the URL you would type into your browser’s address bar to visit a particular website. So, for example, the domain name for Google is google.com.
A domain is like an address for your website. If your website was a location, the domain name would be the address you’d give people to find it.
This means that a domain portfolio, just like any other investment portfolio, is a collection of all the domain names in which you’ve invested.
How to Build a Strong Domain Portfolio
In this section we’ll walk you through several steps for creating a great domain portfolio that delivers on your goals.
Be Prepared for How Long It’s Going to Take
First and foremost, it’s important you keep in mind that a successful domain name investor is a patient one.
In fact, experienced domain investor and educator Michael Cyger even coined the 1,000-day rule to help everyday investors understand what it takes to build a domain portfolio that steadily generates returns.
According to him, it takes an average of 1,000 days — broken down into an hour a day for six days a week over the course of three years — before the part-time domain investor has enough experience to understand the ins and outs of the market, to choose domain names that will sell well, and to create a replicable system for doing it over and over again.
Of course, full-time investors — especially those who choose to focus on domains specifically — can shorten the time it takes to reach a profitable point with their domain portfolio.
The time it takes to generate a profit is due, in part, to the nature of domain investing. Even once you’ve found a promising domain name, that doesn’t mean the right person is ready to buy it. It will take the right buyer time to develop a brand and choose an ideal domain name, get to the step where they’re ready to set up their website and purchase a domain, and then work with you to negotiate a purchase.
Choose Your Domain Investment Strategy
There are a couple of main strategies that most investors follow when it comes to investing in domains.
Purchase Defensive Domains
Brands sometimes purchase domains that are closely related to their brand name or website URL. Businesses do this in order to defend themselves against competitors who could purchase these names to trick or even steal their customers.
When you understand this defensive purchasing strategy, you can make your own plan for purchasing domain names that you think businesses would be interested in buying to defend themselves against competitors.
We recommend you start by registering or purchasing domains in highly competitive industries that include slight misspellings, modifiers, or other alternatives.
For example, the business that owns lawncarecharleston.com might be interested in also purchasing domains like lawncarecharlestonsc.com (modifier), lawncaresouthcarolina.com (alternative), or lawncarecharlestin.com (misspelling).
Target Promotional Domains
In a somewhat similar strategy, businesses sometimes also purchase domains that they think they might want to use in the future to promote new locations, new services, or new products.
Because it can be quite difficult to predict any business’s expansion plans without inside knowledge, a good way to target promotional domains is to keep it local.
For example, if the business that owns dundermifflin.com is rapidly expanding its real estate holdings in your town of Scranton, PA, it might be in your best interest to register or purchase existing domain names like dundermifflinscranton.com, dundermifflinpa.com, dundermifflinus.com, dundermifflininternational.com, and so on to get ahead of their expansion.
Come Up with Your Own Domain Names
Aside from building a domain portfolio that focuses on existing businesses, another — and perhaps more affordable — option is to register or purchase commonplace domain names that a person or business may eventually be interested in.
With this strategy, you’re focusing on purchasing a higher number of more affordable domains with the hope that some of them will be sellable at some point.
And whether your plan is to reach out to potential buyers or to sit back and play the long game waiting for buyers to come to you, here are several categories in which you can shop for or register domain names to beef up your portfolio:
Generic Domains
Generic domain names describe general products, services, locations, and other high-level topics. Domain names that focus on emerging ideas — such as cryptocurrency — can pay off while still being generic and on the affordable end of the spectrum.
Business Types
Professions are another area where domain names are often bought and sold. For example, bestbaker.com might be very desirable for an emerging cake bakery.
Geographic Areas
Adding a location to a more generic domain name can make it more desirable to buyers. For example, the above bakery might be willing to pay more for a domain name like bestbakerbrooklyn.com that helps capture search traffic and defines their business a bit more clearly.
Timely Names
Registering or buying domain names that feature concerts, sports games, and other recurring or current events that need websites can make for a great investment.
Make Your Purchase(s)
There are a couple of different ways to make purchases to build up your domain portfolio.
Often the same domain registrars that reserve and assign IP addresses to domain names, like the popular GoDaddy, also facilitate both direct sales and auctions of domains.
There are also online marketplaces like Sedo that specialize in hosting domain sales.
When it comes to selling, you can also put a “for sale” landing page on the domain which you wish to sell to let anyone who visits know that it’s available.
Never Stop Diversifying
Diversification is the practice of building a balanced portfolio that includes investments from a variety of sectors. When your investments are balanced, sudden dips in any one sector won’t totally drain your accounts.
It’s important to remember to diversify even within the domain name sector. Instead of putting all your money into one or a few expensive domain names, it’s generally advised to spread your money across more domain names that you can afford to take a while to sell.
Why You Need a Smart Solution for Managing Your Domain Portfolio
Choosing and purchasing domains is only half of being a successful domain investor.
The other half is figuring out how to manage your domain portfolio.
Why?
Because if you’re making any money, you’re probably dealing with a widely diversified portfolio featuring hundreds or even thousands of domain names.
It takes meticulous management to keep each domain name attached to the right registrar and stay on top of renewing and paying the fees for each domain on time.
Aside from admin tasks, you also want to find a way to manage domain names so that you’re selling them at their peak value.
And if you’re like most everyday investors who are trying to do all this important timing and upkeep on top of also managing a portfolio of other assets and hold down some kind of job — the truth is you’re probably just not getting the most you can from your domain portfolio.
This is exactly why it’s time to work with a modern portfolio tracker that can help you monitor and even automate some of the management tasks across your entire portfolio of assets.
Manage Your Domain Portfolio Along With the Rest of Your Assets Using Kubera
Kubera is the only all-in-one portfolio tracker that enables you to sync, view, and manage even the most diverse portfolio from a single, easy-to-use dashboard.
How does Kubera do it?
First, we custom-built our infrastructure to integrate with various financial aggregators that enable our users to connect to pretty much any financial account from around the world. In fact, here you can check out the full list of the banks, brokerages, crypto exchanges and wallets, and other financial institutions to which Kubera connects
Then, we integrated stock and cryptocurrency tickers so that market investors could keep an eye on the value of their investments in real-time.
And for home, vehicle, and — you guessed it — domain name investors, we work with the experts (such as EstiBot, Zillow in the U.S., and more) to feed your Kubera dashboard with the most up to date market data when you add these types of assets to your profile (see it in action here).
For everything else, our flexible fields enable you to add the details for almost any kind of asset — collectibles, real estate holdings, and more.
In addition, we built out our recap feature to give you the best view of how all of your investments are performing, how your asset allocation is holding up, and how your net worth is gaining over time.
And finally, Kubera’s beneficiary management and safe deposit box features guarantee the safe transfer of all your assets and associated information to your chosen heir. This makes it so that the domain portfolio you worked so hard to build doesn’t have to dissolve even when you aren’t able to actively manage it anymore.
To build and manage a better domain portfolio, Sign up for a Kubera subscription.
Or, if you’re a financial professional helping your client manage their domain portfolio, Kubera has a white-label solution that we built just for you.
Our white-label option is the only all-in-one solution that gives you insight into all of your clients’ modern assets — crypto, domain names, and beyond — and is actually easy for them to keep up to date.
Learn more about white labeling Kubera here or contact us at hello@kubera.com for a demo.
