This is going to be a no-BS article just like all my other articles, but I wanted to be sure to mention that if this was your first article of mine that you are reading.
"What does it take to build a good domain name portfolio in 2021?" is a good question because domain name investing is becoming more popular each year and following 2020, it has ramped up!
Are all the good domain names gone? No! Well yes, but no, because there is a domain name aftermarket, expired market, and drop market!
Domain investing is a sleeper market (not many people know about it) and it’s an estimated billion-dollar industry. It is still early and domain names are often seen as the digital real estate and function as branding powerhouses of the internet.
In the past, I would always say that a domain name investor should focus on quality before quantity. That still rings true today because I would rather see you own one good domain than ten okay domains. If you cannot afford more than one good domain, only buy one good one.
One thing that I am changing from what I would say before is, along with the quality, you need a quantity of good domains too!
If your goal is to become a full-time domain investor, you will need good domains and a solid batch of them to make it work. To get that consistent payday, you need good domains and a stack of them, or the inconsistency of the sales will sink your ship.
It is not uncommon to see a hold time of 3-5 years on average domains at an average sales price ($2K-$5K) range. Those numbers are not scientific, it is just something I see.
You can acquire 500 good domains and not sell one of them in the first year. That happens. It is okay, as long as you are prepared and know you are making proper purchases.
The higher the asking price, often, the longer the hold time. If you are a smart buyer, you can get inexpensive domains (hundreds) and sell for thousands, or even tens of thousands.
The more domains you have, the higher the chance that a UDRP will show up on one of your domains. That is $5K to defend and not likely money you will ever see again, but it’s equally important to keep your brand/image clean for any future UDRP proceedings. You must defend or at a bare minimum, clear your name with any questionable situations.
Back on track and building that portfolio.
Where should you be buying domains?
Expired domain name auctions are a default method for domain investors to fill inventory but right now, expired domain auctions are much more expensive than before and should not be your first option. It is a tricky game with domains being renewed after auctions and research time is valuable.
I would not totally skip expired auctions but be aware of niches you want to focus on and stick to your budget on each domain. There are more than one or two expired auction services, so play around and do not get stuck at just the most popular place.
If you find yourself spending a lot of time researching and you are not winning any expired auctions, stop! Reassess and keep trying new things.
Domains that are in "Pending Delete" status are an option. There is always a 5-day list ahead of auctions and all PendingDelete status domains get released from the registry. There are a lot of domain registrars (most corporate ones) that do not have partners (due to conflicts of interest) and expired domains follow the normal drop process. DropCatch.com remains the leader of this game and they even offer discount backorders, so that is something to checkout. Backorders can be as low as domain registration fees.
Go direct. With GDPR and CCPA (privacy laws) it has nearly blanked public WHOIS records, so this process gets harder and harder by the day to reach domain owners directly. It can be done and can be highly rewarding, but it is going to take research time, some domain tools, experience, and some luck.
Trend spotter. New terms are coined daily, some with longer legs than others. It seems like each week there is a new trend (VR, 3D, NFT’s, AI etc.), so if you can stay ahead of the curve there can be a few wins and quick flips, just use caution with registering a bunch of duds because that will put you out of the ballgame early.
As I've said before, domain investing is a fine art, and it will take some trial and error to see if domain investing is a right fit for you. It is not for everybody, but I see new people within the domain industry all the time.
Domain investing is surely not a get-rich-quick business. Quick flips and high-dollar domain sales do happen, so that is part of the daily grind, and hopefully your number is called sooner and more often than most.
Thankfully, the domain industry and places like Domaining.com and domain name forums like NamePros.com are bursting at the seams with wonderful, helpful people that graciously share helpful information focused on domain names. It will be up to you to take in this free knowledge, ignore the noise and know what a good domain name is and why someone will pay good money for it.
Build your portfolio with confidence. I wish it were easier than buying a bunch of domains and “waiting” to sell them, but that is the best method and process that is common. Keep in mind that many of the domains selling now, were registered some 20+ years ago, with some much more recently. Domain investing is certainly takes a special knack and is not the easiest one to know if you are picking winners right away.