I’ve become a big fan of leasing domain names. As a domain owner, when you’re able to work out a mutually beneficial lease deal, there are many benefits and few drawbacks. I am pretty sure we’ll see more lease deals in the next few years than before.
I want to offer my thoughts on why leasing is a great idea from a domain investor’s perspective and also want to share why I think it’s advantageous for an end user to lease a domain name.
I believe there are many advantages and benefits to leasing a domain name, and I want to share my reasons below. You are more than welcome to share your thoughts as well.
Here are 5 reasons why I think leasing domain names is a great idea for domain owners:
- Consistent revenue stream that is greater than the existant PPC earnings or advertising revenue without the work (if you developed on your own).
- With domain valuations down from 2006-2008 highs, you can keep your domain names without selling at arguably lower valuations.
- Someone else builds value on your domain name, both in terms of traffic and goodwill, which you will realize should the lease term end without renewal.
- Can realize a much higher sale price if you do a lease to own or purchase strike price in your agreement.
- Possible tax advantages to collecting revenue over time and/or treating leased domain names differently than inventory (obviously speak with an accountant – I have a CPA handle mine).
Here are 5 reasons why I think leasing domain names is a great idea for end users:
- Spend less money up front on a domain name, allowing funding to be spent on building the product or service and marketing it.
- Can work with the domain name owner to agree on a fair purchase price or lease to own deal for the domain name in the future, allowing an idea to be built out before committing the capital.
- If the business doesn’t work out, the domain name can be given back to the domain name owner without having to find another buyer for it.
- Business can be built and grown without having to spend a great sum of money at one time.
- There may be tax advantages depending on how you classify domain names (obviously speak with an accountant – I have a CPA handle mine).