The real estate business has been associated with the traditional physical ways of making money.
The common one perhaps is owning a rental property and earning rental income from it where the rent received exceeds your mortgage repayment and insurance. A 13-20% return isn’t bad after all, right?
In retrospect, the real estate market is experiencing rapid digitization as the days go by. This has birthed digital real estate investment.
People are earning money from real estate behind their computer screens. Besides, digital real estate investments produce higher ROI compared to ‘offline’ investment options. Talk of 30-100% returns.
With all honesty, these investments are riskier. However, they have advantages as well. For instance, they save you the agony of having to deal with stubborn tenants and carrying out maintenance and repairs.
The downside of the traditional real estate is the high cost of entry. There are several ways to venture into it with little to no money, but with the rising competition, the price of real estate continues to rise.
This is where digital real estate investment comes in. Some domains cost as low as $1, and you can host them for a monthly fee of less than $5.
What is Digital Real Estate?
You must be familiar with how traditional real estate investment works. You acquire a piece of land or house and rent it or sell it for a profit.
This is not any different from digital real estate. The blogs, vlogs, websites, and domain names you interact with are all internet property.
You can buy and sell or produce and sell with digital real estate the same way you do with the land. Just the same way real estate is the land and anything erected on it, digital real estate is a domain and anything built as part of that domain.
Simply put, digital real estate refers to social media handles, domain names, or anything that takes space on the internet as belonging to a particular person.
There are certain similarities between traditional real estate and digital real estate. Some of them are:
- Appreciation of value
- Ability to be rented
With digital real estate, you typically don’t own the property. It is often just an account held with a certain internet organization that controls how you utilize it. On the contrary, real estate can be sold or transferred to another party.
When asked what they understand by digital real estate, most people point to domains. So let us briefly look at what a domain is and its functions in digital real estate.
What is a Domain?
Domains are the websites we visit daily. When people use the term ‘domain’ they are referring to a domain name, which is a set of characters that designate the location of a website online.
Domains such as Google.com have millions of people visiting them in many ways. The monetization of domains is not a difficult task; there are many methods one can use.
What Do You Need To Get Started?
One of the reasons digital real estate has not gained popularity as rapidly as it should is because many people shy away from it thinking that they need to have technical skills and knowledge and experience in web design for them to build websites.
That is not the case. You do not need any special training or experience to set up and run a website and start operating your digital real estate business. With modern technology, even those without technical know-how can build professional websites.
For example, with WordPress, you can build your professional website by just a click.
Acquiring a Website
You can get to own a website by either buying an already-established one or by creating a new one. Both options have their advantages and disadvantages.
Choose one depending on your investment goals and strategies.
For instance, you have to work extremely hard if you consider building your website, and establishing it before you can start earning from it also takes time, even though it’s relatively cheaper.
It is also quite costly to buy an established one. On the other hand, you can start making profits from it as soon as you purchase it since you acquire it at a time when it is already making profits.
1. Building your website
If you have chosen to create your own anew, just dedicate a little time to the work and get started as soon as you think of it.
You will first need to acquire a domain name and a web hosting account. You will have to pay for these. One can’t work without the other.
Secondly, create a WordPress website. You can only complete this stage if you have already a domain name and hosting. This usually costs less than $100.
WordPress is used by over 30% of websites. It is the most used website-building platform. To set it up, just click through your web hosting service and you’re good to go.
After customizing your website, add pages and content to the website. Lastly, set up the navigation menu. You can add an online store if you want to, but this is not a must.
2. Buying established websites
Do you have enough money to buy an established website? Flippa is one of the most popular marketplaces for websites. You can purchase them through website auctions.
From the listings, you will get to know the amount of money the website generates monthly before purchasing it. You will also get to know the digital monetization strategy it applies to generate revenue.
There is a catch! You can’t trust all listings. Some could present you with misinformation on the amount of money generated and the monetization strategy.
It would be wise to do your research and analyze the website. Check its SEO using tools such as SEMrush. Confirm if the stated number of visitors to the website is correct.
To save yourself the hustle, hire a brokerage firm to help you get value for your money.
How You Can Make Money from Your Real Estate Website
Once you have acquired your website, what next? You need to generate traffic to your website by creating content, preferably consistently. You can use Google’s Keyword Planner to know the keywords that people search for.
If you are not able to actively promote your website because you are either too busy, or you do not have the expertise, you can hire freelancers to help you generate content. Sites like Upwork connect you with freelancers at affordable prices.
Once you have generated enough traffic to your website, you can monetize that traffic in these 5 different ways:
- Affiliate Marketing
The main goal of affiliate marketing is having your visitors and users purchase through your links and recommendations.
You get paid a certain fixed fee or percentage of the sale as your pay. Many bloggers make money this way. Several affiliate programs have partnered with many companies.
Programs such as Amazon Affiliates allow you to be more specific on products you’d like to link to. This way, you can narrow down to real estate companies and products.
You can display ads on your website and get paid for it. There are two ways you can earn money by displaying ads. The first way is through impressions where you earn money every time the ad loads.
Secondly, you can earn every time the ad on your website is clicked by viewers. To get paid for displaying ads, you can use Google AdSense. However, it is usually limiting since it restricts the kind of ads that it will display for you.
You can also apply to other ad networks though. If your website grows to be very big, you can make direct ads where you work with specific companies to directly display targeted ads.
- Your product or service sale
Do you have a real estate product or service that people could be interested in? The good news is that you can sell these on your website
Talk about real estate eBooks, courses, software, and merchandise. Services you can provide in exchange for money include real estate consultancy and coaching.
These are all amazing ways to make money from your website especially if you are passionate about them.
- Sponsored content
Advertisers will often ask you to sponsor blog posts that promote their brands on your website.
The advertiser hires you as an influencer or publisher. You will get paid for having an article on their product(s) upon your blog.
- Subscription service
You can provide exclusive content to readers who are willing to pay a certain amount of money to view them.
To pull this off, you need to have amazing free content and great premium content to make the fee you are charging worth the while to your viewers.
- The Risks Inherent
Since you can’t own digital real estate as you would real estate, you must always remember that your control over the property is restricted.
Social media accounts, for instance, maybe terminated for being inactive. Your business can be potentially impacted if the rules, terms, and conditions of engagement change.
Therefore, you have to carry out extensive research to know what kind of digital real estate you are investing in.
Ensure that you are well aware of the specific terms and conditions to mitigate against possible future inconveniences.
Consider diversifying your portfolio as you would traditional real estate investment. For instance, you can blog as you also sell online courses and eBooks. You can start a vlog and later on think of having a podcast up.
With housing prices increasing rapidly, traditional real estate investment is becoming increasingly expensive and harder.
Starting an online business, and building a digital brand has never made so much sense. It has been made even easier by the advancement of technology.
All it takes is to have access to a computer, internet connectivity, the will to do it, and a little cash to get you started. Of importance is also understanding the legal background of digital real estate investment.
Acquaint yourself with the legalities of registering and using digital real estate. You will keep the rules that are not under your control in check, and ensure they do not adversely impact your business.
Are you planning to put all your digital real estate eggs in one basket? That would not be a good idea, especially in the long-run.
Once you have successfully established one, consider exploring other available options as you nurture the existing businesses. Exercise caution as you do this!
Since you probably want to go big, as you diversify your portfolio, you can create a virtual team to work alongside with to avoid being overwhelmed by the work.