When it comes to investing, there are certain strategies that are entrenched, and commonly accepted as “safe” ways to build investments.
Investing in the stock market, or investing in real estate are always the “safe” route. They can set you up for a healthy retirement as long as you remain conservative.
There’s no denying that it is possible for you to make a healthy living from those investments. In fact, many millionaires have been made through working hard and making conservative investment strategies.
Now, there is really nothing wrong with taking the traditional investing route, staying conservative, and using truly reliable strategies. However, there are other strategies that have been uncovered as the internet secures a bigger part in our everyday lives.
Investing in websites has quite a few similarities to investing in physical real estate. Instead of buying property, you’re purchasing a piece of the internet.
Investing in websites is going to become more and more popular, with new investors figuring out exactly how profitable it can be every day.
If you want to diversify your investment strategies or tap into a new frontier, it is definitely worth considering investing in websites.
The Website Opportunity
It’s hard to ignore the fact that the internet or “digital real estate” is still a relatively new frontier.
With the internet being slightly over 20 years old, most conventional investors are still ignoring the power of the internet.
Right now, investing in digital real estate hasn’t demanded the same level of attention as other, more traditional investment strategies.
For the world’s super-rich investors, tapping into websites and investing in large online companies has become fairly commonplace. Many well-known investors are starting to jump on the huge opportunities that online investing presents.
Take a look at the owners of Facebook, and then look at Ashton Kutcher and how his list of online investments has been growing throughout the years.
You may not be on that level just yet but there are plenty of good reasons to invest in websites.
Key Reasons You Need To Invest In Digital Real Estate
There are numerous opportunities on the internet, all you need to do is understand how to tap into them.
Extremely Low Overheads
There’s a major shift happening in the world. Instead of people building bricks and mortar businesses, they’re building clicks and other businesses.
Building an online business helps you tap into the upside potential of those brick and mortar businesses, without the overheads. You don’t have to worry about paying rent, maintaining insurance, buying office furniture, or any other expenses that tap into your profits.
Most domain names cost less than $10 per year, and hosting costs less than $100 per year, making online businesses insanely profitable. With a few key pieces of software, you can operate the website and help it flourish while keeping your bottom line as lean as possible.
Huge Number Of Options
It doesn’t matter what your background is, or what type of investor you are, there are online businesses and websites for every type of person.
Whether you want to start small or you want to go big and invest in a 7-figure or 8-figure business, the internet is your playground.
From smaller affiliate marketing websites to larger content-focused websites, or even software-as-a-service businesses – you have a huge amount of options to choose from.
On top of how the business is structured when you buy it, you can continue to evolve the business model and add new streams of revenue. You scale the business even further, in ways that you deem necessary and appropriate.
Your Education Is Free
When you look around the internet marketing industry, it’s nearly impossible to find a topic that isn’t covered in great detail. If there is a problem that you encounter and can’t figure out on your own, chances are high that a blog post has been created to help you out.
If you are looking for places where you can learn how to grow the business that you’ve invested in, here are a few different examples:
- NichePursuits.com – Niche Pursuits is run by Spencer Haws, and provides in-depth content catered specifically to new business owners who are looking to build and grow their online presence. His primary focus is on websites.
- Backlinko.com – Brian Dean is another well-respected, go-to marketer for information about building your business. His focus is on growing your reach and driving new visitors (and customers) to your website.
- SmartPassiveIncome.com – It would be impossible to make a resource list without mentioning Pat Flynn’s Smart Passive Income. His blog is full of information catered toward beginners, helping them learn how to build, grow, and sustain their online business.
Easy To Outsource and Scale
It doesn’t matter if you’re a complete beginner, and consider yourself to be technically illiterate.
Building and growing an online business doesn’t necessarily require your skills. Right now, there are countless different virtual assistants, freelancers, professionals, and agencies that are more than willing to help you grow the business and sustain its growth.
You can use a wide range of services to find staff and also choose the skill levels and price points that suit you.
How To Find Businesses For Sale
If you’ve decided that investing in a website or digital business is the right move for you, you need to figure out how to actually start finding them.
There are a few different ways you can track down businesses currently being sold and evaluate them to figure out how much they’re worth and what you’re willing to offer.
- DigitalExits.com – Digital Exits is a reputable brokerage that focuses on larger value deals however it is possible to find lower priced sites in their inventory too.
- EmpireFlippers.com – Empire Flippers is a semi-public marketplace founded by Justin Cookie and Joseph Magnotti. The platform focuses on smaller deals, priced $50,000 and below. If you’re looking for a lower-end deal, Empire Flippers may be for you.
- FEInternational.com – FEInternational is another broker that has developed a good reputation in the industry. Their marketplace houses deals as low as 4-figures, going up into the high-end at 7-figures. You can see a wide range of sites at FEI.
- Flippa.com – Flippa is a public marketplace that has quite a few lower-end businesses for sale. Because it is public, though, you will need to beware because there are a large number of scams that you’ll have to navigate your way through. Definitely do your due diligence and buyer beware.
How Much To Pay For An Online Business
This is another topic for an entirely different post, and would be far too complicated to cover with the attention it requires in a single article.
In short, most buyers are paying anywhere from 12x to 30x the monthly net profits of a business when they’re ready to invest in it.
That means, for a business generation $10,000 per month, you may pay anywhere from $120,000 to $300,000 to purchase the business. These large fluctuations are determined by the business model, how volatile the revenue and traffic is, and how the business has been structured.
How much you, in particular, pay for a business is largely determined by your own negotiation skills. Also factor in how well you’re able to structure the deal and negotiate the asking price down.
Just because digital real estate isn’t a topic that comes up in most investor’s conversations doesn’t mean that investing in websites and online businesses is a bad idea.
It makes financial sense to invest in digital real estate rather than some other lower-return type of investments, like stocks and real estate.
There are a large amount of options available for smart buyers right now, and the number of opportunities is only going to keep going up as more and more people figure out how to start a business online.
With enough research, you can find the perfect business that’s suited to your particular skillset, your own interests, and what you want to achieve.
Earning a healthy profit and building a viable asset that is worth more than you paid for it is entirely possible when you learn how to invest in websites.
Jock is the founder of Digital Exits, an online brokerage service. Jock has been featured in Forbes and contributed to numerous websites and podcasts. He specializes in appraising and buying/selling online businesses and enjoys helping other entrepreneurs do business online.