Editor’s Note: Many investors have become frustrated with the small returns offered by traditional investments, especially in light of recent events in Wall Street and the Real Estate Market. This article looks at an a non-traditional investment opportunity that could provide positive results for you. As with all investments, do your research and make sure you understand the potential risks and rewards.
As interest rates, real estate investments, and volatile stock prices continue to disappoint investors, many are turning to the World Wide Web for higher returns, lower risk, and better growth potential for their money.
Investors Are Frustrated With Low ROIs
If you’ve checked your bank statements from the last few years, then you’ve noticed that the interest on your savings is near zero. Even traditional CD rates, which historically have higher-than-average returns, are sputtering around a measly one percent. At this rate, inflation is higher than interest, which means that your money loses value the longer it sits in the bank.
Real estate investments and the stock market aren’t proving much better. Market volatility is scaring investors out of traditional investments, especially since many economists predict a double dip recession to continue to drive down real estate prices.
As a result, investors are looking to alternative places to put their money, and many are finding a haven in one of the financial world’s best kept secrets – buying and selling websites.
Why Websites Are An Attractive Alternative
Since websites are essentially tiny businesses, they can be bought and sold just like any other asset. A key difference, however, is that websites pay “dividends” because they often earn solid incomes themselves.
Because of the instability of traditional investment vehicles, investors are discovering that they can buy incomes without having to assume the risk and headache of brick and mortar businesses. Instead, they can buy websites, which typically have similar incomes to traditional businesses, but without having to hire staff, keep inventory, or change locations. In fact, they often serve as ideal home based businesses that can be purchased for much less money than a franchise, and they require less start up capital than a new company.
Websites typically sell for between ten and twenty times the average monthly profit, which equates to 120% to 240% ROI per year, assuming that the income from the websites does not change. In more specific terms, this means that a website making $1,000 a month (be it from advertising, selling products, or from membership dues) can be purchased for as little as $10,000. These returns are absolutely unheard of in stocks, real estate, and most other businesses. With websites, these returns on investment are very common.
How To Profit From Buying and Selling Websites
The secret to making money by buying and selling websites is in identifying and negotiating good deals. Just like in real estate, money is made when you buy, not when you sell. If a good price is negotiated on a money making website, it can either be held for long term income, or it can be flipped for fast cash. The ROIs are higher than traditional real estate, but the needed start-up capital is significantly less.
The market is still in the infant stages for websites, so profitable, proven assets can still be scooped up for pennies on the dollar. Website auction marketplaces like Flippa.com continue to pop up, as well. As investors wake up to the fact that websites are legitimate businesses that provide better ROIs than traditional investments, the market should only continue to improve over the next decade.
Is buying websites for you?
Buying websites can be a great opportunity if you know where to look and how to value a site. But it isn’t for everyone. At the minimum, you need to understand the fundamentals of how websites get traffic and make money. Tech skills are helpful, but not always necessary because you can easily find contractors who can help transfer the domain and upload the site’s files to your webhost (check out oDesk or eLance.com for freelance workers). If you are looking for an alternative investment opportunity, then look into buying and selling websites.
About the Author: Ryan Moran writes about buying and selling websites. To learn more about how buying and selling websites can boost your investment income and trump real estate and stock market returns, visit eTycoon.net.