Digital real estate sounds like just another superfluous investment opportunity that thrives through sleazy sales emails and telemarketing.
But in reality, it’s quite the opposite. Digital real estate can provide a tremendous opportunity for both entrepreneurs and investors looking to make money online.
In this post, I’ll explore what digital real estate is, how you can invest in digital real estate, how much money you can make with digital real estate and much more. Let’s get started!
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What is Digital Real Estate?
Digital real estate can be multiple “things”.
It can be defined as any digital asset that you own that can be bought or sold. As you can see, this is a very vague description. That’s because digital real estate is so versatile. Just as there are many forms of physical real estate, the same goes for digital real estate.
Examples of Digital Real Estate
Digital real estate can include domain names, websites, blogs, digital products, apps, social media accounts, email lists, NFTs, intellectual property, cryptocurrency, and more. Any digital asset that can be bought or sold is likely a piece of digital real estate.
You can think of digital real estate as virtual property. Just like physical property, digital real estate will often increase in value as long as it is maintained correctly.
Some people might also consider cryptocurrencies like Bitcoin or Ethereum digital real estate because it is a digital currency that can be bought and sold.
What is Virtual Real Estate?
The term virtual real estate and digital real estate are mostly interchangeable. Digital assets like domain names, social media accounts, and digital currencies can all be referenced to as virtual real estate.
Some people might use virtual land and virtual real estate to describe land in virtual reality.
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What is the Metaverse?
Recently, Mark Zuckerberg introduced the idea of the metaverse (although the term has been debated as being introduced in 1992) – a virtual world that allows people to interact online. The virtual world will allow people to purchase good and services in the augmented realty world. You can think of the virtual world similar to a video game with digital property, digital land, and digital avatars.
While the metaverse is still in early phases, many companies are starting to gear up for its mainstream arrival. Companies are beginning to file patents for digital property.
There are a couple of main metaverse platforms that have begun to sell digital land. Just like in the physical world, digital land and online real estate is limited and people are willing to pay real money to purchase the asset.
What are NFTs?
NFTs are also known as non-fungible tokens. So what does that mean?
In the simplest terms, NFTs are a digital token that represents something. It is stored on a blockchain so it cannot be replicated.
For example, it’s possible to purchase an NFT for digital files like pieces of art. This gives you exclusive ownership of the file that no one else has.
Top Reasons to Invest in Digital Real Estate
Investing in digital real estate can be life-changing. It provides several advantages over other investments that I’ll explore below.
Every investor knows the importance of diversification, and digital real estate can help you to lower your risk by diversifying your portfolio.
Digital real estate is here to stay.
As the internet and technology continue to evolve, there’s no doubt digital real estate will continue to grow in line making digital real estate investing a great opportunity for both novice and experienced investors.
Personal finance expert, Suze Orman, stated that cryptocurrency “be a part of your portfolio as long as you can afford to lose that money and you’re going to keep it for a seriously long period of time” in an interview with TIME.
While it shouldn’t make up the majority of your portfolio, allocating 5% to digital real estate assets can be a great way to optimize your returns as an investor.
Tremendous Income Potential
Digital real estate can provide tremendous returns for investors.
Similar to other types of investing, digital real estate offers compounding returns that can multiply in a hurry. Websites can sell for tens of millions of dollars, making it a great investment opportunity for many.
Digital real estate offers passive income that can help you to grow your wealth and live financially free.
Take a look at this listing below of a website that’s current for sale on EmpireFlippers. It’s bringing in a whopping $132,000 in monthly profit!
Potential for Self Employment
If you’re currently working as a full-time employee and are looking for a path to quit your job, investing in digital real estate can be the perfect option.
By building or buying a website or domain name, you can transition out of full-time employment with the income you make.
Let’s do some math to help better understand how your online business can become a full-time job.
If you start a website from scratch for under $200, you can gain traffic and grow revenue by utilizing various acquisition channels like SEO. By receiving over 10,000 page views per month, you’ll qualify for the Ezoic platform that pays much more than Google Adsense for display advertising. This can earn over $500 per month. Couple that with affiliate marketing and you can easily earn over $1,000 per month from your website. Considering the cost of your website was a couple of hundred dollars, this would be a great investment to many.
Digital real estate is by no means new, in fact, it’s been around for some time now.
While early investors have made a fortune investing in digital real estate, there are still plenty of opportunities.
While some might consider it speculative in nature, certain steps yield historically strong returns.
As this form of virtual property becomes more mainstream, your income and assets will become even more valuable.
Just like any other investment, there are certain strategies you can deploy to limit your risk and make more money. For example, it’s wise to have multiple different digital real estate investments rather than going “all in” one just one.
Low Start-up Costs
The cost to get started with digital real estate can be minimal, making it a viable option for people of all ages and income levels. You can purchase a domain name for less than $10 annually or build a website for less than $100 with hosting.
If you don’t have a desire to build a website, you could start a YouTube channel or another social media account for free.
Other types of digital real estate can be more costly, however. For example, Beeple sold an NFT for $69 million.
When you compare this to the cost of physical real estate, where you’d need (at minimum) 3.5% down payment on an asset that costs tens, or hundreds, of thousands of dollars – you can see how affordable it can be to buy digital real estate.
Digital real estate compounds quickly.
Because you have access to virtually anyone using the internet, or billions of people, you can grow your assets tremendously. When building an audience, it can take a few months to start seeing growth, but it can gain speed rapidly.
Drawbacks of Digital Real Estate Investing
While there are many benefits of investing in digital real estate there are also a couple of drawbacks. I’ll explore the most common below.
Digital real estate can be volatile under certain conditions. Because many websites rely on certain acquisition channels, if something were to happen to these channels, your income could suffer.
The most common reason websites suffer is from algorithm changes by Google or social media sites. If an algorithm change is deployed, you’ll be tasked with understanding what reasons impacted your rankings or impressions. This can be quite difficult and frustrating for many website owners.
The takeaway here is to use several acquisition channels in case that one suddenly drops.
For cryptocurrency, it’s possible to see price swings of greater than 10% daily.
Unless you are going to invest in digital real estate passively through a third party, you’ll need certain skills (more on this below!) to grow your income and assets. This can leave some investors on the sidelines.
There are many resources you can use to learn about digital real estate. For example, if you want to start a blog to make money, check out the video below!
How Much Money Do I Need to Invest in Digital Real Estate
Digital real estate is unlike many other investments in that you can get started for essentially free. Depending on the type of digital real estate you invest in, it could cost you $9 for a domain name, or completely free by creating digital products.
If you plan to build your digital real estate portfolio, this can take some serious work.
How to Buy & Invest in Digital Real Estate
There are many different options when it comes to investing in and buying digital real estate. This gives investors the opportunity to put their money to work through projects they believe in or are passionate about.
Build a Website
Building a website can be one of the least expensive digital real estate investments. But this does come with a cost, your time. You’ll need to spend the time to build and grow the website.
The cost to start a blog or website is extremely low, making it a low risk way to earn money and build wealth outside of the stock market or another asset class.
Before deciding to build a website, you’ll want to ask yourself a few questions.
- What am I passionate about?
- How will my website make money?
- How long until I expect to turn a profit?
- How crowded is my niche?
- Do I have the time to properly grow a website?
To get started building a website, you’ll need 3 things: a domain name, website hosting, and a content interface. You can purchase a domain name through several websites but my favorite is Namecheap because of its affordability.
You’ll then need to purchase web hosting. Again, you’ll have many options but my favorite is SiteGround because of their superior customer service. Your web hosting will store any files online for users to access. The last step is installing a content management system on your website. Depending on the system you use, this will often be free. WordPress is the most common CMS used by millions worldwide. You can learn more about WordPress here.
Once you’ve completed these steps, you’ll need to create content for your site and begin promoting it to get found online. There are many different platforms and channels you can use to grow your piece of digital real estate like social media marketing, SEO, or email marketing.
It can take some time grow your website, but it can be extremely profitable.
I started my website in 2019 and it has grown tremendously over the past couple of years. In 2021, I generated over $60,000 of income from my portfolio of sites. This can help you visualize how impactful digital real estate investing can be.
Purchase an Existing Website
If you’re looking for a quicker method to invest in digital real estate, purchasing an income-producing website can be your best bet. This form of digital real estate investing might be the most hands-off for some. However, if you’re looking to grow the site, you’ll need to dedicate resources to do so.
Before deciding to purchase a website, you’ll want to ask yourself a few questions.
- How can I grow the website and revenues?
- Is the website valued at a reasonable price?
- Am I passionate about the website or topic?
- Does the website have sound fundamentals?
There are several places to find websites to buy. Some of the most common include Flippa, Empire Flippers, and Motion Invest.
These websites have a marketplace to browse listings of websites and online businesses for sale. You can see many metrics regarding the business like monthly revenues, website traffic, and more. You’ll need to do your due diligence before making an offer on any website. This process is known as website flipping.
Purchase a Domain Name
Purchasing a domain name can be a simple way to invest in digital real estate but it can be one of the most volatile. By purchasing the right domain name, you could make a fortune. But most domain names will likely never make any money. Domain flipping can be a great option to make money online.
When considering purchasing a domain name you’ll want to find one that has a few of these qualities:
- Shorter in length
- Premium extension (.com)
- Easily brand-able
My favorite place to purchase a domain name is Namecheap because of its affordability. You can browse domain names on Namecheap here!
While cryptocurrency is slightly different than other forms of digital real estate, it can still be used as an investment for some individuals.
Purchasing cryptocurrency is quite simple. By downloading the Coinbase app you can buy and sell a variety of cryptocurrencies.
There are many different cryptocurrencies you can invest in so you’ll want to do your research before you start investing.
Start an Ecommerce Store
Starting a digital real estate business like an ecommerce store is a great way to make money online in both the physical world and virtual world.
This online business can be a great way to make extra money each month and they can be extremely profitable.
Starting an online store will require more work than other forms of digital real estate investing because you’ll be dealing with physical products.
Build an App
Mobile applications are another form of virtual real estate that can be massively rewarding. These digital assets can be sold through various app stores found online.
You can choose to have users pay upfront for your app or you can sell ad space through your app.
Building an app is a great choice to build your income online.
Purchase Virtual Land in the Metaverse
Owning virtual land in the metaverse is another method to start investing in digital assets.
There are several virtual realty platforms like Decentraland where you can purchase a plot of land to start digital real estate investing. It’s powered by the Ethereum blockchain meaning that each piece of online real estate is unique and cannot be replicated.
Online real estate or virtual land works in the same fashion as real estate in the real world. You can buy and sell your property whenever you choose and for whatever amount you want.
Purchase an NTF
Another option to buy digital real estate is by purchasing an NFT through a platform like OpenSea.io.
To buy an NFT, there are a few steps you’ll need to take.
- First, you’ll need to purchase Ethereum, a popular cryptocurrency that can be purchased through an exchange like Coinbase or Gemini
- Next, you’ll need to transfer your Ethereum to a wallet that holds your cryptocurrency.
- Finally, you’ll need to connect your crypto wallet to a marketplace like OpenSea.io to purchase an NFT.
Need help? Check out the video below!
How Does Digital Real Estate Grow and Make Money?
Depending on your asset, digital real estate can make money through a variety of methods. I’ll explore some of the most common below.
If you own a website, one of the easiest and quickest ways to make money is through display advertising. Display advertising consists of all of the advertisements displayed on a website. These can be various sizes and formats and are usually placed through an ad publisher like Google Adsense, Ezoic, Mediavine, or others.
The amount of money you can make through display advertising varies widely based on numerous factors. Pageviews, impressions, and RPMs will help you to determine your income potential with display ads.
The second most common and easiest monetization method for digital real estate is affiliate marketing. Affiliate marketing describes the relationship between website owners and companies. Website owners will partner with companies that offer a small commission whenever facilitating a transaction through their content in the form of an affiliate link.
Affiliate marketing can be an excellent way to increase revenues for an online business because there is no cost to the website owner to get started and the income potential is almost limitless.
There are entire websites built around the revenue model of affiliate marketing. A majority of these sites, known to many as affiliate websites, make money by comparing and reviewing products.
Sponsored Content and Ads
Offering sponsored content on your site is another way to make money with digital real estate. At its core, it is a combination of display advertising and affiliate marketing.
For example, you might see a banner ad for a company on a website’s homepage. This ad was paid for directly by the company to the website owner. The terms of the deal are private in nature therefore you have full control of the price and income you could make.
Another form of sponsored content is a sponsored post. Many websites will utilize this in the form of a product review. Similar to banner ads, you can set prices and negotiate offers on your own.
Selling Digital Products to Make Money
Another popular income stream many online businesses utilize is selling digital products. These products are created by the website owners and sold through the website to directly make money.
The downside of this method of monetization is that you’ll need to dedicate time and resources to building your product.
There are many types of digital products you can offer including:
It’s common to offer a variety of products ranging in price and detail to satisfy the varying wants and needs of potential customers.
Digital products are great digital assets that can be a great source of passive income to build your portfolio.
While this is not a passive income stream like the other methods listed, selling services can be a great way to make money as a freelancer. Depending on the type of website you operate, this could include various services.
For example, if you own a fitness blog or website, you might consider selling custom workout routines or fitness programs to help people reach their fitness goals.
For a financial website, you could offer personal finance coaching.
These services can be a great way to supplement your income.
Start a Membership Community
Some websites will offer exclusive memberships for paying individuals to join. These groups can include a variety of offerings like free consulting, advice, and more.
The amount of money you can make from a membership community ranges, but it’s a great way to generate passive income each month with reoccurring revenue – even if it’s just $10 a month.
Have a Pay Wall for Content
You’ve likely run into a website that requires you to pay to access the content. You’ll need to have strong content in order to justify the price tag you put on it but it can be an easy way to generate some income if you have the right following.
Some websites might use a mix of free and premium content to satisfy more users. If the content you create is good enough, many free content viewers may convert to your premium content.
While this isn’t my favorite method of making money from your digital assets, it can certainly be done.
Because digital real estate is an asset, it can increase in value over time just for existing. This is mainly for the digital asset of a domain name. As names are registered and names become rarer, your domain might become worth more.
As your digital real estate monthly income grows, it’s value will as well.
For example, let’s consider a blog that makes $5,000 each month. Currently, it would sell for around 30x to 40x it’s monthly earnings. This means you could sell it for anywhere between $150,000 to $200,000.
If you can increase the earnings from $5,000 to $6,000 each month, your website will increase the overall value from $30,000 to $40,000.
Similar to value increase, gaining equity in your online real estate is a great way to build wealth.
If you are able to take out a loan for your digital property, each month you make a payment you will gain equity in your land or digital real estate investment.
What You Need to Grow Digital Real Estate
While there are some passive ways to invest in digital real estate, most people will need to be knowledgeable or skilled at building and growing websites to succeed.
Below are some of the skills you’ll need to become a successful digital real estate investor.
Websites and blogs are run on digital marketing efforts. Because your websites rely on users visiting them to make money, you need to know how to acquire them. By utilizing various digital marketing channels, you can grow your user base and revenues.
For example, social media marketing, search engine optimization, and paid advertising are great sources of traffic.
Lite Technical Skills
Depending on your method of digital real estate investing, you may need some lite technical skills to build a website or make improvements. If you plan on passively investing in digital real estate, you may not need these skills at all.
Related: Ways to Make Money Programming
Time is one of the most critical resources for websites to grow, especially if your website relies on search engine traffic to make money.
You cannot expect your digital real estate portfolio to triple in size overnight (although it is possible for some!). Your digital real estate will grow exponentially over time. It might seem slow at first, but as it gains steam, your income can become considerable.
But don’t get worried if you don’t have a significant amount of time to invest. You can also consider outsourcing much of the work when it comes to digital real estate.
For example, many bloggers might outsource some of their content to freelance writers so they don’t spend all day working on their blog.
Is Digital Real Estate Legit?
Digital real estate is 100% legit if you know what you’re doing. While some forms of investing are more risky than others, there are plenty of different ways to start making money in the digital world.
Final Thoughts On Digital Real Estate
Digital real estate can be an excellent avenue for both investors and entrepreneurs looking to grow their income streams and make more money. With many options available, there are several ways to get started investing in digital real estate.
Between building a website, purchasing a domain name, or creating digital products, digital real estate allows anyone the opportunity to make money online.
We’re still in the very beginning of the digital world. This emerging digital market of internet property can be extremely lucrative.
So what are you waiting for? Start digital real estate investing today!
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