In today’s increasingly digital world, it only makes sense that certain investments have moved online. Digital real estate, for one, is an online asset class that has become more popular in recent years. As an investor, you may be wondering, “what is digital real estate?”
Digital real estate encompasses several online assets, such as websites, domain names, and more. By learning more about these digital components, investors can more easily identify investment opportunities when looking at virtual property. Keep reading to learn more about the benefits of digital real estate and learn how to invest today.
So What is Digital Real Estate?
Digital real estate is essentially everything you see online, right down to this website. It is more commonly referred to as virtual property and contains anything inside the digital world. Essentially, everything from the largest social media websites to small food blogs are considered digital real estate. The owners of these websites act as digital landlords and gain passive income through ad revenue generated on their online platforms.
While physical real estate is sometimes considered an expensive or specialized investment type, digital real estate is much more known for being widely accessible. Investing in digital real estate is a great way to intelligently invest as more and more of daily life moves online. A few examples of digital real estate investing include buying a domain name or social media handle.
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Benefits of Owning Digital Real Estate
Investments are a great way to generate passive income and boost financial security over time, and digital real estate is no different. However, not all investments are created equally, and the right assets can make all the difference in your portfolio. Here are a few benefits of owning digital real estate:
Accessible: With online assets, you don’t need much experience to get started. Instead, the bulk of your preparations will involve researching the asset or platform you want to invest in.
Affordable: Investing in websites or creating your own digital space is often highly affordable, especially when compared to the costs of entry associated with other investment types.
Profitable: As the digital space continues to expand, online investments are becoming highly lucrative.
Ways to Invest in Digital Real Estate
Now that you have a better understanding of digital real estate, it is important to learn how to get started. There are two main ways to invest in digital real estate: buying or building digital property. This may sound similar to how physical real estate operates, however virtual property depends on different skill sets. Keep reading to learn about the advantages and disadvantages of each opportunity.
Build Digital Real Estate
There are numerous ways to build digital real estate, but the key is to keep your eyes on the prize: passive income. Unfortunately, not all digital assets generate income. The goal should be to create an asset that can generate income through advertising, buying and selling, or affiliate marketing.
You can build digital real estate by creating a website with a unique domain name and hosting your own website. This can be used to create content, host a marketplace, and more. As you can probably guess, this will take time and effort to launch successfully. There are a few pros and cons associated with this strategy to be aware of:
Self Employment: In a way, building your own digital real estate can become a form of self employment. Think about your favorite blog or website, are there ads and affiliate codes? Chances are, the person running it generates income from building the site. In successful cases, this can become your main source of employment.
Low Initial Investment: Most unused domain names are relatively low-cost to purchase, some can even be as low as $10 a year. Research a few different hosting sites, such as Google or WordPress, and find the right one for your needs. This takes away the need for outside funding as you build up your first investment.
Scalability: There is significant growth potential when building digital real estate. Let’s say your first stream of revenue comes from ads; in the future, this could expand into affiliate marketing and brand placements.
Requires Regular Maintenance: Exposure and visibility are crucial when attempting to profit from digital real estate. It will take time to build and market a successful website, and the amount of effort required can be a hurdle for many investors
Increased Accountability: With increased access, comes increased accountability. Investors need to stay up to date on digital trends if they want to remain relevant over time. While numerous websites, podcasts, and blogs are dedicated to successful digital real estate, it will take time to identify trustworthy sources.
Purchase Digital Real Estate
Purchasing digital real estate can be a great way to experience the various benefits offered by this asset type. Note that not all websites produce income, and you will need to carefully evaluate performance metrics to ensure you are making a sound investment. Look at the web traffic, SEO compatibility, backlinks, and more to evaluate the asset.
There are several online marketplaces, such as Flippa and Empire Builders, where you can buy and sell digital real estate. The purpose of these marketplaces is to increase transparency and mitigate risk. Most platforms like these will tell you how much income each asset generates monthly. Here are some of the advantages and disadvantages that come with buying digital real estate:
Massive Potential Profit: The income potential of owning digital assets cannot be understated. If you purchase a domain that has existing ad partnerships and marketing strategies, you can realize these benefits almost immediately.
Create a Diverse Portfolio: Digital assets offer the benefit of diversification by allowing you to choose which industries you want to invest in. You can select a number of different assets and expand your portfolio over time to reach across industries.
Huge Scalability: There is always room to expand your audience online, especially once you tap into your target audience. Always review your performance metrics and search for opportunities to scale your business.
Lack of Predictability: For all of its benefits, the internet remains hard to predict. The web is constantly changing. As a digital real estate owner you will need to shift your focus over time to accommodate this.
Slight Learning Curve: Learning a new web platform can be a challenge, especially in the beginning. If you are not tech savvy, search for online courses and resources that can help you navigate digital real estate before you actually get started.
So, what is digital real estate? This investment type is an opportunity to earn passive income entirely online. Digital real estate has become an increasingly popular entry point for investors who are just starting out. The opportunity to manage online assets makes this investment accessible and cost-effective for many. As you learn more about digital real estate, you may find running your own website to be highly lucrative over time.
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