Real estate is among the most lucrative industries any entrepreneur can put their money in. As long as you do your due diligence on a potentially worthy investment, chances of you striking gold are high.
Now, with the all-encompassing digital advancement, the real estate industry has also significantly progressed to include non-tangible property, otherwise known as virtual or digital assets. The two main digital assets are websites and domain names. Other assets such as mailing lists, blogs, mobile apps, URLs, social media accounts, digital products such as streaming media, and so forth also make up digital properties.
And like traditional real estate, you can invest in these virtual assets and make a lot of passive income.
Why Should You Invest In Digital Real Estate?
Digital real estate is a package that comes with a whole lot of advantages. These include:
- Low Initial Investment
If you’re eying a digital real estate investment, you may only need about USD$10 to buy a domain name. And if you want to build a website, you may add about USD$5 per month to host the site. You still have the alternative of getting free hosting services, but this isn’t advisable because of the limited features. Once you have these two components in place, all that remains is updating the online sites with relevant content. You can do this yourself or hire an assistant at a budget-friendly fee.
However, in the traditional real estate sector, you can’t possibly bring USD$15 to the table as investing capital. Typically, investors part with thousands, if not millions of dollars for any initial real estate investment.
Therefore, the low initial investment for digital real estate makes it a venture worthy of consideration. After purchasing your domain name, you can lock and renew it year after year as you wait for an opportune time to flip it; that is, to sell it to an interested client at a higher price.
- Higher Return On Investment (ROI)
Conventional real estate agents earn an ROI of about 11% per year. This is a good profit. But with digital real estate, cases of investors attaining annual profit margins of 90% are not uncommon. It may even seem surreal to realize such profits in the property industry. Yet it’s an attainable outcome with the digital option.
To get there, first invest in digital property, such as a website. Then ensure you always maintain them to boost the quality. You may do this by:
- Creating high-quality content for your blogs
- Optimizing your site for search engines to rank your website highly and receive more traffic
- Taking advantage of affiliate marketing sites to advertise your material
- Including call-to-action words in your content
- Making your contact details notable on your website
- Adding images and videos to your site
- Regularly updating your web design to match the current trends
- Making your website mobile responsive
After a year or two of keeping up with these measures, your digital assets will be authoritative, thus will easily get noticed by potential customers. Consequently, you may start receiving offers to purchase them. When selling your domain name or website, make a deal with the client who brings the best offer—to get maximum ROI.
- Unlimited Clientele
For the digital real estate market, you have an extensive client base. This is because you have billions of global internet users as your potential clients. And that translates to high-profit potential.
However, this isn’t the case for traditional real estate which operates on a local scale. For any home you buy with the intention of renting it out, your potential clients are only those locals living within a limited radius of your property.
Again, you can have only one tenant per rental unit. Your customer can only be as many as the number of houses you have. But just one website can serve millions of customers across the globe. This shows quite a significant difference between the client bases for digital and conventional real estate.
- Easier Maintenance
Maintaining physical property involves spending money to buy materials such as paint, tiles, new roofing materials, among others. Not to mention the fee you may pay maintenance companies if you contract their services. The costs can significantly add up if your property is overly exposed to weather elements and the occupants aren’t caring enough.
On the contrary, adding content to your blog to refine it consumes very little of your resources. You may also need to invest in online tools, such as grammar checkers, Search Engine Optimization tools, image or video editors, among others. But you can easily get these free from the internet or at a small monthly fee.
- Lower Risk
Any business has associated risks. And the lower the liability, the more profitable your investment is likely to be. Digital real estate has lower risks than traditional real estate.
Suppose you buy and maintain a domain worth USD$20. But due to unfortunate circumstances, your investment fails to realize profit and closes down altogether. This doesn’t compare to one who puts half a million dollars in commercial real estate, and then the project goes down the drain with zero profit.
Despite the numerous benefits of digital real estate, there exists the element of lack of predictability. This is due to the dynamic nature of the internet. On this account, as a digital real estate investor owner, you constantly need to keep your skills at par with the latest trends in the internet world.
The kind of content that the public consumes also changes time after time. What’s termed as viral content today may not be popular a few weeks down the road. Thus, you have to continuously change your tactics to stay on top of the game. But for traditional real estate, trends usually last for decades. You never have to worry about house features getting outdated in the next few weeks.
The popularity of digital real estate continues to gain ground in lieu of traditional real estate. Some of its benefits include low initial investment, high ROI, few requirements, unlimited clientele, easy maintenance, and low associated risks.
For these reasons, digital real estate might be the future of real estate. But before diving fully in, you’d want to weigh the pros and cons of each and settle on the option that works for you. All in all, both are profitable options as long as you approach them professionally.