How To Invest In Digital Real Estate

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how to invest into digital real estate

Do you have some spare money and are you looking for a way to invest your money profitably? You have probably already dealt with the topic of stocks or cryptocurrency. The problem with stocks and crypto is that these assets are very volatile and offer no guaranteed returns.

Have you ever dealt with the topic of digital real estate? Maybe this is a good opportunity for you to invest your money.

You’ve probably heard of websites, blogs or online stores that generate passive income, right? Then you should read this article more closely, as we will give you valuable tips on how to invest in digital assets correctly.

What is Digital Real Estate?

The term “Digital Real Estate” can be understood as owning a digital platform, such as a blog, website, eCommerce store, forum, Saas (Software as a Service) platform, Amazon FBA business, etc…

Especially when your digital real estate earns money and can show certain monthly traffic, this type of digital real estate is particularly valuable.

Owning a digital platform that allows you to monetize monthly traffic can be particularly lucrative. Many digital platforms earn their money passively, such as through advertisements, banner ads, or subscription fees.

You can basically compare digital real estate with physical real estate such as a house or a rented apartment. Once you own this digital real estate, you should try to optimize the platform in such a way that it yields as much profit as possible at low cost.

These are the types of digital real estate you can invest in

As mentioned above, there are different types of digital real estate. I would now like to describe the most important and lucrative ones in more detail.

Online Blog: A blog is a great way to generate passive income. If you own a blog, chances are you’ve focused on a specific topic or niche.

An online blog lives from its content. If you own a blog, you should regularly publish new, current and interesting content.

If your blog is of high quality and attracts enough monthly readers, you can monetize your blog in a variety of ways. For example, you have the opportunity to sell ad banners, monetize your blog through Google AdSense, or join premium ad networks and show premium ads on your blog. Premium ad networks are particularly lucrative, but require a minimum number of monthly visitors (between 50,000 to 100,000 unique visitors).

Website: Of course, a website can also be viewed as digital real estate. For example, you may have a company website that attracts a large number of visitors each month and thus sells products or services.

Websites are usually companies or people who provide services or sell services. A website of this kind is less suitable as an investment.

eCommerce Store: An eCommerce store can be a good investment. If you take over a running eCommerce store, you should make sure that all the information on monthly visitors and monthly sales are correct.

However, an eCommerce store usually requires a lot of work, since the backend of the store has to be managed, orders have to be fulfilled, or products and content have to be updated.

When you want to invest in a dropshipping store, most of the work is usually limited to marketing. But if you want to buy a conventional eCommerce store, of course, you also have to take care of the purchase of the goods, the shipping, and the support. Therefore, if you make an investment in an eCommerce store, we recommend that you invest in an established dropshipping store for reasons of time.

Forum: There are forums for every topic and for every niche. A forum usually requires little work and is self-driven. If you want to buy a forum, you should definitely take a close look at the visitor numbers.

There is no heavier business than user-driven websites. Forum competition is extremely high on the internet and new forums are being published every day. You also have great competition with big content platforms such as Reddit or Quora.

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Of course, if you’ve found a forum that’s for sale and that has a lot of monthly users, you can monetize the forum with ads or banner ads.

Of course, forums can also be monetized with premium ad networks such as Mediavine, Media.net, or ezoic.

SaaS platform: Software as a service platforms is usually particularly lucrative digital real estate since these platforms provide software that has been created once for monthly subscription fees.

But you should note that the advertising costs can be very high if the software is rather unknown. So factor in the advertising costs, or ask the owner about the monthly expenses for paid advertising.

You should also keep in mind that the software needs regular updates. It can also happen that unexpected bugs appear. Does this service require permanent developers or can you commission freelance developers to further develop the platform or the product.

Before you invest in a SaaS software platform, you should definitely look at the revenue figures as well as the monthly expenses.

Also, look at the competition for this software platform. If the competition is too strong or offers a much better product, you have to have the further development costs calculated exactly.

Amazon FBA: Of course you can also buy established Amazon stores that have many different products and good ratings. Since Amazon is the world’s largest ecommerce platform, investing in a well-run Amazon FBA store is a good idea.

But you have to keep in mind that running an Amazon FBA store is a lot of work if you want to run it yourself. You have to buy the goods, send the goods to the Amazon fulfillment center, create the product descriptions, etc…

Also keep in mind that there is a lot of competition on Amazon. For every product on Amazon.com, you will likely find at least 10 competitors trying to sell the same product.

So if you can’t always offer the best price or have the best product description, you can quickly be pushed out of the market.

Maybe it makes sense to look at a well-running independent ecommerce store and invest there…

There are various investment opportunities for digital assets. If you want to invest in a digital asset, you should first answer the following questions:

  • How much monthly income do you expect?
  • Are you ready to further expand the acquired platform?
  • Can you manage the purchased platform yourself or do you need help?
  • Is the new website in an evergreen market or is there a chance that this niche is just a short hype?

How much money you should invest in digital real estate?

This is a very good question, but also a difficult one at the same time! Of course, how much money you should invest in digital real estate always depends on your personal situation, how much monthly revenue you expect and how much time you want or can invest in the project.

You can of course buy websites or blogs for as little as $1000. However, these low-priced websites or blogs usually have little content, little monthly organic traffic, and little to no monthly revenue.

Therefore, these small investments or purchases only make sense if you have a lot of time/money to continue building these websites.

But if you have a little more money available that you want or can invest, then things look different. With prices starting at $10,000, it usually gets interesting and the websites or platforms offered can also show higher monthly visitor numbers and monthly sales.

empire flippers listings
Here you can see a sample listing of websites on Empire Flippers. Empire Flippers has listed mostly premium websites that are on average more expensive. But Empire Flippers verifies every listing, so you can be sure the numbers listed are correct. As you can see in these examples, the average ROI is around 36 months.

Of course, these platforms can be further expanded in order to increase the monthly number of visitors and thus also the monthly turnover. For example, if you want to buy a blog, you should add more content to increase organic traffic and thus increase advertising revenue.

When it comes to digital real estate, there are usually no upper price limits. You can find websites starting at $100, but also websites, blogs, or eCommerce stores that cost several million dollars.

It’s all a numbers game! The higher the monthly organic visitor numbers, the higher the monthly sales, and the higher the purchase price of your new digital real estate.

You can compare it to buying a house. A wooden shack in the middle of the forest, where someone comes by, of course, costs less than a detached house in Malibu.

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But you definitely have the opportunity to invest even with no budget and then put your own sweat and blood into further development. If you do a good job, that little blog you bought for $1,000 will become a “Beachhouse in Malibu.”

flippa digital asset listings
On the Flippa platform you will also find “cheaper” websites and other digital assets for sale. Anyone can sell their websites, blogs or e-commerce shops on the Flippa platform, so you should always verify the data you provide. Look for a platform that is at least one year old and has a steady traffic growth curve!

What are the returns of digital real estate you can expect?

Here, too, it always depends on the purchase price and the expected monthly income. It also depends on how you continue to improve your new website in order to further increase revenue.

For example, if you buy a website, blog, or forum for $100,000 and the monthly income is around $4000, you have to wait 25 months to get your initial investment back.

Anything you generate after the 25 months is pure profit. Of course, you must not forget the costs that your website produces monthly, such as hosting, product purchases, advertising, etc…

With a website or an ecommerce store, you always have the opportunity to increase your income. Improve your landing pages, improve your advertisement, do SEO, produce more content, and so on…

The great thing about digital real estate is that you can achieve a very fast ROI (return on investment). If you know what you’re doing, or have enough money to outsource important tasks, you can quickly increase your income enormously.

A website or eCommerce store can be very successful and provide you with additional income. But you should always keep an eye on the costs. To keep a website, blog, eCommerce store, etc. running, there are of course always regular costs. For example, these costs could be: hosting, subscriptions, services, content creation, necessary employees, fees for payment service providers, and much more. Before you buy, inquire about the exact monthly or annual fixed costs. These costs can quickly and dramatically reduce the return on your new investment.

How to improve the value of your newly bought digital real estate?

Of course, this always depends on what you bought. For example, if you have bought a SaaS platform that offers software, you should of course try to optimize this software so that it offers better functions. You should also optimize your marketing or invest in content marketing.

If you bought a blog it’s obvious. A blog lives from good content that offers users high added value. Therefore, with a blog, you should invest in new content or hire one or more freelance writers who will write and publish good content on a regular basis. For this I recommend, for example, the freelance content platform “ProBlogger” or “HireWriters“.

After all, a blog lives from its monthly organic users. The more users you have, the higher your advertising revenue.

Generally speaking, every website lives from new content, innovations, and updates. If you keep the new website up to date and provide it with fresh content or updates, you will also be able to increase the value of your new digital real estate.

Which platforms are the best for buying digital real estate?

There are many different platforms on which you can buy digital real estate. For example, you can buy your new investment on Empire Flippas, Flippa, FE International, Digital Acquisitions, and many more. You can even find offers for websites on eBay… but I would like to advise you not to do this here since the quality of the websites or blogs offered is rather questionable.

My personal favorites are Empire Flippers and Flippa.com. There you will find many different websites, domain names, and even apps.

Empire Flippers is on the more expensive side. But at Empire Flippers you will find very high-quality websites, blogs, and SaaS service websites. Empire Flippers also offers you the advantage that every listed digital asset is checked before it is listed. The chances of making a bad deal there are very slim.

On Flippa.com you will find many different offers. You can find company websites, service websites, domain names, apps, SaaS service websites, and much more. At Flipper, you can also take part in auctions and maybe even get a bargain.

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But you can also find websites at fixed prices. The exact sales figures and visitor numbers are also published there, as well as other important details such as the age of the website or the ranking.

However, you should always make sure that the data given is correct. You can use the free tool from SimilarWeb to verify the monthly visitor numbers, for example. You should also check the link profile for spam. Many sellers also like to cheat when it comes to monthly prizes. So let us show you detailed evidence of the sales before you buy.

If you find a website and have it analyzed by SimilarWeb and see a sudden drop in traffic, it may be that the website has received a manual penalty from Google. Then, of course, it’s time to hands-off and switch to the next offer.

The great thing about Flippa.com is that you can (and should) negotiate the price with the seller. Depending on the purchase price, you can usually save a few thousand dollars.

Take a look at the various sales platforms for digital assets. If you don’t find what you are looking for on one platform, the other platform may sell exactly what you are looking for.
Our recommendations for platforms where you can find the best digital assets are:

Empire Flippas

Flippa

FE International

Digital Acquisitions

How secure is buying a website?

Once you’ve found your dream investment, don’t rush into anything! Most platforms offer an escrow service that makes it easier and safer for both sides to sell digital assets.

You should NEVER transfer money for the new website in advance via PayPal or wire transfer. There have been many negative examples where buyers have transferred the money and then never heard from the seller again. Therefore, always use an escrow service to secure your transactions.

Even if such an escrow service usually costs several hundred dollars, it is worth it. Because you are always safe and the money is only paid to the seller when you are fully satisfied with the receipt of the new website.

However, larger websites such as Empire Flippers or Flippa, which specialize in buying and selling digital assets, will give you precise instructions on how to go about the buying process.

Also, don’t forget to get all other assets given to you. Such as admin access to Google Analytics, passwords for the various social media accounts, or important data such as logos or templates.

If you are planning to buy a digital asset, it is important that you protect yourself. You can never trust a seller 100%. Unfortunately, it has often happened that money has been paid but the digital asset has never been transferred.
Therefore, always use an escrow service when paying funds. Of course, escrow services also charge fees for their services, but these are worth it.

I can recommend the Escrow.com service. There, the transfer of digital assets and funds is managed professionally.

How long does it take to make your return on investment?

It can be relatively quick until you have your initial capital back. It all depends on how much you paid for your new website and what the monthly income is.

With the various techniques, as mentioned above, you can increase the monthly income and thus extremely shorten the ROI.

Once you’ve increased revenue and reduced monthly costs, it can also be profitable to resell the acquired digital real estate at a higher price.

But that is a calculation that everyone has to do for themselves!

Conclusion

Investing in digital real estate can be very lucrative if you find the right platform. There are many different types of digital assets that you can invest in and build “passive” income.

You have the opportunity to invest in ecommerce, blogs, Amazon FBA shops, SaaS services, or forums. Each of these platforms has its individual advantages and disadvantages.

If you intend to invest in such a platform, you should always obtain precise details and information beforehand. This way you know the numbers and how high your ROI is.

Of course, you can also continue to build up and expand digital assets once you have bought them. In this way you can increase the value of your new digital real estate enormously and thus achieve higher monthly profits, or then resell the digital asset at a higher price.

Co-Founder at Datacrypt Ltd
Tim is the co-founder of Datacrypt.io and is an expert in web design, SEO, eCommerce, and content marketing. Tim loves to write informative content and give you useful information in our blog about various topics.
Tim
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