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Domain Leasing Crash Course

Posted on 3.31.2013

Domain names are very, very valuable assets – at least they can be. Some domains, of course, are better than others are. You should know the qualities of those that are most valuable (e.g. short, memorable, interesting, etc.).

If you’re fortunate enough to own one of those valuable domains and you’re looking for some revenue to fund other projects, it’s not necessary to sell it outright – there are other options. Domain leasing, for example, keeps that asset in your control and provides an opportunity to make some potentially enormous profits when approached strategically.

What to Look for in a Domain Lease…

To evaluate the viability of a domain for leasing, look at lease length, existing website traffic and previous use. This information is important for both the leaser and the lessee.  

So, what are the key evaluation criteria for a domain name lease?

The length of the lease is one of the most important criteria. Leasing a domain for a short period, may benefit the domain name owner, but not the one leasing the domain name. Leasing a domain name for longer (e.g. three, five or 10 years) locks up the domain for a sufficient amount of time. As you might imagine, longer leases still benefit the domain owner in the form of sustained revenue. 

TIP: Use escrow services to protect both parties from potential legal snags

Existing traffic is another area that is worthy of analysis in relation to domain name leasing. While buying a domain name for brand identity is valuable (particularly in the case of single-word domains), domain names that receive some type-in or direct navigation traffic are valued in different ways.

TIP: Research the existing traffic, determine the volume of paid, social and organic traffic

The final criteria that can be used to evaluate the viability of a domain for leasing is how that asset has been used in the past. Even attractive domain names can have a sordid past so knowing what complaints, how many and how positive or negative they are could play a role in your company's decision to lease.

TIP: Check review sites, social networks and complaint boards to understand reputation

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