Who can forget the dot com boom and bust at the turn of the millennium. Big companies were paying ridiculous amounts of money for speculative virtual businesses. Like the gold rush of yesteryear, investors jumped on the bandwagon – some made a killing while most lost their shirts.
Since the bubble burst, however, the market has developed at a more measured pace. That said, I believe web sites are still undervalued as assets. Market trends show that sites continue to increase in value across the board, and the trend remains upward – the market’s nowhere near topping out yet. This environment presents ample opportunity for successful speculation and website flipping. Just like the physical property market, the online property market is rightly being regarded by many as a great place to make not just a quick profit, but potentially a living.
Strategies for flipping websites are similar to that of real estate. You can buy a website, sit on it and have it increase in value over time or you can add value to the site and sell it quickly and realize a capital gain.
The steps involved in a successful flip include:
1. Find a virtual property you want to buy.
2. Make an offer to the website owner and complete the website sale.
3. Improve the monetization of the website.
4. Re-sell the website for a profit.
Now, I can’t tell you how to add value to your web site – obviously the value you add will depend on the site, your skills and capabilities, the market, and so on.
Website flipping as a means of supplementing our income can be a profitable exercise, however, it’s important that you keep track of your time and expenses. The only way you’ll know if you’ve made a profit or loss is if you track expenses in real terms. If you’ve made $1000 on a website but spent 100 hours upgrading it, you might be better off doing something else.
It’s no good to just think, “Well, I built this site on my own time and sold it for $500, so I’ve made a profit of around $500.” You haven’t. You might have $500 in your pocket, but the only way to ensure that site flipping is more lucrative than anything else you could be doing with your time is to keep detailed records of your costs on each site. Those records won’t make an unprofitable site profitable, but they may reveal areas in which you could improve your profitability on current and future projects.
Flipp.com is the #1 marketplace for buying and selling websites. To learn more about flipping websites check out the Flippa blog.
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This is a solid way to make a living, and will continue to be for anyone who is more up on monetizing websites than the average webmaster. I agree with the comments about time. People too easily forget the value of time. When someone says they made $1000 profit, I have to know how much time they invested before I know whether to admire them or not. 100 hours flipping burgers and I could make $1000 pure profit too.