Real estate as an investment is one of the most stable and soundest forms of investments anyone can make. There will always be a demand for properties, especially residential properties. As more and more people have grown accustomed to the new normal where most folks enjoy remote work, there has been a significant boost in demand for residential real estate.
However, because of the spike in online activity brought about by COVID-19, the demand for a different form of real estate has also significantly increased. We’re talking about digital real estate.
What is digital real estate?
When we talk about real estate, we immediately think of houses, buildings, mortgage agents, realtors, and other similar things. Similar to actual real estate, digital real estate is all about buying properties online. This means websites, domains, and other similar platforms.
Pretty much all digital properties are considered digital real estate. And whenever you create an account on any digital platform — like blogs, social media, and eCommerce — and use it for personal or business reasons, you utilize someone else’s digital real estate as the owner makes money off it.
Is it a sound investment?
Investing in digital real estate is not that different from physical real estate. A property’s value will depend on its location.
Let’s say you own a piece of physical property, regardless if it’s a house or a commercial building. Its value will be determined by its location and accessibility. Several other indicators of a property’s value, such as amenities, topography, and security, among others. But for commercial properties, the amount of traffic is one of the main things buyers are looking for.
Similarly, a sound digital real estate investment should involve high traffic to be truly profitable. However, unlike physical real estate properties, virtual properties are far easier to acquire and friendlier to investors, especially since we’re all moving toward a more virtual society. Many experienced investors are now moving into digital properties for the stability it provides.
How can one invest in digital real estate?
Digital real estate investing is considered the future of investing. And while some technical know-how gives one an upper hand in the game, it’s not that complicated to get started with internet properties. Getting involved in digital real estate primarily means either or both of the following:
Buying digital real estate
For those who have enough money and don’t want to put too much work into creating a site, the simplest solution is to buy existing websites. It won’t come cheap, of course, but since the website is already up and running, one can assume that it is already making a profit, no matter how small. The return on investment will be a little faster with this one.
Building digital real estate
The cheaper alternative to digital investments is to build a website from scratch. This doesn’t involve a large sum of money. However, it will take up a lot of your time to create and develop it to become a sellable property. All you need to do here is to buy a domain name and website hosting. You can then install WordPress on your hosting so you can start making content.
How does one make money off it?
The question now is how does one monetize digital real estate properties?
If your website or blog is doing well enough and has good coverage, advertisers will seek you for placement on your site. They often reach out to owners to sponsor blogs and other types of content that highlight their products and services.
Simply put, affiliate marketing is just making a profit off of your recommendations. If a business or company partners with you and people buy their products or acquire their services based on your recommendations on your site, you get a certain percentage off the sale.
You can sell some of the vacant space on your website as ad space to businesses and companies. For each click on their ad on your site, you get paid a certain amount.
Lastly, monetize your digital real estate by selling your own products and services. It can be an ebook, software, an online course, or actual physical merchandise that they can order from your site.
Like any other investment, you need to make sure you perform your due diligence before making the jump. And despite the stability that digital properties offer, do not put in more than you can afford to lose. It is still an investment which means certain risks are still involved. Learn as much as you can about investing in it so you can make a wise and well-informed decision.