Renting/Leasing Domain Names

[Data Glasses]

Wow OK. So a lot of people not getting it and a lot of haters for some reason (which is strange as you would think there would be benefits for everyone). But on the bright-side it obviously seems to be a hot topic. Which will hopefully help market exposure.

Maybe I could simplify it a bit.

I have wanted to start up a few business ventures where the domain name would make a big difference. But I could not afford the prices the domain names were asking.

If I could rent that domain then I could get on with progressing my business venture, set up a site and get marketing.

If the owner of the domain name later down the track decides they want more rent, so be it. BUT bear in mind you can always have contracts similar to housing rental contract that dictate certain reasonable allowance on rent increase etc.

I would be more that happy to enter into an agreement where I can rent a $50,000 domain name for an agreed lower amount such as $200 p/m (please don't go to town on those figures its just an example).

The difference is the dnjournal article demonstrates how the owner of the names can utilize their assets, most here simply do not believe it works in a 3rd party situation

 

[Chris.C]

I would be more that happy to enter into an agreement where I can rent a $50,000 domain name for an agreed lower amount such as $200 p/m (please don't go to town on those figures its just an example).

What are you in the business of? I might have some domains your can lease for very cheap rates...

FAR cheaper than $200/month.

 

[snoopy]

Wow OK. So a lot of people not getting it and a lot of haters for some reason (which is strange as you would think there would be benefits for everyone).

It is because people have tried it and know what you are saying isn't right.

 

[xwdomains]

Wow OK. So a lot of people not getting it and a lot of haters for some reason (which is strange as you would think there would be benefits for everyone). But on the bright-side it obviously seems to be a hot topic. Which will hopefully help market exposure.

Maybe I could simplify it a bit.

I have wanted to start up a few business ventures where the domain name would make a big difference. But I could not afford the prices the domain names were asking.

If I could rent that domain then I could get on with progressing my business venture, set up a site and get marketing.

If the owner of the domain name later down the track decides they want more rent, so be it. BUT bear in mind you can always have contracts similar to housing rental contract that dictate certain reasonable allowance on rent increase etc.

I would be more that happy to enter into an agreement where I can rent a $50,000 domain name for an agreed lower amount such as $200 p/m (please don't go to town on those figures its just an example).

I have tried the concept and offered low as $5.00 a month for semi premium

names if the names not worth xx,xxx most users would rather buy the domain

maybe selling on an options contract could work.
I found users generally buy the name rather then rent even if it's
a cheap lease for domains.

There is plenty of buyers that will pay for a website for simple themes such as woo themes and 1 page business card type pages. for around $29.95 a month might not sound like much but your getting residual income
for domains that may not be earning anything for installing a ready made theme and adding a bit of info.

 

[eBranding.com.au]

Wow OK. So a lot of people not getting it and a lot of haters for some reason (which is strange as you would think there would be benefits for everyone). But on the bright-side it obviously seems to be a hot topic. Which will hopefully help market exposure.

I think people are trying to convey that it's a particularly tricky business model, which others (with significantly higher budgets) have failed to make work.

I haven't been successful in leasing a domain, though I've only mentioned it as an option in two negotiations where it seemed appropriate and got no bite.

However I've heard of almost no leasing arrangements, which to me says it's not yet viable (and I know people have tried to make it happen). Can you name a dozen leasing arrangements?

Can it work, sure, Rick Schwartz has managed it (though he's also taken equity in most of the deals). You want to know what the difference is? He has an incredible set of domain assets which sell in the six and seven figures (when he sells that is, he's only sold about 18 domains in like 20 years).

Does your inventory have that top-tier quality and high enough value to make leasing seem attractive? No. I've looked at the domains you've got listed and I would struggle to sell those, let alone lease them.

I honestly wish you all the best, but I reckon you will really struggle. Do you have the resources to finetune the legal agreements, setup payment infrastructure, conduct marketing, attract top-tier domain assets? It doesn't seem that way to me, but if you can pull it off, full credit to you.

 

[Data Glasses]

..........http://www.jointventures.com/

only a few could do this i suspect

 

[findtim]

i always say it, "this is real estate", WHY can't many of the same rules apply? i think we are just to naive, myself included, i'm looking to this business model but have yet to get the balance.

look at "westfield" they create a shopping center and then charge rent + % of revenue, if you don't get the revenue then they STOP you lease and kick you out ( i personally know this from a business i was involved in )

they take no prisoners , they want the money and they have the systems in place to check it all.

it IS a viable system, its just what system you use.

i honestly hope to come back to the forum at the end of 2013 with some success as i am FULLY involved in doing this with 3 different test cases right now, no promises just facts but i'm not going to state anything until the end as i am trialing 3 different business models.

it all might turn to S##T but thats all cool, for now, i have no info to give.

tim

 

[Data Glasses]

I think Ricks situation is unique considering the quality of his portfolio

 

[TonyC]

My understanding of the purpose to renting or leasing a domain is purely as a protection mechanism in the event of liquidation, ie J Smith family trust might own for example www.jsmith.com.au and decide to lease it to JSmith Pty Ltd. In the event JSmith Pty Ltd is liquidated, the lease or rental payments for the domain would be in default too, thus the domain would be repossessed by the lessor and thus the liquidator could not get his hands on it and it would be still retained by the owner of the domain, if you get my drift here.......

 

[johno69]

if you get my drift here.......

I don't understand your reasoning. As a domain registrant, you would lease a domain so if they don't pay their rental payments you get the domain back?

Why not just sell then? Get the money before you transfer.

I would never lease a domain from someone else. But happy to lease too others.

 

[TonyC]

Sorry to confuse you in my muddled explanation. If you owned the domain name (and it was valuable) and you were wanting to use it yourself in a business/company structure and you did not want to lose the domain if the venture was not successful ie business/company goes belly up, you would lease the domain name, preferably through a trust, to the company that you set up. The liquidator would take all company assets and sell them. But if the company did not own the name, only leased it, then when it goes belly up, as they do, you would not lose the domain name because it was not an asset of the company. The company would legally only be renting it, as perhaps it would be renting offices. Thus you would not lose your valuable domain name.

 

[johno69]

Setting yourself up to fail in that business by the sound of it lol.

Can always just register it in your own name. Seems like a lot of hassle to not lose your domain name.

 

[TonyC]

There are loads of situations where the simple answer is not the best. Say your family company has been supplying chips to shops (Jones Chips Pty Ltd) and has long established customers. A new upstart moves into the management role and suggests the company have a web presence, ie www.joneschips.com.au. The company trades under this domain also, for many years. However the upstart is a crook and steals the company funds and the company can no longer pay it's debts and is liquidated. The liquidator may sell the domain name to a competitor and the long established domain lost forever. It is applicable in some areas johno69 but maybe not for you and me. cheers