I think that investing in websites is going to be huge within 10 years and that it will be recognized as an actual investment strategy just as stocks, bonds and real estate are today.
We are in the very early stages of websites and if you know what you are doing you can make a killing buying/selling websites.
I want to take advantage of my skills and expertise in websites while it is still VERY easy to make a lot of money flipping websites. That is why I went out and bought a website, I will talk more about this in a minute.
I have known about the great return that websites get for a while now but I have never taken advantage of it. Mainly because I never had the capital to purchase a decent website until recently.
The funny thing is even though I have the capital to buy websites now, I actually didn’t use my own money to buy this new website. I will explain how I did this later in the post. For now, let’s see why I think investing in websites is the best thing since sliced bread.
Website Investing ROI
The return on investment that you get with websites is better than just about anything else, matter in fact I don’t know of anything that will give you as good of an ROI.
Not only is the ROI good, but the investment is also relatively safe if you know what you are doing. To further explain the insane ROI of a website, you can check out the example below:
Website ROI Example
A website making $1,000 a month can be purchased for $20k based on the 20x the 3 month average profit. So let’s say we buy that website for $20k and we get $1k each month in profit.
That ends up being 5% return on your money MONTHLY, or 60% YEARLY. Those are insane RIO and the crazy thing is this is very normal for websites.
Two Ways to Attack Website Investing
There are two main ways that you can invest in websites; the flipping model or the buy and hold model. Both have their pros and cons, but either way works well.
The Flipping Model
Buying a website and flipping it a couple of months later is good for the types of people that can make a quick change to a website and increase the earnings almost overnight.
For example, let’s say a website is making $200 a month with adsense and is being sold for $4,000 (20 x $200 = $4,000). A buyer may come along and notice that they could add some Amazon Affiliate links to some of the most popular posts and earn an extra $100 a month on top of the original $200 it was already making.
This is a quick thing to change and will result in the site earning 33% more each month. The coolest part about increasing the monthly earnings is when you go to sell it.
Let’s say the buyer holds the website for 3 months and it makes $300 each month. The buyer could then go and sell this website for $6,000 (20 x $300 = $6,000).
In those 3 short months, the buyer made over $2,000 in profit on their initial investment of $4,000 if they sell the site. That comes out to be a 50% return on their investment in only 3 months!
The flipping model works best for people that have an expertise in one area and buy a website where they can use this expertise to increase the earnings.
The Buy and Hold Model
The buy and hold model is where you buy a website and hold onto for a longer period of time all while it earns you money each month.
Example, you buy a website for $10,000 that is making $500 each month. You can hold onto this site for 2 years while it earns $500 a month and you will make your initial investment of $10,000 back.
Obviously, if you can improve the earnings on the site you will make your money back even faster. You can then sell it for $10,000 whenever you want to.
Both of these models are great and the one you choose will depend on the type of website you buy, the skills that you have and the type of person you are.
How I Bought a $6,000 Website Without Using my Own Money
I have explained website investing to my parents for the past year or so and they always found it intriguing. However, just recently they have gotten serious about it. We had a long sit down talk about the potential of investing in websites and they wanted to give it a go themselves.
We decided that my parents would purchase the website with their own money and I would run the website. We agreed on splitting the monthly earnings 50/50 and then when we sell the website they get their initial investment back and then we split the leftover profits in half.
For example, we buy a website for $10k then sell it for $16k. My parents would get their initial $10k back and then we would split the remaining $6k between us 50/50.
They gave me an initial budget of $10k-$15k to look for a website that they could invest in. A couple days later after we talked about this, my parents told some friends of theirs and they are also willing to invest another $10k in websites as well.
All in all, I have around a $20k-$25k budget to look for a website or websites to invest in with this money.
This was about two weeks ago, I have made a website purchase since then. Read below.
Information About the Website I Bought
I ended up buying a website that was making $500 a month from adsense. I bought the website for only $6k, which is deeply undervalued.
I got the website at a monthly multiple of 12 ($500 x 12 = $6,000) and it can EASILY be sold for a 20x monthly multiple over at Empire Flippers.
A site making $500 a month should at least sell for $10k, so I got a steal of a deal!
If I wanted to, I could hold onto the site for 3 months, make $500 a month and then sell it for $10k. I would make $4k profit + $1500 earnings = $5.5k profit in 3 months.
However this is not my plan, my plan is to increase the monthly earnings and hold onto it for a while. Then sell it once I feel like I have maxed out the earning potential of the site. I will talk more about my future plans for this in a minute, but first I want to talk about why I liked this site so much(aside from the cheap price).
The Reasons Why I Bought This Website
Aside from the great price I got on the site, there were some stats and metrics that really sold me on this site. They are listed below:
Diversified Traffic Sources
This is huge. We are all aware of how easily Google can wipe a site completely off the grid in no time. That is why it is NOT smart to rely on only organic google traffic for your site, or only one traffic source for that matter.
The site I bought has diversified traffic sources, the breakdown is below (thru 5 and a half days):
If one of those traffic sources gets wiped out for whatever reason, the site would still be fine and earn money. It might not earn as much money as before, but it would still make money and be able to be sold.
The most important thing is that you can’t go from having a website that earns $500 a month to $0 overnight. Multiple traffic streams prevent this happening.
High Volume of Traffic
The site get’s on average 1k-2k visitors each day fairly consistently, sometimes even more! This much traffic which makes testing out different monetization methods a lot easier and more efficient.
NOTE: The dip at the end is because I took this screenshot halfway through the day
Growing Organic Traffic
I was given access to the previous owner’s Google Analytics account before I purchased the site and one of the best things I saw was that the organic traffic has increased each month for the past year.
I don’t have access to their account anymore so I can’t show you firsthand. However, you can see the growth from Semrush in the image below:
Semrush does a good job showing the google organic traffic growth by tracking the number of keywords that are in the top 20 of Google.
You can see that the amount of keywords that this site ranks for in the top 20 continue to grow month after month. This is a great sight to see.
The reason for this continued to growth is because the previous owner writes 3 new articles a week and the site ranks for a TON of long tail keywords.
Under Optimized Monetization Methods
Google adsense is one of the easiest ways to monetize any website, but there are usually better ways to do it. Adsense also makes it very easy to use other monetization methods ALONG with adsense.
For example, it is very easy to use Amazon and Adsense to monetize a site without affecting the original adsense earnings too drastically.
The only source of income for this site is from adsense and I think there are better ways to make money from this website. I am thinking about trying Amazon Affiliate, other affiliate’s within the niche, selling ad space and selling my own physical product.
I also think I can improve the adsense earnings because the previous owner had poor ad placement on the site. They didn’t have any ads within the content, which from my experience is one of the best earning ad placements you can choose. That alone should increase the earnings.
One of the biggest areas where I think I can improve the sites earnings is from optimizing for mobile users.
I noticed that the site only showed one ad when viewing the mobile version of the site, instead of the normal 3 ads when viewing on a desktop.
This means that A LOT of money is being taken off the table by not optimizing for mobile users. This is especially true considering over 50% of the sites users are mobile.
I think by changing this I can improve the earnings greatly.
Proven Track Record
This site was created over a year ago and has increased traffic/earnings steadily since then. There has also only been one owner which is a good thing to see.
Relatively Safe Investment
Since I am using other people’s money to buy this site, I want to make sure the website I am buying is as safe as possible. This means that there are no major risks or red flags surrounding the site which could possibly wipe out the earnings and traffic.
Diversified traffic sources, proven track record, clean backlink profile and it’s monetized by adsense all make this website investment very safe compared to normal websites that are purchased.
I talked earlier about the two types of investment strategies with websites; the flipping model and the buy and hold model.
I will be going for the buy and hold model with this site for a couple of reasons:
- The site itself is very safe and I see it being able to earn very consistently each month.
- I do not know the full potential of the site yet so I will hold it as long as I can keep increasing the earnings. I do not see a limit to the earnings on this site.
For those reasons I will be holding the site for a while as I try and maximize the earnings of this site. Once I feel like I have reached the peak in terms of earnings potential I will then think about selling the site.
I think that this site could EASILY earn $1k+ a month once I test out a few different monetization strategies and find what works best.
If I can get the site to earn $1k a month then I would be able to sell it for $20k, which is a lot more than what I bought it for!
The future plans for this site are to test out a couple different monetization strategies to see what types bring in the most money. I will also be testing out different adsense ad types and placements to try and max the adsense earnings out.
I will also be trying to add at least 3 new pieces of content each week to continue grow the organic traffic.
I will have a more solid game plan for the site once I have it under my control for a couple of weeks and I can begin to see how the site works.
I know a lot of the content I have produced recently has been about selling on Amazon so I thought it might be refreshing to see a post about a new topic.
I also wanted to let you all know that I bought a new site and that I will be looking to buy more sites as investment strategies in the upcoming months.
I still have around $20k to invest in new websites from my parents and their friends, so I will continue to look to add new sites to my portfolio. If you have a site that you would like to sell, you can email me at email@example.com.
Thank for reading and I will keep you all up to date on the progress of this site and if I buy any other sites. I will write a new update on this site in a month or so.
Thanks again for reading!