Rental Anyone had any success leasing domains?

[markb]

Hi, Just wondered if anyone on here had actually leased any valuable domains and if they had any success? Noticed some websites like venture.com and domains.co.uk which seem to build their business around leasing, but wondered if anybody had any experience of this?

I understand many people wouldnt want to lease a domain, as they wouldnt own it, and therefore your building a website/business on someone else's property.

But I can see that if someone owns a really valuable/great domain, then it maybe possible to actually use it without the large upfront cost to purchase, and possibly buy it in the future, if the business takes off.

 

[Carlos]

I was looking for info on this subject and found a sedo article discouraging it:

Sedo does not encourage domain leasing for the following reasons:

1. An individual or a company leases a domain for two years. They market the domain (creating banner ads, entering it in search engines and directories, etc) to increase the visitor numbers. However, once the lease expires, the domain owner has the right to lease the domain to another party or even increase the leasing price significantly.

2. Although the previous leaseholder may have invested a lot of money into the domain through their immense marketing, it is the domain owner who ultimately profits. The domain owner can raise the lease price or sell the domain for a higher price if they desire, whilst the leaseholder is left with nothing.

3. Misdirected emails can be equally problematic. If the domain is leased to a new party, the owner of the domain may receive emails which could be of great importance, intended for the previous leaseholder.

If you are still interested in leasing a domain, we recommend drawing up a contract which deals with these points in particular. In our experience, leasing domains can often lead to disputes. If you are interested in leasing your domain and your domain meets the criteria mentioned above, please send an email to our brokerage team.

https://sedo-int1.custhelp.com/app/answers/detail/a_id/90/~/can-i-lease-domains-through-sedo?

I would like to know more opinions as well.

 

[MikeJDS]

I understand many people wouldnt want to lease a domain, as they wouldnt own it, and therefore your building a website/business on someone else's property.

But I can see that if someone owns a really valuable/great domain, then it maybe possible to actually use it without the large upfront cost to purchase, and possibly buy it in the future, if the business takes off.

You have probably already thought about this, but here's what comes to my mind..
Owning it may not be a problem, but not having control over it could potentially be setting yourself up for a big fall in the future.
I could see benefits for someone leasing a domain for a short term goal, like an advertising campaign for example.
As for building a website & then as you said look at buying it when your business takes off is surely like writing a blank cheque to the domain owner.
I think in this case ALL prices & deadlines would need to be agreed upfront, but of course you would have to be Very confident of the business being a success.

 

[martin-s]

I think it's probably viable for low-ish value domains where it wouldn't be the end of the world if the tenant royally screwed the name over.

But the risk seems way too high for premium names.

 

[markb]

I think it's probably viable for low-ish value domains where it wouldn't be the end of the world if the tenant royally screwed the name over.

But the risk seems way too high for premium names.

You could put it in the contract that if the domain reputation is damaged in anyway then a penalty needs to be paid, I.e 100 x monthly lease cost.

Anyway, what i really wanted to find out by this thread, is if there where any domainers out there who had successfully built a business on leasing premium domains and if there was a market for it?

 

[martin-s]

You could put it in the contract that if the domain reputation is damaged in anyway then a penalty needs to be paid, I.e 100 x monthly lease cost.

You could, but that's only helpful if the tenant can pay.

 

[keys]

There may be occasions when leasing is an attractive option both for a business and Registrant, but I in most cases I see more hurdles than benefits.

There is perhaps some comparison with business vehicle leasing. For example, on a three year contract, at £xxx per month you could have exclusive use of a car or van which would be £xx,xxx as a capital expense.

Vehicle leasing is a competitive market, and price comparisons are easy. Domain leasing is almost unheard of. Therefore finding a rate acceptable to both parties is one issue. Anyone savvy enough to quantify the value of a leasing a domain, will likely be well equipped to find a reasonable deal for outright purchase.

There is a good chance that a premium domain purchase will be an appreciating asset, compared with lease of physical items which depreciate over time. Successful use of a domain is also likely to add value. Why would a business want to give that away at the end of an agreement.

Having a purchase option mitigates some of the above, but even if it is viable, reaching suitable customers would be a challenge. Overall I think the concept is a non-starter, unless you are in the premiere league of portfolio holders with credentials to match.

 

[scottmccloud]

You could put it in the contract that if the domain reputation is damaged in anyway

The concept of how a domain's reputation could be 'damaged' is so subjective, I'd imagine it would be hard to pursue through the courts if you needed to.

 

[Adam H]

The concept of how a domain's reputation could be 'damaged' is so subjective, I'd imagine it would be hard to pursue through the courts if you needed to.

Agreed, poor reputation could be any number of instances, to name a few :

• Poor or negative indexed reviews of the company on 3rd party sites
• Company going bust leaving a huge footprint behind of a previously used domain.
  
• Hacked site ( neglect ) resulting in blacklisting
  
• Spam / Mass mail black listings
  
• Search console manual penalties ( pure spam, schema abuse, paid links )
• Algorithmic penalties via poor quality backlinks , probably harder put enforce a penalty/fee on that as it would need definitive proof that those lower quality links were actually causing a reputation problem.

Those are the most obvious off the top of my head, id hate to try and enforce anything but I'm sure a good solicitor who understands domains and the interweb would be able to draft a pretty comprehensive contract. Just think of the contracts web-hosts have, they cover some pretty nitty gritty stuff concerning responsibilities of data, I'm sure domain usage and reputation could be done with some nice legal fee's.