In the year 2022, young entrepreneurs are learning that earning passive income from digital real estate isn’t all that difficult.
Due to the ever-growing popularity of online search, businesses are increasingly looking for ways to generate foot traffic in the most affordable ways.
This has led to a dramatic increase in the value of digital real estate, as well as in the number of people who are investing in digital assets.
I am not suggesting you start a lead generation company. All the viewpoints in this article are available online from various sources, and all thoughts stated here are simply my opinions.
Read this post to the end to see how you can gain financial independence and live life on your own terms.
What is Digital Real Estate?
The term digital real estate is defined as any online property that can be used to generate revenue. It includes websites, social media accounts, email lists, youtube channels, sponsored content, affiliate websites, or basically any internet property that can be bought, sold, or rented.
Mostly though, digital real estate refers to lead generation sites that have a digital landlord who charges local business tenants a monthly fee. In return, a virtual phone number is located on the site, and the GBP, and calls that come in are forwarded to the local business.
The Most Common Form of Digital Real Estate
The most common form of digital real estate is the combination of a website and a google business profile that has been optimized for the local business industry. It’s generally referred to as niche marketing and small business owners don’t need to have an existing website or any digital assets for that matter.
How does it work?
Let’s say someone searches “plumbing Tucson” because they are looking for a plumber. And let’s say that a small local plumber is trying to get started in Tucson.
Chances are the big companies with a lot of reputation will almost always get the top spot on google search and because of this get all the phone calls.
But what if you as the marketer were to buy the domain name https://plumbingtucson.com and create an “online business” with a google business profile called “Plumbing Tucson Group”?
With some of the skills presented below, you could basically rank quickly for the term.
Lead Generation (Rank and Rents)
The above scenario referred to as Lead Generation Sites are very powerful and generate tons of phone traffic for local businesses. They can be rented out to local businesses with a price tag of anywhere between $500 – $2000 per month. This of course is dependent on the niche, the population of the area, and the cost of the job.
How Does Digital Real Estate Generate Passive Income?
The great thing about digital real estate is that it can be used to generate passive income. The main reason is that it has a VERY low overhead.
The thing about lead generation sites is that once all the up-front work is complete, (more on that below) the payments come in without needing to do much more work.
Don’t get me wrong, it’s not 100% passive because it involves client relations.
Client relations can be quite difficult if you get a problem client so in order to keep your digital real estate business as passive as possible, you need to be very selective when it comes to who you rent to.
The ability to generate passive income from these properties makes them very appealing to young entrepreneurs, who are always looking for ways to make money while they sleep or focus on other activities.
Overhead Costs of a Digital Real Estate Business
The only time digital real estate is truly passive is if you buy a “done for you” online business. Other than that, there is actually a decent amount of work and overhead costs involved… at least up front.
Ranking a brand-new site can take some time and money. SEO can be expensive and time-consuming if you are trying to rank the initial site and get the google business profile into the top 3 map pack.
So if you can you should try to buy digital real estate that is already optimized and has a client attached to it.
Let’s Break Down the Up-front Costs
Here are the basic costs that will go into your digital real estate investment.
Buying a domain
Likely the cheapest part of the process. You can get domains anywhere from 1.99 to 19.99 a year, with recurring costs of less than $20 annually.
Hosting the Domain(s)
You will need to pay for a service that either hosts your own website or use a service like Wix, Weebly, or Squarespace to host the website for you.
Either way, if you are looking to provide at least a decent experience for potential clients. So you are looking at a monthly cost of anywhere between $10 – $50 per site a month.
$50 a month may seem high for one site, but if you have a ton of traffic going to that site you will want to invest in caching plugins, good hosting, and security.
Ranking the domain (SEO)
Depending on your competition, this can be the most expensive part of the initial process. You will need to do keyword research, write (or outsource) content, and build links from other websites giving you authority.
If you know what you are doing this can mostly just take a ton of time. If you are willing to pay to outsource your SEO, you could be spending anywhere from $500-$10,000 to rank a site.
This of course depends on how much competition there is in the area where you are trying to rank.
Setting up a Google Business Profile
The actual process of creating a Google Business Profile is free. However, the verification process requires a card to be mailed to a physical property.
So if you don’t live in the area you are trying to rank for, then you will need to pay someone to receive that card and give you the code, or you will literally need to rent a location in that area until the card arrives.
I will say that I have seen some very shady and expensive tactics used in order to get a Google Business Profile setup.
Unfortunately, I have also seen too many GBPs get suspended to recommend doing any of them.
You could spend anywhere from $0 – $300 on getting one of these setup.
Voice Internet Phone Number
You will want to control the phone number that will receive calls for your digital property and forward it to your client’s business number. There are several reasons for this:
- To track how many calls come in from your property specifically.
- So both you and the client are on the same page when it comes to the quality of leads coming in.
- So you can use the number with another client if the current client should decide they want to terminate the agreement.
Buying a service is pretty much the only way to go here unless you are an open-source nerd who can set up a VOIP server.
My favorite provider is currently Call Scaler. Their base plan is $39/month.
Don’t forget about Training
Digital real estate is a lucrative industry, but it takes more than just knowing how to build a website. If you are serious about digital real estate investing, you need to understand SEO, design principles, and conversion optimization.
Fortunately, there are plenty of virtual world resources available to help you learn these skills. You can find mentorships or online courses that will teach you everything you need to know about digital real estate investing.
Training can run you anywhere from $47 – $5,000 depending on the quality of training and the community that you are joining.
Digital Real Estate Portfolio
Many people make money online in the form of passive income by buying up digital real estate assets. Sometimes you can make more money if you don’t have to do all the leg work.
If you are going to buy digital real estate outright you can expect to pay anywhere from $1000 – $20,000 per virtual property.
Main Skills Needed to Become A Successful Digital Real Estate Tycoon
The following are the bare minimum skills you need if you are going to purchase digital real estate to use it as a lead generation site. As with all investments, digital real estate investments have risk involved. More on that later as well.
SEO (Search Engine Optimization)
Understanding how search engines work is the main skill you need in order to be successful with digital real estate. You need to know how to optimize a website, as well as other online properties, in order to rank it high in search engines and earn more revenue from it.
The reason why SEO was such a popular strategy was that it is technically free. If you have the skills to rank your website or digital asset using only SEO, then you can generate revenue without having to pay for ads.
Pay Per Click
A lot of the time SEO can take a while. Like many online businesses, you may need to purchase ad space in order to make more money upfront.
Frankly, running a successful digital real estate business requires that you at least understand how google ads and Facebook ads can help you in a pinch. In the risks section below I explain a scenario where you may actually need to run ads just to get by.
Not only that, you can run a successful digital real estate agency with only a social media account and use ads like Facebook ads, google ads, and a youtube channel to push leads to your clients.
If you are looking to buy ad space, what you are going to want to master is return on ad spend.
If you can get your ads down in price, you can earn money for your clients without the need for SEO at all.
The main problem with running ads for digital assets is that the competition is high. And it will be hard for you to earn money if you are blowing it all on your ad spend.
Sales and Cold Calling
Get ready to hear “NO!” Like a whole ton. Most people have already heard about this type of marketing and are literally sick of sales calls coming in all day.
There are tactics to get around this though and with just a few dollars invested in a phone service, you can typically outsource most of this process.
Are you a good salesperson? You need to be if you are going to succeed in the new digital world. You think the opposite when it comes to virtual real estate, but it’s actually quite an uphill battle to rent out a digital asset.
Most businesses need to be persuaded into renting an online product from someone. Most mom-and-pop shops you will be working with have never even ventured into the digital land of marketing. In fact, there are plenty of businesses out there that don’t even have a social media account.
So your job is to convince these people who don’t even have a website, have never run ads, and probably don’t know what a digital asset is, that they should spend money with you.
You will at the very least need to know how to sign up for a website service of some kind. You don’t have to run and host your own blog or website (at first), but you should be familiar with how to at least buy a domain.
Many people start with Wix, Weebly, or Squarespace, but if you are going to go all in with your online business, then you should definitely learn how to buy hosting and install WordPress. If you are looking to create multiple income streams then you should definitely skill up on how to build a website.
Basic Knowledge of Social Media Platforms
Social media marketing is not dead in 2022. Not by any stretch. In fact, there are so many ways to get website traffic using social media, that you will want to use more than one social media platform.
You will also definitely want to create a youtube channel for each online asset you are trying to promote. Having a youtube channel is a great way to get in front of prospective customers. Since all social media is free, using it gets you one step closer to passive income and securing your financial freedom.
But What if there is a Better Business Model?
A business model with low risk, low start-up cost, affordable maintenance, traffic targeting, adaptability, and an extremely high ROI.
I am here to tell you that the above model is not too good to be true. In fact, it’s what I’m using to make thousands per month with this one site.
Let me introduce you to affiliate marketing!
An affiliate marketing business is straightforward to start.
As an affiliate marketer, you are simply recommending products to others. The only money you need to spend will be to set up your website if you choose to buy a paid website. Low investment is one of the most popular reasons to become an affiliate marketer.
There is literally an unending list of products to sell.
Almost anything that can be bought has an affiliate marketing program.
The best part of becoming an affiliate marketer is that there are no contracts, no sales calls and you can work whenever you feel like it.
How Else to Make Money With Digital Real Estate?
There are several ways to make money from digital real estate. However, the easiest way to make money is by using the Lead Generation system I explained above.
It’s not the only viable way to make money from digital real estate though. It just happens to be the system that has received the most attention over the past couple of years.
Several obstacles can prevent you from making money with an online asset like a Lead Gen site but now that you know how digital real estate works, you can at least understand how to make money from it.
Stay tuned for other ways to create passive income and make money with other digital products.
10 Great Ways to Invest in Digital Real Estate in 2022
There are a bunch of ways you can invest in digital real estate, including many of the following digital assets:
1. Buying and selling domain names
One way is to buy and sell websites or domain names. This is a little more complicated than it sounds. First, you need to do your research and know how to bid on domains that are likely to be worth more in the future. The price of a premium domain name is determined by many factors, including:
- How much traffic it receives
- How easily it can be monetized
- Its scarcity and uniqueness
Domain names that are likely to sell for a premium include those with brandable names or short, memorable names that are easy to spell and pronounce.
2. Selling and Trading Crypto and NFTs
Another option is to invest in crypto assets like cryptocurrency tokens or other digital currencies. These assets are highly volatile, but they can also be very profitable if you know how to trade them effectively. In addition, some crypto assets like non-fungible tokens (NFTs) can be used to create digital “collectibles” or assets that are unique and valuable in their own right.
3. Investing in Ethereum or Other Blockchain Technologies
Other digital real estate investments include investing in companies that are developing new blockchain-based platforms for digital commerce or buying and selling online real estate listings.
Blockchain is very new and still needs a ton of research and market testing before I would recommend dumping a large sum of capital into it.
4. Running an Ad Network
Ad space is very very valuable. If you want to sell ad space you need to have really good content. This will allow you to attract high-quality advertisers, who are willing to pay a premium for quality ad placements.
5. Investing in Online Marketplaces or eCommerce Stores
Another option is to invest in established online marketplaces or eCommerce stores. These platforms are often very profitable, and they can be a great way to get exposure to the digital real estate market. Some of the top online marketplaces and eCommerce stores that you might consider investing in include Amazon, eBay, Etsy, and Alibaba.
Shopify has exploded and dropshipping is a great way to use virtual real estate to create passive income.
6. Selling Digital Products like e-books, audio, video or other digital properties.
Audible specifically is starting to blow up. They have a great model and are offering exclusive audiobooks to their members. You can invest in Audible, as well as other digital products like e-books, online courses, audio programs, and video content.
7. Create A Membership Site
Another way to sell digital products is to create a membership site. Inside the membership site you can promote products that you create or that you are selling as an affiliate.
Just drop an affiliate link on some sponsored content and you are good to go.
8. Investing in Real Estate Crowdfunding Sites
Finally, if you want to invest in digital real estate but you don’t want to deal with managing websites or domains, then investing in real estate crowdfunding sites might be a good option. These sites allow you to invest in real estate projects around the world, and they often have high returns with low risk. Some of the top real estate crowdfunding sites include Fundrise, Realty Mogul, and PeerStreet.
9. Use Social Media Accounts (Buy Social Media Accounts)
You can create groups, and build an audience that allows you to sell to a very targeted niche. Social media sites like Facebook, Twitter, and Instagram are great ways to build your online presence and develop a following.
The easiest way to get started down this path is to buy an account that already has a large user base and promote a product that matches the niche.
10. Purchase Virtual Land Like Metaverse Real Estate
This is new to me, but the more I think about it… the more it makes sense. There is a company called Metaverse that allows you to purchase land on their virtual open-world platform. Some people are starting to call this “virtual real estate” or virtual land, and it could be a profitable investment opportunity for those looking to capitalize on the rise of virtual reality.
Overall, there are a lot of different options for investing in digital real estate online.
It may not be easy to earn money online, but there are plenty of ways to try. While a lot of the above-mentioned digital real estate investments are not exactly passive, they can still be very lucrative if proper research and planning are done.
Is Digital Real Estate Legit?
We were happy to provide you with this “all you need to know” digital real estate investment guide. As with everything in this new digital world, there is plenty to learn. Now that we have taken a tour of this vast virtual land together, let’s sum up what we learned.
Although digital real estate may initially seem like yet another get-rich-quick scheme, it is actually an excellent opportunity for entrepreneurs and investors hoping to generate income online.
After discussing digital real estate, how to invest in it, and the earning potential of these ventures, we would be remiss not to mention the risks and downsides of owning a virtual property.
Risks Associated With Digital Real Estate
When you invest in digital real estate you aren’t guaranteed success. The virtual world can be just as volatile as the real world. Renting or selling digital real estate can be as risky as the stock market since you are essentially buying and selling intangible assets. Here are some other factors that create risk.
Google’s Algorithm Changes
You are just happily going along and for the past year, you have followed SEO protocols by the book. Then one morning you log in only to find that your website has dropped off the face of search engine results pages.
This may be due to Google’s algorithm changes, where they are constantly updating their search engine to provide better results for end users, which sometimes affects digital real estate ventures.
When you aren’t on the first page, the business that is renting the property from you isn’t getting any calls… that’s for darn sure.
Google Business Profile Being Suspended
This has happened to me so many times that I’m actually VERY weary about buying any more lead generation sites.
It is against google’s TOS to create a fake business using Google Business Profile. So unless you are simply managing a GBP on someone’s behalf, it’s not a good idea to set one up if the business isn’t actually legit.
When you lose your GBP, all of your map traffic essentially goes down the drain. This means you could have an entirely virtual real estate business built on rented virtual land that gets suspended overnight, and all at once you’ve lost your entire investment.
Pay Per Click Ad Pricing Increases
Another hardship of trying to make money online is when prices for pay per click (PPC) ads go up. Google and Facebook are constantly changing the way they do things, which means that organic traffic is becoming a lot more expensive. In turn, paid traffic is great until those PPC rates go up, which could start eating into your profits.
Digital Real Estate Investing vs. Physical Real Estate Investing
The key difference between traditional real estate and digital real estate is that digital real estate requires different sales tactics and doesn’t have a consumer base that is actively seeking it.
Whereas with the housing market, people will always need a place to live.
People won’t always need online real estate, so they need to be convinced that it is something they should buy.
Physical Real Estate Costs More Than Online Real Estate
With traditional real estate, investors are required to purchase physical property, which can be costly and time-consuming.
Physical real estate generally also requires a loan from a bank or other financial institution in order to purchase the property.
Digital Real Estate
Digital real estate, on the other hand, can be invested in with a few clicks of a mouse.
Additionally, the earning potential for digital real estate ventures is much higher than for traditional real estate investments. This is because the global online marketplace offers more opportunities for monetization than the traditional brick-and-mortar marketplace.
Basically, when you own digital real estate, you can then rent it out for way higher margins than with physical real estate.
Why is Digital Real Estate So Valuable?
The income stream you can make from a virtual property is essentially passive, meaning that you can invest once and then watch your returns come in over time.
This is a huge advantage compared to other types of investments, where you have to constantly be monitoring the market and making new investments.
Furthermore, the global market for digital real estate is huge and continues to grow, making it a lucrative investment opportunity.
Drawbacks of Digital Real Estate Investing
There are drawbacks though, like price hikes, suspensions, and algorithm changes that can negatively impact your investment.
But overall, digital real estate offers many advantages over traditional real estate investing and is a great way to add a new income stream.
How Much Money Should I Invest in Digital Property?
This depends on how much you have to invest and how much you are ok with working upfront.
It is possible to get started with just a couple of thousand dollars, but you will likely make more money over time if you have larger sums of money to invest.
As a general rule, I recommend that you start with at least $10,000 if you want to grow your digital real estate portfolio quickly and make a decent return on your investment.
Of course, if you only have a small amount to invest or do not want to work very hard in the beginning, you can always start with a smaller amount and then gradually build up your portfolio over time.
Ultimately, it is up to you to decide how much money you want to invest.
Understanding Digital Real Estate Multiples
Multiples are vital to know how much a website or other digital asset is worth. The average multiple for websites these days falls between 20x and 50x the 12-month net profit. Most commonly, though, people use 30-35x when valuing a website.
However, it is important to understand that there are many other factors that can impact the multiple for a given website.
For example, the age of the site, the quality of the content and design, and the amount of traffic it receives can all impact how much a website is worth.
Is digital real estate legal?
Yes, it is legal. However, many agencies run black hat shops that attempt to game the system and create inflated values for their own websites.
For this reason, it is important to do your research and work with a reputable agency when investing in digital real estate. This will ensure that you get a fair valuation for your property and maximize your return on investment.
Pros and Cons of Investing in Digital Real Estate
- Passive income stream
- Global marketplace
- Vast potential for growth
- No physical property needed
- Price hikes
- Algorithm changes
What Is My Top Online Money-Making Strategy?
Well first I should let you know that I’ve experimented with all of the major online business models:
- I’ve used Amazon FBA to sell cornhole accessories.
- On Shopify, I dropped-shipped iPhone Chargers.
- I’ve even used Clickbank to sell women’s health supplements.
And I made money with all of them, so believe me when I say there is no such thing as a “perfect” business model.
It’s worth noting that I wholeheartedly support real estate investing as a means of building wealth, which is why I invest my own money in commercial and residential real estate.
That being said, affiliate marketing is hands-down my #1 recommendation for making real money online as a beginner.
Top Reasons to Become an Affiliate Marketer
Whether you’re a total newbie or have been around the block but never had that “big win” to propel you forward, becoming an affiliate marketer is the by far the best thing you can do to gain financial independence.
Basically No Startup Costs
An affiliate marketing business is extremely easy to start and costs very little.
As an affiliate marketer, all you do is suggest products to other people. You aren’t making anything. If you buy a paid website, the only money you will need to spend is to set it up.
You can even use a free platform like WordPress to host your affiliate marketing site. If you don’t know much about how to set up a website technically, you can pay someone to do it for you for a small fee.
Endless Products to Choose From
There is an infinite number of products to recommend to people.
Almost every product available for purchase has an affiliate marketing program. If you get tired of writing about one type of product, you can easily switch to another.
When you become an affiliate marketer, you are not required to sign a contract requiring you to market only specific products. You have complete control over the products that will be marketed.
You Will Be Your Own Boss
Affiliate marketers are self-employed. You set work hours. You can pick your workspace and project. You can choose and change the products you sell.
Truly Passive Income
Once the upfront work is complete, you can sit back and collect paychecks with minimal effort. This frees you up to either build a new revenue stream or relax and do whatever you want.