The wave of the future: domain names for lease.

The price of .com domains have skyrocketed and so have the number of domain leasing opportunities.

Much like physical real estate, domain names, especially .com domains, have become quite expensive and will likely see an exponential increase in years to come.

From small start-ups to mom-and-pop shops to national chains to global conglomerates, the one commonality all can agree to is the need for having a premium domain name as a means to generating greater customer growth and revenue for their business.

With more and more businesses being started by entrepreneurs or those involuntarily forced too, the need for a short, memorable and search-friendly .com domain name is in great demand while those mentioned attributes of a .com domain name are in short supply.7 tips for profitable domain leasing.

Many short, memorable and search-friendly .com domain names are account for and have been for quite some time.

Business owners starting out in business or looking to take their start-up to the next level will pay more than a pretty penny to secure ownership in such domain names.

Knowing that a premium .com domain name may be out of your grasp or price range, leasing a domain name instead of buying it is becoming a less expensive, popular and simple way of starting or taking an online business to the next level.

Domain leasing offers a business an opportunity to secure prime virtual real estate without having to come up with a large sum of cash at once and leasing domains keeps a desirable domain name out of competitors’ hands.

However, domain leasing is subject to some terms and conditions for a defined period of time.

When this time period expires, the two parties can sign a contract renewal agreement or the company may wish to buy the domain if their online business is going well.

Review and consider these 7 tips when domain leasing

In addition, there might be some negative aspects of domain leasing for selected companies or businesses, and so I offer the following to review and consider when leasing a domain name:

1. Get it in writing

For the purpose of safety, make sure you, as the renter, and the domain owner have a solid and trustworthy lease agreement in place signed by both parties.

Without an agreement, you might lose revenue if the domain owner suddenly decides to change the DNS record to stop further traffic to your website.

2. Use an attorney AND domain broker

To make the contract, contact a professional attorney and an experienced domain leasing broker instead of doing everything yourself.

Although it may sound tempting to forego all the important steps and jump to building your website and making it online, this urgency may prove to be detrimental in the long run if the other party is not totally reliable.

3. Don’t forget specificity

When drafting the contract, you need to consider some key points.

These include the term of the contract, purchase option, first right of refusal, and the price or the rent amount.

Make sure each and every point is given adequate importance and is completely understood by both parties without any ambiguity.

4. Understand the lease term in its entirety

Term means how long you will be able to use the domain as a renter. Most companies consider leasing for a full year.  However, lease terms may also be as short as a month. If you are considering additional terms, make sure you agree on a rent amount for those terms.

5. Don’t forget to include a lease purchase option

The option to purchase the domain at a later time is one of the most important points in a lease agreement.

When you start a business, you’re not sure how things are going to turn out in terms of revenue generation particularly in case of online businesses.

Sometimes you do so well that you have absolutely no reason whatsoever to quit.

In such a case, you would like to buy the domain name you’re using to continue with your business operations as the domain owner rather than the renter.

It is therefore very crucial to discuss the purchase option beforehand.

6. Don’t forget to include a first right of refusal

Loyalty, or right of first refusal, means the domain owner is allowed to sell the name if they receive a tempting offer and the term of lease has not yet ended. If you, as a renter, allow this to happen while things are going pretty well, you are going to lose a great deal of money. So, allow this only if you are not serious with your business or wish to call it quits after the lease term comes to an end.

7. Consider month-to-month or an annual lease term

Decide on a rent amount and how frequently you are required to make the payment.

If you choose a yearly plan and you are considering multiple terms, you may want to offer the domain owner a payment of first two or three years.

The rent term may also increase over time and this is decided by the domain owner.

All these points should be mentioned in the lease agreement so that nothing happens without the consent of either party.

All the best with finding the perfect domain to lease…

Consider these top 7 things carefully when domain leasing, and remember that leasing domain names is a tempting option for both the owner as well as the renter.

However, if things are not properly handled, both parties may suffer a great deal of money loss as a result of this exploitation.

It is therefore very important to do your homework and explore all other options available before leasing domain names for the new venture you are planning to take on.

Written by Alvin Brown
He's an experienced and passionate serial entrepreneur, founder and publisher of Kickstart Commerce. Alvin possesses a great love for startups dominating their market using profitable digital strategies for greater commerce.