Web sites and real estate? I might be joking, right?
What could be possibly similar between those two entities?
Actually they are so similar that I could call them twins. 2 sides of one coin. Let me explain my point.
(Please note that I'm talking here only about investment properties, not about the house that you call your home. Your home of course can't fit into this category - it serves completely different purpose. Your home is about your family and love and friends and memories and Christmas Eve and about all your hopes and plans - so it's impossible to place a price tag on this special piece of real estate.)
No, I'm not talking about home. I'm talking about real estate property, either commercial or residential, that you bought to create a positive cash flow and passive income by renting or leasing the space in it.
You know the average market price. And you have pretty good idea how much exactly you would get per month for renting it.
What factors have determined this price?
- Location (prices in New York, NY differ from those in, say, Lincoln, Nebraska);
- Neighborhood (whether there are good schools there, malls, theaters, nice restaurants, low crime rate, and so on);
- Condition and specific features of your property;
- Square footage;
- Number of bedrooms and bathrooms;
Now, I'm not going to give you a crush course on real estate investments, it's just it's important that you see all those factors while I'll analyze another side of the coin - a website.
When you create a web site, what do you do with it? Provide some useful information for your visitors, and either sell something on it or use another monetization mechanisms, such as AdSense or you rent your web site's space to other advertisers.
Or wait, did I just say "rent your space"? Yes, I did. You rent a space on your website exactly the same way as you do with your investment real estate property.
And you can get pretty good money by doing this. As a matter of fact, there are many guys who're raking many thousands of dollars each and every month placing AdSense ads.
What factors do determine the price of your web rent?
- Location. Your web site's position in major Search Engines. There are hundreds of different search engines, but what really matters is your site's position in Google,Yahoo and MSN.
Are you on a first/second/third position for many popular keywords in your niche market? (Popular in this case means that those search terms are entered by actual live people thousands of times per month).
Are you on a first or at least second page of the results displayed for those keywords?
If you are on a good position then you get a lot of traffic and, hence, many targeted visitors to your web site.
- Neighborhood. Two most commonly used factors to estimate the "prime neighborhood" in web site terms are Google Page Rank (known as Google PR) and Alexa Rank. Both those estimation parameters have their own flaws, but nevertheless they are used by all webmasters and internet marketers.
Basically, PR is estimated based on a quantity of incoming links for your site (quality of links is also taken into consideration, but not too much). The higher the PR the better.
Alexa ranks the traffic flow to your site. The lower the Alexa number the better.
So the good neighbors to do business with are the sites with higher Google PR and lower Alexa rank.
There are also bad neighbors and the whole bad neighborhoods. Those are websites and networks of websites banned from search engines for the attempts to trick search engines in order to receive higher position on the search engine result pages.
Usually it happens when some sort of automatic site building or cloaking or another way of search engine spamming is involved.
Watch out for those sites. If you have an outcoming link from your site going to one of those sites, as part of link exchange, remove it immediately or search engines might think that you're part of the gang and will ban you too.
- Condition. Pretty much self-explanatory. What is the quality of your website, how valuable it is for the visitors, etc.
- "Square footage". In case of your web site it's the size and the position of the ad on the web page.
- "Number of bedrooms and bathrooms" - on how many web pages are you willing to place the ad from the advertiser for the certain price.
As you can see there is much more common between website and investment real estate than you could think.
That's a reason why websites are called Virtual Real Estate.
So start building your Virtual Real Estate today and you will have all the benefits of real estate investments without the risks of that business.
After all, you're not paying taxes simply for keeping your site, you don't have all the hassles with tenants. If you don't like the advertiser - you simply don't rent him your space anymore. No house or flood insurance is required either (just make sure you regularly back up your site).
There you have it. On a golden platter. The business with minimum risk. Just start creating your web sites! Today!