Bricks & Mortar Property Vs Digital Property
Property has always been a great way to make money. Parents often advise their children to buy property so that they get their feet firmly on the property ladder.
Some people recommend that you buy property to either flip for profit (buy property cheap, renovate and sell for profit as soon as possible) or to rent out before even thinking of getting a place of your own.
It is seen as a great way to make money and a sound investment.
Property is one of the oldest and best ways to invest your money… or so we were told.
Getting into the property business can be expensive. Even a cheap property will set you back £40,000 upwards.
Anything under £40K is going to be very small, probably in the wrong area and if it is bought to be a rental property, it will probably attract the wrong kind of tenants which will cost you dearly in the long run.
In fact, in some areas of the UK, garages can cost the same as a small house…
Property: The Best Investment Ever?
It wasn’t that long ago when everyone wanted to be Sarah Beeny.
Pre the 2008 property crash, our TVs were filled with shows following wannabe property developers showing us how to do a good (sometimes bad) property flip for big fat profits.
Every man, woman and child seemed to be buying up cheap houses to rent or to do up and sell for profit.
But is it really that good an investment?
Not only is there an expensive upfront cost, the returns can be seriously poor.
It is said that an average yearly yield for a rental property is 8%. Anything less than that is bad, anything above it is good. If you get anything over 12% is considered very good and maybe exceptional.
If we take a buy to let property that can be rented out at £500 per month, this will give a yearly rental income of £6,000.
Let’s say that the property was bought for £70,000 and needed a further £5,000 spent on refurbishments.
In this example, the calculation for rental return would look like this:
£6,000 ÷ (£70,000 + £5,000) x 100 = 8
…giving the property in question a rental yield of 8%.
The problem with traditional property is the expense. The cost of entry into the business can be huge, very few people can just pull £70k+ out of their pockets without a loan or mortgage
As already mentioned, even a cheap property will set you back £40,000 or more.
In some parts of the country, even the very worst property in the worst areas can cost over £40k.
Not just that, the running costs over the year can soon mount up.
Maintenance can be very costly, if a boiler packs up or a fence is blown over, you as the landlord must act fast.
Then there is the issue with tenants not paying the rent. Building up big arrears which if not sorted asap can lead to additional expenses.
If you have seen the Channel 5 program Can’t Pay We’ll Take It Away, you will have seen landlords having to pay for court action against people who have not paid rent for quite some time.
In some cases they can be down by many thousands of pounds. Sometimes the tenants were people they thought they could trust, yet for some reason they suddenly stopped paying the rent.
Bailiffs and locksmiths are called out to remove people once a court order has been granted. If the tenant has left a lot of junk in the house then there is the clean up operation which has to be done and paid for.
If the property itself has been damaged then there will be the expense of making repairs and redecorating before the next tenants move in.
If the unfortunate landlord had a mortgage on the property they then run the risk of defaulting on the repayments and losing the property.
For this, they may need to have an insurance in place. As explained by Harvey Keitel as Winston Wolf from Pulp Fiction in the adverts for Direct Line insurance.
Unless the mortgage is fully paid off, a rental property will be paying off the mortgage for the foreseeable, so you will not see any profit from your investment for quite some time.
All of this for a yearly yield of 8%?
Is it worth it?
Nahhhh, not for me.
It sounds like too much hard work to me.
Especially when you compare it to another form of property which costs a lot less to set up, is less labour intensive and can have returns far greater than those of your typical rental property.
Remember, the average yearly rental yield on an offline property is 8%.
What would you say if I told you that I get a yearly yield of over 400% on a specific kind of property?
I have had more.
The property I am talking about is not your usual rental property.
400% + Yearly Rental Yield
I have 2 such properties which I do very little with and yet they have a yearly yield of over 400%.
- I do not need to worry about maintenance.
- I do not have large monthly mortgage or insurance payments to worry about.
- I do not have to worry about tenants not paying or wrecking the place.
- I do not need to go to court or send in the bailiffs to remove people.
Each month these properties make me money and they should always be worth more than I ever paid for them, as long as they were set up correctly in the beginning
Want to know what kind of property I am talking about?
I am talking about online property, more commonly known as websites.
Websites are very cheap to build but can be sold for staggering amounts of money.
They can also bring in a lot of monthly income. Amounts which far surpass that of the average offline rental property.
Before it was sold for $100 million, Viral Nova was said to have been earning over $500,000 a month in advertising revenue.
There are people who build websites with the plan to sell for a large profit. The work involved, if done right, is a lot less physical and time demanding than that of traditional offline property developing.
The Age Of The Online Property & The Digital Landlord
This article is going to focus on renting online property. There are two main ways that you can do this.
One: You rent advertising space on your website. Either using advertising platforms like Google AdSense, MediaVine, Taboola and ContentAd or you rent ad spaces directly to companies and individuals.
Two: You build niche specific websites on topics like cosmetic surgeries as an example, targeting locations and areas such as cities. Then you rent out the website to interested local cosmetic surgeons once you have landed the website on the first page of the search results.
Method one is the easiest to implement. You build a website focusing on a specific niche or for basic entertainment and add content regularly.
When you add content you share it over the social media platforms. Once you start to get visitors to your website you add advertising from one of several platforms. The most popular advertising network is Google’s AdSense network.
Google pay you for impressions and clicks. Impressions means that for every thousand times an advert is shown, you earn money. It will be only pennies for a thousand impressions.
When someone clicks on any of the adverts that are shown on your website, you earn a commission. It can be anything between pennies or several pounds. It depends on what the advertiser is paying Google.
Once you have AdSense on your website, you keep adding new content and sharing it far and wide. Site visitors will also hopefully share it if they like it giving your content that little viral effect.
Site visitors reading your content will generate page impressions, and those impressions generate money. Any clicks made will earn you more money.
To make really good money you need to have hundreds of thousands of site visitors each month. That amount should generate a lot of good page impressions and there should be plenty of advert clicks too.
You can also run a second advertising network alongside Google AdSense. Networks like ContentAd and Taboola will add a few more pounds into your pocket each month.
It really isn’t that hard to create content which people want to see and share. If the content is unique and useful then it will get shared. And you can easily kick start that by using the free social media platforms, Facebook, Twitter, Instagram and Pinterest.
The more shares you get, the more visitors you’ll get, the more money you earn.
The whole idea behind this is to get as many visitors to your website as possible, and then you will earn a lot more from your advertising rental business.
Renting Out A Whole Website To Specific Individual Business Or Businesses.
This one is a little bit harder than the previous method. Not only have you got to build the website, and get it onto the first page of the Google search results for specific search terms, you also have to convince companies that they need to rent that website from you.
Unlike method 1, this method will require more detailed work. Depending on what keyword phrase you are trying to rank for in the search results. You will need to do a fair amount of SEO (search engine optimisation) and link building to get the website ranked high in the search engine results.
This could take some time and effort to achieve. But once the website is on the first page of the search results you can then rent it to prospective clients… for good money.
Renting Out Your Online Property To Offline Businesses.
Companies need to see the business potential and be shown why renting from you is great for their profits.
It is purely about getting the company new leads, and generating a lot of new business.
For them to hand over several hundred pounds a month to you, they need to know, and see, that the website you want them to rent, will make them hundreds if not thousands of pounds back in revenue.
That may be the hardest part. You will never know what the potential buying power is of site visitors until an offer or service is put in front of them. But you can certainly show the company who are interested in renting your website, how many visitors the site is getting each day, week and month.
When you build a website you attach tracking software like Google Analytics. This will tell you how many people are visiting that website and where they come from.
For example: if you built a website full of information regarding expensive cosmetic procedures and surgeries in and around south Yorkshire, you would then approach cosmetic surgeons in the area with all of the site data.
If they were suitable impressed and convinced, they may rent the site off you for a large monthly fee.
If you can prove that the website is on the first page of Google’s search results and getting a lot of free organic traffic, which has come to the website after searching for specific information, you are in with a good chance that they may rent the website.
How Much Rent Can You Charge Each Month?
What would a website, which was on the first page of Google and getting a ton of visitors looking for cosmetic surgery information in the south Yorkshire area be worth to a cosmetic surgeon in Sheffield?
A few hundred pounds perhaps?
If the average cosmetic procedure was worth £1000 to them, then one new customer a month is probably worth £200 or more. If they could get 2 or more new customers a month then surely they would be foolish to not rent out your website. Would they not?
It is placed in the right spot, high in the search results, getting a lot of free highly targeted traffic each and every day. Is that not a very valuable piece of real estate?
More importantly, the rental yield of an online property is far greater than that of an offline property.
Building a website using WordPress, with hosting from Siteground can cost as little as £120 for 2 years. If you bought a premium WordPress theme, the minimum cost for building a website could be around £200.
Get Started Building Your Only Profitable Website Today: Get Siteground Hosting Here
So if you rented out a website to a company for £200 per month, that would give you a yearly yield of…
200 x 12 = 2,400 / 200 x 100 = 1,200%
Yup, that is right, that is a yearly rental yield of 1,200%, compared to the average offline property rental yearly yield of just 8%.
There are people who own several online rental properties at one time and they can command a lot more £200 a month.
People do this as a business.
Sometimes they do not just rent to one company, they rent one website to many businesses. Charging more for the more premium and upfront positions. The front page for example might be the £200 a month slot with inner pages being price at £100 or £50 each.
One website then could be earning anything from £200 upwards. The sky’s the limit to how much people can make from a website like this.
If you can land a website into a prime position within the search results and find enough clients willing to pay you to advertise their business then you have a profitable online business with a huge rental return.
Becoming A Digital Landlord Owning Online Rental Property. Final Few Words
If becoming a digital landlord renting out online property appeals to you then you need to decide which of the two types you would like to work with.
Method 1 is the easiest by far, you control the content you add to the website, there are no client getting and you do not necessarily need to get the website onto the first page of the search results for specific keyword phrases.
You simply create content and share it across social media.
Method 1 is a great place to start, leading to method 2. At least you will learn how to make WordPress websites and get a feel of the whole process before branching out and trying to build more niche specific SEO focused websites.
Learn how to make easy to build viral websites here: The Viral Code
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