If you have seen HGTV, you are probably very familiar with the popular shows that revolve around flipping houses and commercial real estate. As appealing as real estate investments seem, they do require a huge upfront investment. Contracting skill, or the lack thereof, is another big issue. Add to that list – timelines, taxes, risk involved, stress and the fact that an empty house, however expertly renovated, produces no income; and you’ll see why house-flipping is not one of the most feasible money making ideas around.
So, what should enterprising youngsters with low budgets do? Flip virtual properties. Yes, you can flip virtual properties pretty much the same way as real properties. No, not in a “second life” sense, but real websites, blogs and forums. Just like real properties, you keep an eye out for a great deal on a good website which you then buy, “renovate,” and resell for a nice second income. Hammer-shy thumbs rejoice!
Some of the basic prerequisites of website flipping are:
- A computer with a good Internet connection, to handle new sites with all the bells and whistles. This is not one of the money making ideas that you can pursue at your public library.
- A basic knowledge of how websites work, how they’re built, and webmaster skills. If you’re technically-minded, you may be able to pick this up from books and the Internet; if not, one or two computer classes at your local community college would be helpful. If you plan to upgrade the sites you purchase, you’ll need a higher level of skill. In this enterprise, the more you know, the more successful you’ll be.
- Cash. The amount is up to you; some websites sell for hundreds, others for higher amounts. Just be certain it’s money you can afford to lose. There’s a learning curve to website flipping and, as in any venture that relies on supply and demand, a certain element of risk.
You can enter the world of website flipping via one of two doors. The first, most expensive, is to go out and purchase under-performing properties on sites like Flippa.com. If you have a good eye, you may be able to find a deal. However, as site flipping becomes more popular, people are less likely to undervalue their work. It’s not unusual for sites to be listed at 10x their average monthly income, just as a bricks-and-mortar business might be. This leaves you looking at prices in the low thousands, along with any equipment, software, and educational expenses you need. For this route, $5,000 might be a reasonable number.
If this is too rich for your tastes, you can always begin by designing your own websites to list for sale. While this approach may take longer (weeks or months, compared to the days in the first method), it has its benefits. For one thing, you gain invaluable experience and technical skill as you build your own profitable sites. You make connections via forums and any outsourcing you choose to do. As you monetize your own properties, you’ll gain an understanding of what works and what doesn’t. And you’ll save money. Depending on how much work you do yourself, how much you outsource and any software, design, themes that you buy, you can build your own site for as little as a couple of hundred dollars or less (keep in mind that using technologies like Flash will up your costs).
How Much Can You Make?
As you start exploring the world of website flipping, you’ll soon see self proclaimed entrepreneurs trying to sell you “the secret to making millions!!!!!” (exclamation points theirs), often through big, flashy pop-up forms. While most such claims are very likely to be bull crap, there do exist a handful of people who have actually sold their sites for five or six figures. For instance Chris Guthrie claims to have sold his site netbookreviews.com for a six figure income. There is even a press release to this effect.
Realistically though, most website flippers’ incomes tend to be lower–somewhere in the hundreds to a couple thousand dollar range, depending on the volume, demand, the quality of sites, and the ability to price and negotiate a sale. As one flipper states, “…it’s possible to make enough money to pay for that monthly car payment or mortgage.”
Advantages of Working as a “Website Flipper”
Moonlighting in the world of website buying-and-selling has its perks, such as:
- Choosing your own hours.
- Effectively monetized sites will start to bring in some income even before they’re sold.
- The ability (at least in part) to determine your income by the amount of time and effort you’re willing to expend.
- Relatively low initial investments.
- The mental stimulation of learning new skills.
- The ability to enter a business in which your effort is all that matters–not your age, appearance, disability, or other factors.
- The convenience of working at home–or anywhere you can find WiFi.
Disadvantages of Working as a “Website Flipper”
Of course, there are also some downsides to the flipping business…
- You’re at the mercy of the market; if supply exceeds demand, which it might as the notion of flipping as one of the great money making ideas becomes popular, prices will fall.
- It’s difficult to juggle what can at times be a time-intensive job with your work and family life.
- Although the initial financial outlay is less than, say, getting started in real estate or a restaurant, it is still a substantial one for many.
- If you’ve never worked on websites before, you may have a steep learning curve. You can do it, but it will take time, effort and commitment!
- You’ll need to stay aware of hidden costs, such as hosting or any outsourcing you may choose to do.
- The Internet is fairly unregulated, leading to all manner of scams. You’ll need to be savvy and stay updated on every new permutation.
- You can (and probably will) lose some money in this business. If you can’t withstand some financial risk, or the stress thereof, website flipping is probably not for you.
You can tailor your website-flipping business to fit your needs and interests. If you find you enjoy the “art of the deal,” you can limit your focus to buying and selling sites quickly. If you love the idea of creating a great site from scratch, you can center your efforts on your webcrafting skills, buying and selling when it suits you. You may enjoy taking a poorly-designed, underperforming site and turning it into something special. You can concentrate on one particular niche, or offer a much broader range of sites catering to different industries. Blog about your efforts, moderate a forum, write a book, become more involved in affiliate marketing, or even enter the job market as a web designer!
It can’t be overemphasized that anyone wishing to become a web-based entrepreneur needs to remain alert to the existence of scam artists. The online world attracts plenty of people willing to do whatever it takes to make a fast buck at others’ expense. If you fall prey to a flipping scam, you’ll often not only lose your money, but your site’s rank, your AdSense account, and some of your online reputation. And be careful not to inadvertently end up as a scammer yourself. Keep yourself well-educated and always one step ahead of the game.
In many ways, the Internet is a bit like the Old West; while its lack of regulation makes it a bit “wild,” its opportunities are wide open to anyone with the ability and determination to make his or her dreams come true.