There is no doubt that acquiring websites to flip is super popular and a lot of website investors use this as their strategy. And hey, if it works for them good.
On the other hand there is another strategy to website investing I love even more than acquiring websites to flip, which is buying and building.
In this article I am going to break down the pros and cons of both acquiring websites to flip and then the buying and building method to website investing. Though there is no right or wrong method to any type of investing. By breaking down the two strategies should give you a better idea for how you might like to approach website investing in a new or different way no matter how much or little you know about buying websites yet.
Its quite clear that people love acquiring website to flip because you can get your ROI (return on investment) back much faster than they buy and build method. It too is less risky flipping websites as apposed to holding onto the website investment for a longer period of time. The reason there is less risk is because you are not in the market as long and you already have an exit strategy planned.
The other pros to flipping websites is you are not in it for the long haul. Meaning you generally have some available capital available for when you spot another great deal. You too open yourself up to a wider variety of deals because you don’t need to invest in something that you like personally. Your investments are purely numbers based which is great for investing because emotional investing can be damaging to your portfolio.
Now that you know some great reasons for acquiring websites to flip you also want to be completely aware of the cons before you start to adopt this investment strategy. One being that because you are flipping these websites, which is basically buying and holding them for a short time. You don’t particularly allow yourself a whole lot of time to build the business.
With a shorter time frame it can limit you to only making a few quick fixes to build the business before you sell it on. Cutting yourself short like this is not the best way to get a higher ROI. This is because the longer you have to build the website, the more you can grow the monthly income which will then allow you to sell it for even more.
On top of not giving yourself time to build the website before flipping it, you too end up paying more on commissions when selling many of these businesses per year. That is if you sell through website brokers, which you should to get the best price for your investment. One last thing I would like to add is, that by selling many websites per year this puts more workload on yourself talking to and dealing with potential buyers, even if you are going through a broker.
As you can see acquiring websites and flipping has some great pros and some cons to it also. However lets learn just what the pros and cons are of the buying and building website investment strategy.
Sticking to the same pattern of outlining the pros first, buying and building websites is far more lucrative in the long run. Being that you not only earn all the monthly income but as the business gets older and grows more, your capital gain on the website also keeps growing too. So the longer you hold onto the business and keep it growing the more money you make from both the monthly income and from the capital gains if you choose to sell it years later.
What I also love about the buy and build method to website investing is you don’t have to learn how to run so many businesses all over again like you would if you were to flip lets say 3-6 websites per year. By keeping to the same website for years you start to learn more about the business also, which helps you to build it even more, thus growing your ROI too.
Another great positive to buying and building websites as an investment is that with the money you earn from the monthly income, you can save all that up to buy and build even more websites.
As for the cons to buying and building websites, it’s more of a long term strategy where you don’t get your capital gains back within a few months like you would if you are flipping websites. The Buy and hold method can too limit you to the type of website you may buy since holding onto a website for longer and growing it, generally means its better to invest in a website you are interested in. For example, if you like boats then investing in a website which reviews or sells boating accessories would be best for you. Just like if you don’t like fashion, buying a website which sells menswear isn’t going to be a website you would want to hold on to for a year or more.
So as you can see, either way you decide to invest in websites, there are pros and cons to them both. Just like everything in life right. For me personally, I like to buy and build websites because sure it’s a slower road to wealth, although over the long run whilst building those business you can earn a bucket load more. It’s too less work than having to find new websites to buy or new buyers to buy your other websites you are trying to flip.
That in fact is probably one of the biggest advantages to the buying and building method apposed to acquiring websites to flip. Is that buying and building is far less work, where you can save your time and energy to put more of it into building just one website you have already purchased.
In conclusion, its obvious that acquiring websites to flip does allow you to start making money faster where as buying and building is slower although allows you to earn much more. Flipping websites too is a lot more work, however you do learn more from all the different types of websites you may buy and sell. Where as buying and building websites can let you put your feet up a little more often and provides those great long term rewards.
What do you think is the best website investment strategy and why?