In this economy, where do you invest your money? What gives the best returns? We still believe that one of the best, least-known investment opportunities is investing in websites.
In fact, over the last few months, we have been quietly purchasing websites both for ourselves and some clients. Why do we think this represents a good investment? Here’s a quote from an earlier article:
A little-known way of making money online is that of investing in virtual real estate i.e. buying websites.
I know you are conversant with the idea of buying land or houses so I will use that as an example to make a point. If you buy a house at Kshs 5 million and then rent it out, the monthly rent that you can charge is usually 1% of the buying price (this sometimes varies but it is the average). Therefore, the expected rent of a house worth 5 million would be Kshs 50,000 a month or Kshs 600,000 a year. To get back your 5 million investment, it would take 8.3 years. This is considered a good investment.
A better one would be to buy a small business. The average rate of return on a small business is about 20% – i.e. if you buy a business at 5 million, you should expect to make 1 million a year. This means that it would take you 5 years to get back your investment.
What about buying a website? The strange thing is that the value of a website is usually only about 12 – 24 times its money income. That is, if a website makes Kshs 10,000/- a month, the selling price should be a maximum of 240,000/-. This means that it only takes you two years to get back your initial investment.
Sounds like a good investment to you? (Read More)
Think about that. If you spend Kshs 5,000,000 on a website you should expect to make up to Kshs 500,000 every month. And, guess what? Some types of websites require NO input from you. Can you imagine making a passive 500k every month? I don’t know what to say – I simply cannot think of a better investment in this economy! Can you?
Let me share with you a snapshot of recently sold websites to further drive the point home:
From the above, the average cost of purchasing a website is about 10.7 times its expected monthly revenues.
This means that if a website makes $100 (about Kshs 10,000 currently) every month, then its expected purchase price would be $1,070 (about Kshs 100,000 currently).
A website that cost you $1,070 (about Kshs 100,000 currently) will earn $1,200 (about Kshs 120,000 currently) in one year.
Sijui if this makes any sense to you. Personally, though, at Nickel Pro we have been aggressively investing in websites to the point where now a significant part of our revenues is on “autopilot” (it comes whether we work or not). Hakuna pesa tamu kama hiyo, let me tell you! 🙂
So, as you are thinking of where to invest your money. Spare a thought for websites. In my opinion it is one of the best investments out there. If you want to get into this but have no idea how to search for, value, evaluate and manage a website, give us a call. We’ll work something out.