Ideas and Validation February 16, 2020

Rent Domain Names

Yaro Bagriy @yaroslawbagriy

Greetings IH,

Would you use an app to be able to rent out premium domain names? Basically, founders don't need to compromise their brand due to overly priced domain names. Com extensions are the top extension to have, except some of them cost a lot of money. There have been many times I've thought of an idea, thought of a name, then went to namescheap to find out the domain name I wanted is for sale for $3000. No smart person would spend $3000 right away for a domain name, and thus need to settle on a new company name or a less desired domain extension.

Basically this service would allow you to rent that domain out for $5 or so a month (whatever the owner decides) and you can use it. Kind of like renting a house.

Looking for feedback if this would be a good idea and even technologically possible. I believe it is possible, but not sure if people or domain owners would want to use it.

  1. 10

    The practice of buying domain names just to resell them at a higher price is an immoral business no matter the type of "payment strategy" and creates no actual real value.

    With how fast the internet is expanding the concept of '.com' extensions being the 'must' isn't as true as it was before.

    I'm sure you come with a good intention on trying to solve a rather annoying system, but I would most likely never use such a service.

    That being said, I'm just one person and I'm sure you do have a huge business opportunity as many people would rather opt-in this kind payment strategy.

    Good luck.

    1. 7

      You're not just one person alone in this. And you've quite precisely said everything important on the topic, so just a +1 from me.

    2. 1

      I don't really see how it's anymore immoral than owning land and renting it.

    3. 1

      Yes exactly, this is one of the ideas I have, but Com is still the top. When will others have the same weight? I hope the stigma with Com names goes away too. But even then lots of business names with io, org, net, and other cooler newer extensions are already taken. It's crazy!

    4. 0

      You're not just one person alone in this. And you've quite precisely said everything important on the topic, so just a +1 from me.

  2. 5

    No absolutely not. If I spend time, effort and money building a brand and SEO, while someone else owns the domain and can shut off the tap and jack up rent, I wouldn't sleep at night. Sounds like a terrible idea. Move on.

  3. 4

    Cant really see this viable...

    From domain owner view, I would be absolutely crazy if it turned out I was renting my domain amazon.com for $60 a year to Mr Bezos.
    From a business owners view I would be crazy if I built an amazing business and then got a ridiculous bill/blackmail to keep the domain all our customers knew and used.

    An alternative already exists though. Many popular domains for sale are also available on payment plans. So you can pay a fraction a month while you validate, quit and only lose what was previously paid, with a clear contractual path to ownership. Done this route twice.

    1. 1

      You bring up a really good pint. This contractual path with the option to buy or not sounds much much better. What site does this?

  4. 3

    This idea is sadly a non-starter. No serious minded business person would build their company on a domain which could be taken from them at any time.

  5. 3

    Domain rental/hire purchase is already a thing so yes possible.

    1. 1

      Any sites I can use?

      1. 1

        google might help! there are many I think.

        1. 1

          Funny thing is I googled it before posting and couldn’t find anything. I thought it might have been a viable idea for my business since the domain I wanted was taken. But couldn’t find anything.

  6. 3

    How do you see that model works? in form of the marketplace or your own domains? Need to check the economy of it. You need to have a lot of transactions to get revenue, right?

    1. 1

      Yeah basically a marketplace, since I don't want to own domains. Just allow businesses to have the ability to find and rent them out easily.

      1. 1

        Sound promising than, but still it is “chicken and eggs problem” of all marketplaces - need to promote both sides. Acquisition costs per transaction might be pretty high. I think you should focus on marketing and see if the economy is right.

  7. 3

    I think it's a really wonderful idea, and it's something I've done in the past. We rented a domain from a guy with 36 month terms and a fixed purchase option price. We were free to stop paying at any time, but we'd instantly lose the domain if we did. And he was unable to pull the domain out from under us as long as we paid.

    The idea was that we'd know within 36 months whether our project was going to work or not (it didn't).

    The owner simply transferred the nameservers where we asked and that's all he had to do.

    1. 3

      Love this. Option to buy the domain at a fixed price at the end of the term seems let to make it attractive.

      1. 1

        Yeah it's a necessity. Otherwise you could build a $4MM business during the rental and then get extorted.

        1. 1

          Ohh yeah you're correct. I feel the legal/contract part of this would be difficult to solve.

    2. 1

      Wow that’s awesome to hear this is actually possible in a business sense! That’s exactly the problem I wanted to solve, what happens if the project fails and I spent so much on a domain. Thanks for the feedback!

      1. 2

        And the guy we rented it from STILL has it parked several years later. When people say that a domain is "worth" a certain amount of money... well maybe in theory, but it might take 20 years to sell it.

        I don't know how you keep sedo from simply stealing the feature.... but I think this is a really really good idea!

        1. 1

          Yeah so it’s also a benefit for the owner to rent it out in the meantime that it’s “for sale”, thus still earning money on the domain. What is Sedo?

          The hard part is getting businesses and domain squatters both to use the platform. Creating a marketplace is always tough. Possible, but tough.

  8. 2

    Interesting idea. Should use Harberger Taxes or an auction mechanism:
    https://en.wikipedia.org/wiki/Arnold_Harberger?wprov=srpw1_0

  9. 1

    I like it. I think it already exists, at least in some form, but the process is opaqe.

    I have personally known of companies that rented domains for 10 or so years with a pre-set price to buy if they decide they want to buy after the rental period.

    But the process is opaque at best.

    Maybe something like flippa with a rental option.

  10. 1

    Domain rentals are already a viable industry. I am aware of individuals and companies who manage domain portfolios for rent.

    Also follow DNJournal.com to keep abreast of domain industry news (it's operated by Ron Jackson).