Virtual Real Estate

I consider Web sites or ‘virtual real estate’ as kind of the new real estate. Any Website that can capture eyeballs has value and can generate an income stream.

I’ve spent the last 5 years building this type of income to support myself and after reading François’ comment I thought I would make a brief list of what is necessary to build a Website that bring in monthly cash flow.

1. Time – I’ve heard that normal businesses take 2 years break even and 4 years to make profit. Expect it to be the same on the Web, it’s a long term commitment.

2. Focus-Some time ago I had a temporary but large drop in income because of Google search changes. I thought I was intelligent to ‘diversify’ by starting more sites. That was a mistake and I should have made maybe 1 other site maximum. To be successful focus on 1 Website. Make it the biggest and the best in your niche. Don’t disperse your efforts and available money to invest in your site by spreading it around to various sites. You need absolute focus to win. Most people do many things halfway instead of one thing in an excellent way.

3. Monetization plan-This is tough to know if you’re starting out. The most common things are advertising (AdSense and banners/direct sponsors), selling something, or affiliate type selling/advertising (promoting other people’s products for commissions.). You can also provide a subscription based service from the Website. You must have a realistic plan to get money from your site. Don’t use wishful thinking and just throw up AdSense ads.

4. Traffic-Getting traffic nowadays is no piece of cake. See point #1. You need content, lots of content to grab people from search queries (original content of course) and as many incoming links from other sites as you can get. If you are selling something you can also advertise in AdWords or spend some time finding some good sites to purchase ads on directly.

5. Consistency and perseverance-Work on your site daily. Understand that it will take time and consistent effort over a long period of time. If you keep building and course correcting on the same project, eventually you can turn it into a winner.

6. Passion-Yeah this is probably the most overused piece of advice but its spot on. This is one of my big question marks about ‘real’ real estate. Do I have the passion to keep going, to keep learning, to put up with challenges and headaches and to do all the administrative work of real property investing. See, I know have that passion with Websites, so I can work through challenges or frustrations.

7. Avoid scams-Don’t get excited by things you read online. There is no great business opportunity online. Choose a niche you are really interested in and build a site around that with a monetization plan.

In my experience selling advertising and using AdSense is the most comfortable way to build an online income stream. The upside is that you focus mostly on the Website and creating content. When earnings are built up they are pretty consistent. The downside is that it takes a long time to build a lot of traffic and income.

Selling products can generate more money faster but it takes more work, knowledge, systems and client support. Digital products are great because there is no shipping of products. How-to Ebooks have been popular for a while and I sell some in Spanish. However I think that a better product to sell (and to be able to market/sell) and provide more value is an online course. It’s like an e-book but you add other types of written content (like power points), action guides, videos y audios.

So building an income producing Web property is like running a small business. The great thing about the Web is that you can automate so many things to make the income more passive.