How To Leverage Blog Income To Build A Web Property Portfolio

By Yaro Starak
26 Comments

With a title like that you would think this article is going to be all about taking the money you make from blogging and sticking it in shares or property or some other form of investment, and you would be right, but the investment method I’m going to explain to you today is not exactly typical. In fact I bet not a single blogger reading this article will have done what I do with some of my blog profits (feel free to leave a comment and prove me wrong though).

What am I talking about?

I’m talking about reinvesting the money you make blogging into web property, in particular buying websites that generate passive income.

I’ve long been a fan of flipping websites, in fact if you type that phrase into Google this blog turns up as the number one ranking article for the previous article I wrote, How To Buy A Website And Flip It For Profit. At the moment though, I’m not much of a flipper, more a buy, renovate and hold type of investor.

Bloggers Are Broke

Let’s face it, most bloggers when they start out are broke. Chances are you don’t have a few thousands dollars lying around for investing in anything and as a result a low-cost start-up, like a blog, is a common pathway for a budding web entrepreneur to follow.

Blogs might not turn a profit quickly, but provided you put in the elbow grease and follow some principles (Blog Profits Blueprint anyone?) you will start making some money eventually. That’s exactly what I did with my blog, although I had the advantage of a nice salary sized cash-flow coming in from my existing web business when I started blogging.

There is an inherent risk when buying websites. I would say that buying a site and optimizing it so it makes more money is an “easy” way to build passive income (I’ll explain how it is passive in a moment) and it’s a much less labor intensive way to make money online than blogging is, but for most people it’s out of the question. You either don’t have the money or don’t know how to do it or you have too much fear holding you back. Starting a blog is a much less scary proposition for most people.

However, once you build a great blog and your income source is stable, why not start to experiment and build income sources that are not as labor-intensive as blogging? A blog cash-cow can be the perfect fuel for building a nice portfolio of web property which quietly makes you money in the background while you spend your days writing a blog and enjoying the fruits of your labor.

It’s Early Days In The Web Property Market

It might be stupid of me to reveal this since I’m creating my own competition, but the truth of the matter is that the web marketplace, in terms of online property, is full of bargains and there has never been, and never will be again, such a great time to invest online.

It’s like having a choice of hundreds of properties which, provided you don’t totally neglect or destroy them, are guaranteed to increase in value over time. The World Wide Web is a suburb with millions of people moving in each month. That’s some pretty crazy growth and people who own property in this market enjoy consistent gains as a natural run-off effect of that growth.

I know this for a fact because every site I have is organically growing without me doing much. Google continues to send more and more search traffic. Word of mouth helps to bring more people to my sites and while none of my web property are growing super quickly, they are all steady performers.

Best of all, if you know what you are doing, you can find bargains, property priced so cheap people who invest in offline assets like real-word property and real-world businesses, would be stunned when they see the figures for online property.

You can buy web property at about five times monthly revenue. That’s MONTHLY revenue. Okay, it might be harder to find bargains at that price but it’s relatively easy to find sites that sell for 10-12 times monthly revenue. That’s one year of income, so a site that makes $1,000 a month today costs you $12,000 now.

In most cases with a few tweaks and given the natural growth of the web, and provided you did some due diligence before buying your investment to make sure you don’t get a lemon, that $1,000 can be grown to $2,000 a month in a relatively short period of time. You can make back your investment cost within 4-8 months and from there you have a nice $2,000 a month profit center. Do that five times and you have a six-figure yearly income – a potentially passive income source too!

So How Do You Find Passive Income Sites?

Any site that makes money can be a passive income source even if work is required to maintain it simply by setting up a person to look after it. So if you buy a blog that makes $1,000 a month, hire a blogger to keep content fresh and look after the place at $500 a month and you have a passive $500 a month income source that will continue to grow month after month assuming your blogger is doing a good job.

Alternatively you can look for sites that are driven by user-content generation. Sites like forums, social bookmarking communities and directories can function on the back of the people that already use the site, who create content, and the existing traffic coming through from incoming links and repeat loyal visitors.

Turnkey sites, like e-commerce stores that sell a digital product, function without you, converting sales through a web system made up of sales pages and perhaps email autoresponders, delivering the products through electronic distribution. There can be customer service needs, but of course this can be outsourced too.

There are plenty of types of sites out there that can be made passive or near-passive. It really depends on what style of site you understand so feel confident optimizing, and what your budget is.

For many of you reading this, blogs are a great option because you know how they work. There are many blogs for sale, the tricky part is making sure you can keep the content coming either by writing yourself or bringing on other bloggers. Buying a blog instead of starting a new one from scratch is another way to quick-start your professional blogging career and also teaches you the process of buying a website, which can be a very beneficial experience down the line when you go to purchase more online assets.

How Can You Start Investing In Web Property?

You only two things to get started:

  1. The money to invest – I’d aim to have at least $5,000 USD saved up, although you can pick up smaller sites for a few hundred to a couple of thousand dollars. The most expensive site I have bought so far was $12,000 and the cheapest was $2,000.
  2. The inclination to make it work. You need to have the time to monitor marketplaces, to implement strategies, research sites, find sellers, do due diligence before buying and then optimizing your new property (“renovations”).

Having a blog that consistently makes money is the perfect leverage tool to get you into web property. It’s takes some patience and foresight to make a decision to reinvest profits rather than spend them, but you will be glad you did in the future as your portfolio increases in value.

In the later stages of Blog Mastermind I’m going to teach my students how to buy and sell a blog/website, so if combining web property with blogging is something that interests you, please consider joining Blog Mastermind.

Yaro Starak
Web Property Investor

About Yaro Starak

Yaro Starak is the author of the Blog Profits Blueprint, a report you can download instantly to learn how to make $10,000 a month, from only blogging 2 hours per day. You can find Yaro on Facebook, Twitter and .

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26 Comments

  • WOW Yaro!

    Talk about maintaining your momentum!

    I like to print out your fine articles. So many nights, I find myself reading til 4 am, 5am. I look at the clock and simply can’t believe the time.

    Excellent article!!

    What can I say but WOW!!!

  • Excellent post, very interesting ideas. It’s yet another reason to purchase the blog mastermind programme.

    Thanks

  • Thanks you two – glad you liked the article :)

  • wow, i really like this post as it gives me good insight. i’ve always been interested in physical real estate, virtual real estate seems so much more worth the value.

  • Yaro,

    Did you do the $1 SIMPLE trial through Stomper? They let you watch the full keynote speech from Ed Dale, and this is pretty much what he said as well. You might want to check it out if you have access and haven’t already.

  • Yaro,
    A very thought provoking article, this is what I am doing right now, I have taken action to do exactly that. I have subscribed to your blogmastermind

    Vijay
    Freedom is all I want
    Freedom is all I shall have.

  • Hey Blaine,

    I didn’t join SIMPLE – too busy writing the blueprint and preparing blog mastermind to do much else back then.

    I know Ed though so I might check about getting access to simple next month.

    I’ve seen Ed’s sales speech and I have the orlando event DVDs, so maybe there is more Ed there.

    I love this topic, it’s like investing in real estate on a small budget.

    Yaro

  • Fasinating post Yaro! I have heard about this process, and always intrigued to learn more. Thanks for laying the foundation of knowledge, and ‘ditto’ to what Erica said above…more reason to join your Mastermind Prg ;-)
    Patiently waiting its release…

  • Since there is an unlimited number of domains possible (combination of words) I am confused how things can be getting better and bigger. Yes, more and more people are going online but aren’t they spread out as more and more websites go live?
    The established websites may benefit but what about all the little guys just starting out?

  • Bob

    Great article, Yaro

    “In fact I bet not a single blogger reading this article will have done what I do with some of my blog profits (feel free to leave a comment and prove me wrong though).”

    Well, I tried once, but it was a failure. I bought a site for few hundred, his owner claimed it makes about $40 per month, but in fact it barely makes 40c. But that was a valuable lesson for me, I learned from my mistake and now regularly looking at the marketplaces for better deals.

    My point is, like with any investment there is a risk here that you may not return your money. But the odds to win are much better than with buying offline property

  • I think that something that wasn’t really touched on in this article was the fact that diversifying a website portfolio can also a have lot of drawbacks in terms of being drawn away from core competencies.

    I’m someone that earns a full time income off the web and it allows me the freedom to venture into other areas and fields, but I have almost always found that venturing too far from core competencies often leads many ventures that just don’t reap a ROI even close to that of the one you would have achieved if you were to have focussed more on your core competencies.

    I mean website flipping can no doubt be extremely profitable and I have purchased a couple of domains and sites in the past which are now effectively “cash cows” but for the most part, I look back at these and still go, all in all considering the time invested they were a waste of time and I should have been focusing on my core competencies, but this is probably more due to my inexperience with site flipping/investing by not selecting good “web properties” to invest in.

    I guess it is the old situation of you are better off being the master of one skill than a jack of all trades, because I mean anything can be done profitably if you do it efficiently, effectively and with scale.

    But for the time being my profits are being reinvested in getting people to do exactly what I have been doing for the last 36 months and working on projects in areas that I know inside out with tried and true methods, but now just being done on scale and a lot more efficiently and effectively.

  • […] wrote a very interesting piece on “How To Leverage Blog Income To Build A Web Property Portfolio” in his blog and I can never more. However ones blogging income is derived, he advises that […]

  • Blog Profits Blueprint is fascinating information on blog marketing. Congratulations, and thanks.

  • You’ve really invested a lot into your projects — It’s good that it seems to be paying off for you.

  • I agree internet properties are great investments. But I mostly stick to parked domains, which require no maintenance at all.

  • Yaro,

    Thanks for the tips on this very interesting topic. It would be great to see an article from you in the future about what to look for in the due diligence process.

  • Nicely put, but I’ll have to prove you wrong because I’ve already been thinking about doing that, actually I’ve been thinking about doing that for the past year and still haven’t gotten around to doing it.

    I’ve developed blogs/websites for the past 6 years and I love doing it, 9 times out of 10 I build them from scratch doing everything and turning a profit, only really have to pay for the domain name and hosting, everything else just takes time.

    Time however is running out in most cases so I might have to begin taking the easy way out and buying an already build blog or website, fixing it up, do some SEO, rank it better, drive more backlinks and traffic then flip it or keep it depending on the work involved in keeping it running.

    The moral to all of this is to say even though I’ve not got into that particular market with my blog earnings, I have gotten into the domain portfolio market, thats what I do with all my blogging profits at the moment, I buy generic, popular, domain names and hold onto them for a long long time in hopes that maybe one day they will be worth 500,000 or more like cyperspace.com is now worth or computers.com or anything else for that matter.

    Keep up the good work and nice blog.

  • I am on the third part of my three part leg to divest myself of sites that I own. No, I am not getting rid of everything. Instead, I am turning around and developing new sites, acquiring established sites, with the hopes of building a fresh portfolio.

    Several of my newer sites will be flipped and I’ll start the process again.

  • […] worth? There are totally non-scientific methods, or there’s more scientific methods, like Yaro’s 5-times monthly income’ formula. Taking both of those methods, the Get Rich Project is wirth somewhere between $400 and […]

  • What great information! I am in commercial real estate and own several income producing residential properties for passive income. I have never thought of web property…makes since! I think I will look more into this.

  • My business partners have made a habit of buying unused domain names and developing them out into full sites with huge potential.

    It’s amazing how much money so many domain owners leave on the table by just putting parking ads on their domains. Which is pretty similar to what you are suggesting about flipping sites – except the sites my partners buy are completely undeveloped at all.

    Once developed of course the traffic escalates quickly, and with it comes the revenue. It doesn’t always require a huge amount of work either. Then you can either sell the whole developed (flipped) site, or keep it for a great passive income!

    My partners love their passive income. They just love making money while they sleep, and even better, while they are on vacation!

    – Gary Webber
    http://www.badcreditremortgage.net/

  • Great Article. Turnkey websites are becoming more and more popular every day for newbies as well. I look forward to reading more of your articles in the future.

  • Web real estate sounds a little more fun these days than the wood-framed type. My question is, how much of a blogs success is tied to the author. In other words, if I buy sites on topics I don’t write about, won’t their success wither away without fresh content as good as the existing?

  • Even though this is an older article I still think it is a great read. Thank You for the valuable information.

  • The key to succeed in this business model of buying web property is to know your market, as they say location, location, location. The buying of websites and then hiring blogger is and can be expensive maybe not in the short term.

    You have to keep fresh quality content so that readers and bloggers alike can find you. However, as newbie this would be hard for me to do as I don’t have the cash flow, and I guess I would be very careful before I move into this space, as it is easy to take a chance when you have cashflow but when you blogging to build dollars it can be heart broken if it does not work out. It is a good business idea but only recommend when you have substantial cash flow I would say $50,000 to $100,000 to account for ramp up time. Just a thought.

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