Investing Outside the Stock Market: Guide to Four-Letter Domain Investments

Looking for a quirky new investment? Try finding some of the last available 4-letter domains on the internet. 4-letter domain names, also known as “LLLL.com” domains are a hot new commodity among investors due to their increasing scarcity in a dot-com-saturated world.

4-Letter Domains Opportunities

The best opportunities for 4-letter domain names are so-called “CVCV.com” (as in consonant-vowel-consonant-vowel) and their close cousins “VCVC.com” (the reverse). Investors prefer these because they are both pronounceable and brandable. Just think–you could, quite by accident, be sitting on a goldmine after purchasing the hot new internet brand’s domain.

Some 4-letter domain names have been garnering astounding prices for a mere domain.

Names like WHIB ($48,600), ADEL ($10,100) and BOOQ ($10,000) have fetched five figures, with ZAYO ($7,500), ZEEL ($7,000), NOBA ($6,000) and RIPA ($6,000) fetching in the high four-figures. Even 4-letter domain investments like FARU ($4,000) and VAMI ($3,100) have sold for prices that are nothing to sneeze at.

Pronounceable, CVCV domains with repeating letters like FOFO, BOBO and BEBE are considered the cream of 4-letter domains opportunities.

Less-Attractive 4-Letter Domain Investments

VCVC and CVCV are the most popular–and lucrative–investments. Even CVVC domains like BAUR are less attractive to investors. Still, pronounceable domains like BAUR and ZEEL are better than unpronounceable domains like SDOS ($4,000), TAGF ($1,250) or UZPM ($1,000).

While these figures pale in comparison to the figures for 4-letter domain investments mentioned above, they still boast a handsome return on an initial buy of $60.

Guidelines for Investing in 4-Letter Domain Names

Some general guidelines apply to all domain investing, especially the current 4-letter domain names craze. Finding available 4-letter domains isn’t always easy, but don’t jump at the first one you find.

• Quality: You can get domains on the cheap, leading some investors to buy as many as possible, hoping to have the next Tubmlr or Rdio in the mix. Instead of buying 1,000 domains, pick 100 that are high-quality and likely to resell. At the very least you can recoup your investment.
• Dot-com is King: Don’t waste your time on .mobis or .biz domains. Your chances of selling these at a profit is significantly diminished.
• Go Pronounceable or Acronym: To be an attractive investment, 4-letter domain opportunities should either be pronounceable or stand for something. Don’t purchase XPQR.com simply because it’s available.
• Buy from Reputable Registrars: Stick with the classics when buying domain names. Blue-chip registrars like GoDaddy and Moniker have been around a long time and will likely continue to hang around. Don’t buy from a fly-by-night registrar just because the price is negligibly lower.
• Focus on End-User Sales: Buy low, sell high–to the end user. Even if you only get a few hundred dollars for a domain name, that’s still a return of 10 to 20 times your initial investment. Be ready to make a little sales pitch about why your domain has value in the first place.
• People Can’t Type: How many times have you accidentally gone to Fcebook or Twittter? These sites have value, as the legitimate companies want to buy them for redirecting traffic. RIDO.fm and LSTA.fm are examples of 4-letter domains opportunities that can become very lucrative very quickly.
• Get in a Strong Position for Negotiation: Don’t rely on domain sales as your primary investment strategy. Use it as a happy rainmaker of found money. One of the reasons Rick Schwartz made $750,000 off of iReport.com from CNN is that he doesn’t rely on domain sales to eat. Keep domain sales as a back burner option in your overall investment strategy. This will help you negotiate from a position of strength.

4-Letter Domains Available

You’re likely asking yourself how many 4-letter domain names are left. While many of the .coms are taken, you don’t have to resort to exotic and often worthless extensions to find a domain.

Look at the more common domain extensions like .net and .org for 4-letter domains opportunities. There are almost certainly nuggets of gold waiting to be discovered. Even if the big money goes to the .com version, whoever buys it will be more than happy to part with some of his startup capital for the sake of protecting his brand.

Getting in on 4-Letter Domains Investments

Investing in 4-letter domain names is a bit of a crap-shoot. You could end up having the next RDIO or you could end up holding the bag on a brand that never materializes. Still, if you are smart, limit your spending and use it as a side investment in your overall portfolio, you could luck into some serious cash.