DN Avatar there is no way you can "will" this concept to work. It will only ever work if it's a good deal for both the customer and seller.
That's the way business is done. Business is never done if it isn't a win win for both parties.
With that said, if you think this concept is a "win" for those leasing the domains then you should have no problem getting customers taking you up on your offer...
Don't get me wrong every domain owner on these forums would LOVE it if we could effectively retain ownership and collect rents on our domains, we'd all be sitting on beaches now.
Of course as someone who has sold dozens of domains to different businesses I can tell you I've never had someone approach me asking to lease any of my domains, but I've had hundreds ask to buy them...
The data speaks for itself. And at the end of the day that is all that matters.
Your saying the content can be added to another name, great, but it has just lost its identity, there is going to be all sorts of issues from lost links, lost search engine positions, customers going to the old site, not knowing or being able to find the new site etc.
This is the crux of it.
I build lots of sites and I consult to companies on how to improve their internet marketing and have helped buy a number of domains on their behalves and I have NEVER recommended they "lease" a domain...
You are just opening yourself up to be exhorted.
Yes, but if the business wanted to change the domain address then that's their choice. We're not making them and no one is asking them to.
Yes but you can FORCE them to change domains by upping the rates...
If the address has such an impact then don't change the name.
This is honestly not an important issue in the grand scheme of things.
But that's where you are wrong... it's EVERYTHING.
Imagine Facebook leased it's domain name rather than bought it...
When Mark Zuckerberg originally did the deal for that domain what do you reckon the domain owner was wanting in rent per month, $100? $250?
Its a nothing name really.
What do you think the owner would have sold it for? $2000? $5000?
Now 5 years on do you think that same domain owner would still be renting that domain to Mark for $100/month?!?
Facebook is a multi-billion dollar company. He could just turn around and say I now want $1,000,000/month and they would HAVE to pay.
If they didn't he'd just simple change the nameservers... and BAM... one day the site is GONE.
No memo on the site, no nothing, all their rankings in Google would just point to a parked page and there would be a billion users who were in limbo and now left with three choices...
1. Try and find out what happened and if they moved
2. Go setup an account on a rival social media site, ie Google+
3. Give up on social media
It would basically destroy the company over night.
And all because they didn't OWN their domain.
There is only one way I see this working...
That's if there is an option to buy the domain at anytime for a set price.
In the above example Mark Zuckerberg might have said, you know what I'm a college kid with $0 to my name, but I got a great idea and I think I can afford $100/month to lease the domain, but if my idea takes off I want the right to buy it for $5000 at any time.
That's an example of a leasing agreement that may be a win win for buyer and seller.
That said, in my experience the majority of domain buyers are not start up organisations that have capital or cash flow problems they are established businesses that can leverage the domains straight away and for the price of a couple of grand they don't want to mess around with leasing contracts.
This idea you can be an eternal "online property owner" doesn't really work.
That said, if you opt to lease a domain with the option to buy rather than sell you should also be aware of the downsides...
ie basically what you are doing is you are selling someone the option to buy, which gives them the upside potential while you carry the capital loss risk.
So lets say you've come to terms with someone to lease a $10,000 today, and you find someone who is willing to lease the domain for $100/month with the option to buy at anytime in the next 3 years.
At first you might think, this is awesome I'm getting $1200 a year and still get to sell the domain for $10,000 at anytime in the next 3 years, but it's not really as awesome as it sounds because it's now the buyer with all the advantage...
Of in 3 years times the domain has doubled in value due to natural market forces they can buy it for $10,000 and they have an instant profit of $6400 PLUS they have received all the traffic and benefits of the domain for the last three years...
If on the other hand the domain is only worth 20% of what it was worth when the contract was originally signed, then you will have received your $3600 in rent, but now have a domain that is worth $2000, leaving you out of pocket $4400 and once again they received all the traffic and benefits of the domain for the last 3 years.
I guess what I'm saying is you need to be careful what you rent your domains out for if you include a buy option because you are locking yourself in and giving the buyer flexibility and at that point they get the upside potential and you take the downside because you still own the underlying asset and given the online world is a pretty volatile place taking long term positions is rarely prudent.
I have no idea where the future of AU domain values are going, and everyone has different risk profiles, but I think it would be prudent to build in 20% price appreciation per annum if you are going to offer a buy option and I'd be looking for at least a 25% rental yield to protect you on the downside.
ie, if you have a domain that's worth $3000 today and a option to buy at any time in the next 3 years then the buy price would be $5200.
And it would cost $62.50/month to rent the domain or $750.
And it's a tough sell to say to someone if you want this $3000 domain at any time in the next three years you will have to pay $5200, and in the meantime you will pay $750 a year to use this $3000...
Most buyers will just turn around say screw it I'll buy it for $3000, or worse they will say screw it, it's too difficult...
That's my two and a half cents.
