If you want to start buying websites for income, then this beginner’s guide to website investing is for you.
The knowledge we’re about to share helped us buy our first incoming-producing website for $6,500.
… which was making $550 per month in profit. That was 10 years ago.
We then turned that into $1,100 per month, then to $1,900 per month, and eventually to $7,500 per month and more.
But we’re not the only ones profitably buying websites for income – our students, like Mark, Lisa, Nathan & Alexa have all been following our process of buying, renovating, and holding (or selling) websites successfully.
So if you want to understand how buying websites for income works, this beginner’s guide will help you get started.
Here’s what we’re going to cover:
What is Website Investing? (Examples Below)
Website investing is the process of finding, valuing, buying, and then renovating the website to increase its value.
The “value” is the income it generates while you hold the website. It’s also the profit you get when you sell the website.
Rather than tell you more, let’s look at some examples of websites.
Here’s a website that one of our students, Jasmine, bought:
We call this a “learner site” because it’s under $1000, which is what we recommend if you’re brand new to buying websites for income.
As you can see, it’s a website about trampolines – there’s nothing flashy.
Just a simple website with images and articles about trampolines – from reviews of trampolines to the different sizes and shapes.
It’s exactly what someone looking to buy a trampoline would want to know — answers to their questions and reviews of different trampolines so they can make the right decision.
Now then. If you’re brand new to this process of buying and renovating websites, you’re probably wondering…
Can you (really) make money buying websites as a beginner?
Now, Jasmine bought this website for $320.
When she bought it, it was making a little bit of money.
But after she renovated it, it was averaging $250 per month in profit.
So it paid for itself just after a few months.
Recently, she sold the website for $6,000.
… which was 24x her monthly profit.
All because the way her website made money didn’t require her to buy any trampolines or hold any inventory.
It didn’t require her to talk to customers or ship anything out either.
Nor did she have to deal with refunds or customer support.
All she did was provide people with good information about trampolines.
So when people searched for trampolines, they would find her site.
Once there, her website would send to another site where they can buy trampolines as well as related and un-related products.
And when they did, she got paid a referral/affiliate commission.
(We talk more about how these websites make money in a bit).
But as you can see, a $320 investment that makes you $250 per month in profit is a great return.
This is why buying websites are high-return, low-risk investments.
Here’s an example of a typical website that we love buying and investing in:
The site is just about small dog breeds.
And no disrespect to the website, but it’s dog-ugly, isn’t it?
In fact, you may have in the past even seen websites like this and just browsed past it, not thinking much about it.
But websites like this are valuable income-producing assets that you want to be adding to your investment website portfolio.
Why? because this website sold for $140,000.
And it only made money off advertising.
(We’ll show you how sites make money from advertising below)
For now, what we want you to think about is what if YOU owned a portfolio of these websites?
When you know what you’re doing, you don’t want to involve accountants and lawyers.
You can buy and sell these websites by yourself.
Imagine having 10 of these valuable assets.
Remember these investment websites don’t have to be pretty looking.
They can be simple, straightforward sites with good information about the topic.
(We’ll show you why you don’t even have to know anything about your website’s topic to still profit from it).
How These Websites Make Semi-Passive Income
More importantly, how do these investment websites make money while you sleep?
All without you having to manage inventory or staff, or take on unnecessary risk and debt.
Here are three different styles of websites that we buy and invest in (and how they make money):
The first style of website that we buy looks like this.
Unless you speak Spanish, you won’t know what this website is about.
And we don’t, so we have no idea what the website is about, but it doesn’t matter.
That’s because buying websites for income is not about whether you understand the website’s topic.
What matters, is the money-making system behind the website.
Now, this website makes $550 per month selling ebooks.
The ebook answers questions that people have on a specific topic.
So we bought that website for $6,500 and in 12 months, we got our investment back.
Now, we actually renovated that website and doubled the profit.
From $550 per month to $1,100 per month.
(We’ll talk about how you do that below — renovate websites to get your investment back)
The important thing to remember is that you don’t need to know what the website you’re buying is about because what matters is how it makes money and how much money it’s making.
For us, this is quite a small site. But we bought it because it makes money on autopilot. We don’t look at the website. We don’t work on it (our team does). So for us, we prefer to have our money work for us through websites than having it sit in the bank.
The second type of website that makes semi-passive income look like this:
We actually bought these two websites, which were very profitable for us.
These websites reviewed new cars.
If you look up top and to the right, there is an ad for Velocity (one in purple and one in red).
Those ads are put there by Google, so it’s automated.
We partner with Google and they put relevant ads on our website.
And in exchange, they share their advertising revenue with us.
So all we do is maintain the website to make sure people are going to it.
We do that by having good information on there (which in this case are for people who are looking for a new car).
Now, these two websites ended up making us around $7500 per month in profit.
(solely off the advertising from Google)
But we’re opportunistic, so we only held them for a year or so, and sold it for a good price.
When we took into account all our expenses, our total profit from owning those two websites was $190,000.
Those are two examples of websites that make money from advertising.
We don’t need to do anything other than drive traffic to the website by putting good content on it.
The third type of website we target looks like this:
Look at how simple the site is.
It’s not a trendy-looking website.
But this is the sort of site that we love buying.
So what this website does is review fish tanks and the things that you put in fish tanks.
When someone reads that information and they decide to buy something that this website is talking about…
They click a link about the item and go to the biggest retailer on earth: Amazon.
What happens after they click is they get “cookied”.
This allows Amazon to know which website sent them the visitor/customer.
So if that person buys anything from Amazon in the next 24 hours, the owner of Love Fish Tank will get paid a commission by Amazon (at no cost to the buyer).
That includes purchases on an Aquarium like this:
And it also includes items that are not related to what your website review is about.
For example, we have a student that was reviewing natural healthcare products.
And someone clicked through her link and bought a $20 natural healthcare product.
While they were on Amazon, they also bought a $1,500 turbo kit for a motor car.
So the website investor got a commission on the oil AND the turbo kit sale.
We want to reiterate an important point here and that is…
We don’t hold or buy any inventory and we’re not talking to the customer because we’re not selling the actual fish tanks or anything that we get paid a commission on.
All we’re doing is answering people’s questions about a specific problem or question they have.
(In the form of an article, which you get outsourced writers to do for you, just like we do).
Then getting them over to Amazon.
Once there, anything they buy for the next 24 hours you’ll get paid a commission on.
How much can you really make from simple websites like this?
The fish website was making a profit of $3,460 USD per month.
So in AUD, it’s $4800, which would make a big difference for a lot of people.
That said, you will need to learn how to renovate and improve the website.
(We’ll talk about that later).
But once you learn those skills and outsource most of it, the income is pretty passive.
Let’s show you one more example of the types of websites that can give you a high return.
This website reviews chainsaws.
Are you noticing a pattern of the websites that we are buying and holding for income?
It’s all around answering people’s questions about a specific topic.
So if you were going to buy a chainsaw, this website would be very helpful to you because it reviews the different types of chainsaws, the features, the benefits, and what you need to know.
The website at the time was making $135,000 USD per year in profit.
That’s about 150,000 AUD.
This is not a 40 per hour week website to run. They have staff to outsource to create the content and maintain the site (just like you will learn how to do).
Is buying a website a good investment?
Yes, if the sort of websites that you invest in and buy make automated income from either:
- Information (like ebooks and membership sites)
- Advertising (like the Google AdSense and Amazon’s affiliate program)
- Other People’s Products (where they carry all the inventory and manage the customer support).
And the revenue model is about:
- Getting traffic to the website (by publishing content that answers questions and solves problems).
- Converting that traffic into clicks and sales (by linking to products that pay you a commission).
So if you look for websites in similar topics as the ones we’ve shown you, it won’t be uncommon for you to see a 50%-200% return on your investment website.
How To Value Websites (3 Simple Ways)
Let’s say there’s a website that you’re interested in buying…
How do you value that website?
How do you come up with the number that you should be paying because that’s what the website is actually worth?
What’s the rough rule of thumb for how we value websites?
Just like valuing any brick-and-mortar business, there’s a lot to valuing websites.
But to give you a starting point, the value is based on what’s called a multiplier of the monthly profit.
So let’s say the website you’re looking at makes $1000 a month.
In the website investing world, those websites would be selling anywhere from 20-30x their monthly profit…
… which means the website is worth $20,000 to $30,000.
That’s what you can expect to pay if you’re looking at a website making $1,000 a month.
Another way to value the website is how much time is involved in running that business.
The more automated the business generates revenue and the less you have to work in that business, the more valuable it is and the more you’d pay.
In other words, a website that requires only a few hours a week to make $100,000 is worth way more than one that you had to work 50 hours a week to make the same amount of money.
How much should you pay for your first website?
Our golden rule for beginners buying websites for income is to buy websites under $1000.
This means it might only be making $20 or $30 per month.
But if you learn how to get that website to $200 per month, then you’ve just cut your pay-back period from 20-30 months down to 5 months.
That’s the value of starting with a smaller website.
Because the skills that you gain from buying and renovating a $1000 website can be applied to a $50,000 website.
(It’s just a matter of adding zeros to it as it’s exactly the same process)
Let’s show you some examples of websites selling between 20-30x monthly multiple.
Home Remedies for Life (a site in the health niche) sold for 20x the monthly net profit.
This lifestyle website was bought at a 21x monthly multiple.
Here’s another website making $323 per month that sold for a 27x monthly multiple.
This golf website sold for 22x monthly multiple.
20 Places To Buy Websites (& Which Ones To Use)
So where do you find these websites for sale?
You can start with Flippa if you’re brand new to buying websites.
You can also check out any of these other marketplaces below.
Look through it all and see which marketplace has what you’re looking for.
Then join their mailing list so you can get new listings and updates sent directly to you.
Here are the top 20 places you can buy websites:
- Flippa is the largest marketplace to buy websites for beginners
- Empire Flippers makes the buying and selling process friction-free
- QuietLight Brokerage helps you buy bigger online businesses with their advisors who have built and sold their own online businesses
- BlackBook Investments helps you invest in smart online assets
- FE International is for buying 6 and 7-figure websites
- Motion Invest has been said to be the newer alternative to Flippa
- Exchange is for buying eCommerce websites built on Shopify
- SideProjectors is for buying interesting side projects from other people
- Digital Exits helps people buy internet businesses
- Latonas helps people buy money making web properties
- Website Properties helps people buy an online business
- Sedo is for people who want to buy Domains.
- Venture 4th Media helps acquire and generate cash flow positive properties
- Trustiu helps buy websites, blogs and even YouTube channels
- Biz Broker 24 helps you buy websites and internet businesses
- Mirco Acquire helps you acquire a startup in 30 days
- Buy Sell Empire helps you buy established internet businesses
- Free Market helps entrepreneurs buy websites
- Digital Point Forum is an online forum for buying websites for sale
- Negotiante is a new marketplace for buying websites and domains (based in the Phillippines)
If you’re looking for online businesses for sale under $5000, use Flippa.
For established Shopify stores for sale, check out Exchange.
If you’re looking for websites in the $50,000 to $500,000 range, try Empire Flippers.
For monetized and affiliate websites for sale between $500,000 to $5M, take a look at Quiet Light Brokerage.
If you want to buy content websites and you want an unconventional approach to growing them, check out Ewen Finser at Venture 4th Media.
The Most Valuable Skill In Website Investing
If you’re a bargain hunter, learning website due diligence is one of the most valuable money-making skills in this growing marketplace.
Why? Because website due diligence reveals diamonds in the rough.
If you do it right, you can see what’s wrong with a website, so you know where the opportunities to double, triple or 4x its monthly income.
If you skip it or don’t do it right, you could be buying a website that wasn’t what you thought.
To get started, here are the 4 things you want to verify when doing website due diligence:
- Traffic – ask to see their Google Analytics account so you can see if the traffic or number of visitors they say they’re getting is actually what they’re getting.
- Revenue – ask for screenshots, a video walkthrough of their accounts (Ad Sense, Amazon, PayPay) or live revenue verification by doing a screen share through Zoom (where the owner would show you the financials of their site to prove that their claims are accurate).
- Seller – Flippa provides a rating system so you can use that to see how good of a rating this seller has. If the seller is new and has no rating, then do some Zoom calls with them to get a sense of whether you can trust them or not.
- Market – Is the market that the website is in growing or shrinking? Is it evergreen meaning it’s a topic that will continue to be in demand vs a trend. Our strategy is “buy-and-hold” so we suggest websites that focus on topics, problems and passions that people will always have. In broad strokes, these are health, wealth, relationships and passions.
Renovate These 3 Areas to Double ROI in Half the Time
After helping hundreds of people renovate their websites…
To double, triple, and sometimes even 10x their website’s monthly profit…
We found that out of dozens of things you can do to improve your website…
There are only 3 areas that will make the biggest difference.
And this is what you want to focus on after you buy your website.
Because your first goal is to get that website to pay for itself as fast as possible.
Sometimes we can get our investment back in 1 year.
Sometimes, in less than 1 year.
For example, Mark bought a website averaging $2400 per year for $6000.
So if he didn’t add value to the site, it would have given him 40% return on investment ($2400/$4000).
But with some improvements and renovations, the net income went up to $6000 per year.
And that was by month 6 of taking ownership of the site.
That means instead of getting his investment back in 2.5 years or 30 months, he got it back in 6 months.
You can listen to his story below:
How did he do it?
By focusing on the formula for website renovation success.
In fact, these are the 3 areas you want to renovate to get the biggest return for your efforts:
1) Increase Conversions
2) Improve Profits
3) Improve Traffic
What does each of these mean?
Let’s show you some of our student’s websites and how we renovate these 3 areas to increase the value (and income) of their website.
Focus Area #1: Improve Conversions
The first thing we do with any website renovation is to give it a “makeover”.
Why? Because it makes the website “better”.
What does “better” look like?
Here’s a website from one of our students.
(What it looked like before)
This is what it looks like after making it “better”:
Can you see the difference?
Doesn’t it look much better and more trustworthy compared to before?
And that’s important because people buy from people (and websites) they trust.
So the more trustworthy you can make the website, the more money it’ll generate.
A simple way to know what you can do to make a website more trustworthy…
… is to put yourself in the shoes of the website visitor and look at the website.
Any page or section where you’re saying to yourself, “I don’t know about that” or “I’m not sure if I can trust that” is an opportunity for you to make the site more trustworthy.
Another example is Nathan and Alexa’s website.
This is what their website looked like when they bought it (before makeover)…
This is what it looked like after the “makeover”…
Can you see the difference?
Did you notice that both the renovated websites had a similar layout?
That’s on purpose.
That layout has proven to be effective at building trust and helping website visitors find what they need.
The result of this makeover?
A jump in profit from $17 per month to $300 per month, and eventually to $500 per month.
Click here to read their story – how Nathan and Alexa sold their simple content website for 33.8x monthly multiple.
Conversion Booster #2: Renovate The Most Visited Pages
Once we tidy it up and make it much easier for people to find out what they want…
The second “Conversion” area we suggest you renovate are your top-visited pages.
For example, one of the first websites we bought was in the relationships niche.
When we looked at the analytics of the website, we saw that most of the people visited 3 pages.
Out of those 3 pages, only one page had an offer. But the other two pages with 50% of visitors didn’t.
Which meant 50% of the people that visited our website had no idea there was even anything to buy.
So what did we do?
We put a banner on those two most visited pages, linking to the money-making page.
When we bought the site, it was making $1900 per month.
And because it was 10 years ago, we bought it for $19,000
(0.8x yearly multiple or 10x monthly multiple).
After putting those banner ads on those two pages, which is not hard work and you can hire someone else to do, the income jumped to $3000 per month.
Back then, websites making $3000 or more per month were selling for 10-12x monthly multiple.
So if we had resold the website then, we would have gotten $30,000 to $36,000.
But we wanted to maximise the value of the website.
So we kept improving and renovating it until it was making $10,000 per month. Then we sold it for $120,000.
And we rolled that money to buy a bigger website.
That’s how you can make $120,000 from an initial investment of $19,000.
Focus Area #2: Increase Profits
The next area we renovate is how the website makes money (monetisation).
One of the ways you can increase profits is by increasing the average order value.
In other words, get people to spend more per transaction.
For example, one of our websites is about pigeon racing.
This is a topic we know nothing about.
But it did come with 4 ebooks (already written).
So what we did was we bundled them together, so instead of selling 1 ebook for $27…
We sold all 4 ebooks for $47.
The result was we increased our revenue by 74%.
All for a little bit of work.
And 100% of that revenue was profit.
That’s because when we sell an ebook, we don’t have to package it up, we don’t have to ship it. It’s all delivered automatically online.
Remember, you don’t have to know anything about the topic of your investment website.
Take Nathan and Alexa for example.
Just like we knew nothing about pigeon racing, they knew nothing about making cheese.
Yet, they bought Curd Nerd for $950, a website about making cheese at home, which at the time was making $17/month.
So they paid a very high monthly multiple of 63x.
Why? They saw a big opportunity to improve it.
And they absolutely improved it.
Because after the renovation, the profit jumped from $17/month to $300-$500/month.
They’ve actually sold that website for $16,900. And rolled that money to buy another website.
For us, we like the “buy-and-hold” strategy.
But for them, they preferred the “buy-and-sell” strategy.
Both strategies work, so pick what works for your goals.
Focus Area #3: Improve Traffic
Once you’ve given your website a makeover…
You’ve increased the conversion (number of people that take action on your website)
You’ve increased the profits (through bundling and income diversification)
The final area to improve your traffic.
The more people you get to the website, the more people click on your ads, buy information products, or affiliate offers.
We do that by adding content to the site.
Content that answers people’s questions and solves problems on a specific topic.
Which then appears on Google for certain search terms.
That’s how you use content to get traffic to your website.
For example, let’s say you were interested in making cheese from home.
Some of the content that you might type into Google or whatever browser you use might include:
- Cheese recipes
- Cheese supplies
- What do I need to make cheese?
- How do I make cheese?
- Why is my cheese not melting?
No matter what you search for, you want information that helps you make cheese from home.
And the listing that shows up in Google that seems to be closest to what you’re looking for is the link/website you’ll visit.
While you’re on the website, you might browse around and look at what supplies you need to make cheese from home.
So you might end up coming across a page like this where it shows you the different types of cheese press.
If you click the buy now button, it takes you to Amazon where you can read reviews and see the best prices.
And if you end up buying a cheese press or anything else on Amazon, then the owner of Cheese Curd will get paid a commission.
That’s how it works.
What if you’re not a fast writer and you don’t want to write the content?
That’s good because you don’t need to write the content yourself.
We outsource the writing and so should you.
That’s what Lisa did.
He bought a website that was making $148 per month in profit for $3500.
Then added 60 articles to the website by outsourcing the writing.
… where each article costs around $15-$20.
She also invested some extra money to improve the website.
All of which cost $2300.
By month 6, the site went from making a profit of $148 per month to $2014 per month.
Now she has an asset that’s generating consistent income with just 5-8 hours of work a month.
And at a 20-30x monthly net profit multiple, her asset is valued at $50,000 to $60,000.
All from an investment of $5800.
($3500 for the website + $2300 for the content and improvements)
The site, Crochet News, is another example…
Nathan & Alexa bought it for $4,500.
At the time it was making $300 per month.
So what they did was they extended the existing articles on the website.
They basically took the top 30 articles and made them 500 words instead of 100 words.
It increased their website traffic and their income in the process.
The site went from making $300 per month to $900 per month.
And they only spend two weeks of the year on it.
2022 update: following the content strategy we teach in the Digital Investors Program, this site now makes $8,000 per month.
In fact, 2 website brokers have valued it at over $180,000. Very impressive for a $4,500 passive website acquisition.
The best part? They spend two weeks a year on it.
Getting Started With Buying Websites
We hope this guide has helped you better understand how buying websites for income works.
If you have any questions or topics that you’d like us to cover in the future, contact us here.
What did you think about this guide? Let us know in the comments.