Course / Lesson 8 of 8 ยท 3 min read
Renewal math: keep or drop
Renewals are a bill you pay every year on every name. The math below decides if domain investing makes you money or costs you money.
The basic math
100 names x $12 renewal = $1,200 a year
Sell-through 1% = 1 sale a year
Marketplace cut 20% (example)
To break even, that one sale must bring in
$1,200 / 0.80 = $1,500 or more
Now look at your own list. If your names sell for $500 on average, a 100-name portfolio at 1% loses money every year. You need better names, fewer names, or both.
The keep-or-drop test
Before each renewal, ask three questions:
- Has anyone made an offer or asked about it?
- Do real comps still support my price?
- Would I buy this name today at this renewal price?
If all three answers are no, let it drop, or list it cheap to other investors before it expires.
Keep records
Track every purchase, renewal and sale with dates and amounts. Sales may be taxable, and your costs matter when you work out the gain. Ask a tax professional how this applies to you.
What to do next
Pick ten names you could buy. Run each one through Lessons 3 and 4. Buy only the one or two that pass. Put them in your spreadsheet, list them for sale, and wait. That is the whole job, done well.