What Is Real Estate?
Real estate is tangible property that you own. Real estate is permanent and affixed to a piece of physical property. For example, real estate can be a house or resources like minerals and water. Or any natural or manufactured modifications constructed on a parcel of land.
What Is Digital Real Estate?
Digital real estate is a property on the internet that you own. Unlike physical real estate, digital real estate isn't tangible. You can't touch or smell it. Instead, you create value by giving people a reason to visit your digital assets. Then you can sell or rent your digital land to diversify your income.
What Are Examples Of Digital Property?
Examples of digital property in Web 3.0 include metaverse land, crypto, and blockchain technology. But Web 2.0 allows the user to be the product. According to Internet Live Stats, there are 8.5 billion searches a day. So in 2023, there's still money with Web 2.0. Here are a few examples of digital property:
1. Websites & Blogs:
Websites and blogs offer low start-up costs and high profitability. But be ready to do the work. It takes significant time to build trust and develop an online audience. (As long as 6-18+ months). However, you can start a website or blog for around $200/per year. This will cover the cost of your domain and hosting. Then get uber-specific about your niche. Pick a catchy domain name and publish hyper-level content that educates, entertains, or solves problems.
Web Tribunal states there are over 600 million blogs out of 1.9 billion websites worldwide. So you need to provide something different or better than what's already online. According to Millennial Money, bloggers with an active following can earn $500-$2000/month in their first year with monetization tactics like affiliate marketing, paid ads, and paid membership plans.
Another option is to build, rank and rent websites in a specific location. Target a sub-service of an industry with enough demand. But get your sites to the top of Google, and they're in front of a ton of eyeballs. These are people who are actively searching for what you offer. Once your site starts producing leads, you can sell to local contractors.
In 2023, local businesses in the real world need more leads. With the local lead generation business model, you don't have property management issues or bad tenants. Instead, you're like a digital landlord. But once your lead generation website generates consistent leads, you make money every month on autopilot.
2. YouTube Channels & Social Media Accounts:
YouTube and social media accounts are free and allow you to access a virtual space with unrestricted organic reach. Expand awareness and breed a culture around your brand by filling a gap in the market or connecting with an audience that's overlooked. Use a YouTube Automation step-by-step guide to get industry hacks and best practice suggestions.
Then publish videos with virality potential without being salesy. The goal is to develop trust in your online real estate property. Create an asset that generates profits by being authentic. Share content people want to watch. According to Statista, there are more than 2.6 billion active users on YouTube as of 2023. And 4.76 billion people use social media. To get attention, offer something others aren't. For example, a free giveaway or timed contests.
So offer something to generate FOMO and initiate a buzz around your profile. The goal is to drive traffic to your content. But once you have a dedicated following, monetize your digital asset with affiliate links, Google AdSense, banner ads, or sponsored content. Then you can make money with your digital investment. Consider that YouTube videos are free to make. But a YouTuber with 100K subscribers can earn between $600-$1000/month.
3. Mobile Apps & Digital Products:
A few ways you can make money investing in digital real estate include apps and digital products, which are relatively cost-effective options. Costs for mobile app development are $0-$25,000+ depending on your tech skills. But design an app that meets a need with cool features like virtual reality or helps people save time. However, only 0.5% of apps ever see any profits. According to Statista, there are over 258 billion downloads of mobile apps.
The key is to build a virtual world like gaming or education. Then you improve your chances of long-term success. First develop a digital product people want to buy. Then it will sell over and over. But consider that the top 800 apps in the App Store make around $3500 a day, so if you can sell something that isn't being sold somewhere else. Or a product superior to what's currently on offer, you can generate revenue with your virtual property. Digital products, in contrast, are a much more cost-effective option.
First, create eBooks, PDFs, or online courses that sell well and have a high market demand. Of course, how much you make will depend on the price you list your product. But according to Growing Your Craft, selling printables on Etsy can yield profits of $100-$1000/week. Next, focus on building connections with your customers. Then provide the best customer experience possible. And increase the profitability of your digital assets.
4. Email Lists & Subscriptions:
Costs to build an email list are between $13-$37/month but plan on devoting 3-12 months to growing your email list. Then focus on creating attention-grabbing subject lines with a compelling hook. According to Marketing Sherpa, clear subject lines produce 541% more responses. The idea is to share value and build trust with your readers. Personalization is the secret sauce. So learn as much as you can about your target market. What are their problems? What do they search for online? Do they have a need that isn't being met elsewhere?
Studies suggest that 58% of revenue results from segmented and personalized emails. But if you're a real estate investor looking to capitalize on the virtual world, the subscription business model offers a ton of options. It's a $1.5 trillion economy. But your only issues are attrition and getting a steady stream of subscribers. First, provide the best customer experience possible. Then, create new angles and offers like a scaled pricing model or freemium options to keep existing patrons and attract new buyers.
Why Do People Buy Digital Real Estate?
People buy digital real estate because it's the future. DataReportal shows 5.16 billion people worldwide were using the internet at the start of this year. So in 2023, it's not a question of is digital real estate a scam. Tech is happening fast, and the time to take action is now. Virtual real estate saves time and is more efficient than physical real estate.
With traditional real estate investing, you need a minimum of $10,000 to invest. So you either have to take a loan from the bank or find investors. Digital real estate investing, on the other hand, costs nothing or has only minimal start-up costs. So you can save hundreds of thousands of dollars. Instead, you invest in content. It's free, and your content takes up space on the internet. The more room you take up, the more you win.
The key is to create scarcity by dominating search engines. Then enhance the perceived value of your digital asset by publishing content people are searching for right now. According to Broadband Search, Google processes over 3.5 billion searches every day. The supply of internet land is infinite, but the top spots are scarce. So it all goes back to attention. The goal of digital real estate investing for beginners is to make your virtual property for the right people. Be where things are happening and be where people want to go, and you own invaluable online assets.
How Does Digital Real Estate Make Money?
Digital real estate makes money when it's beneficial. Start by increasing your skills and talents and impacting people like sharing hyper-valuable content and leveraging local SEO tips for small businesses to get your websites to the top of the SERPs. The more people you teach, the more income will come: What do you have of value? What can you share with the people? For example,
The key to making money and how to buy digital real estate that becomes valuable is to focus on providing a solution. Data suggest that 2.14 billion of the world's population will buy online in 2023. Be where your people hang out online.
For example, Do they prefer videos on YouTube? Or do they spend their time online reading content? Like blogs or information found on local lead generation websites? Develop a digital marketing strategy to drive online traffic to your virtual land. When it gets attention, monetize it to generate cash flow. Or you can rent your space in the digital world and create passive income.
How Does Digital Real Estate Build Passive Income?
Digital real estate builds passive income by becoming valuable. Be willing to invest the time and effort. The idea is to increase the value proposition. Become an authority on an existing platform. Take this site, for example, www.grandrapidstree.com. I built this site in 2014, and it's been making me $2000/month for eight years:
- $2000 X 12 months = $24,000
- $24,000X 8 years = $192,000
The local lead generation business is profitable if you leverage the algorithms. I get paid on autopilot every month. Plus, now that this site is at the top of Google, I don't need to do much around ongoing maintenance. But this lead gen site is in front of a ton of eyeballs, gets attention from the right people, and is prime real estate.
What Are The Pros & Cons Of Digital Real Estate?
The pros and cons of digital real estate are similar to any business. First, decide what virtual property best suits your ideal customer and aligns with your skills. Then weigh the main pros and cons of digital real estate like:
A pro of a digital real estate investment is its accessibility. Because the Internet is global, you can reach people anywhere.
Flexibility is another pro of digital real estate. You can work when and where you want with an internet connection.
Portfolio diversification is a significant pro of digital real estate for real estate investors. As a result, there are fewer investment costs and fewer risks.
The future is digital, and this is a notable pro for digital real estate. According to Zippia, there are over 600,000 new internet users each day.
Failing to understand your audience is a con of digital real estate to be aware of. For example, how to start a digital real estate business that generates profits is all about knowing what people are searching for online.
Another con of digital real estate for investors is that it's unpredictable. Trends change fast, and you must stay ahead of the competition to make money online. And beware of cyber threats and hackers. Ensure you take the necessary steps to protect yourself and your investments.
Impersonal communication is a digital real estate con that's challenging to control. Your job is to provide the best user experience and customer journey possible. Lead with value, build trust, and promote engagement to help mitigate this issue.
5 Reasons Investing in Digital Real Estate is Worth It in 2023
1. Digital Real Estate Costs vs. Physical Real Estate Price Tag
The price tag is the most noteworthy difference between digital real estate and real estate investing. According to Zillow, the typical home value in the U.S. is about $280,000 and requires a down payment of 5%. Therefore, you'd need a minimum of $14,000. Then factor in associated costs like:
- 10% property management fees =$1500/month rental cost-$150 property manager
- .5 the gross annual rental income, excluding the mortgage and capital expenses (For example, if your rental property makes $18,000/year, operating expenses will be $9,000)
- 1% property taxes = approx. $2600/year
Digital real estate, in contrast, costs nothing or as little as $500. Start a YouTube channel or build a following of subscribers on social media for free. Then monetize your digital asset to earn money online.
Or adopt an online business model like local lead generation. Costs are about $500 to build and rank websites that get to the top of the SERPs. There are 41,683 ZIP codes in the USA. But each represents a local market with untapped potential. Choose the right niche in the right location, and you can earn $500-$2000/month per site.
2. The Breakdown Of ROIs-Traditional vs. Digital Real Estate
The average ROI for traditional real estate property is 10.6%. According to iProperty Management, an average single-family home in the USA has a net ROI of $10,637. Digital real estate profit margins, on the other hand, can be as high as 85%-90%.
Of course, you pay with your time. So pick a niche with an active online community. Or offer a product or service people are looking for right now. Then be ready to invest the effort to get attention and drive online traffic to your virtual property. According to Make Use Of, the average YouTube Automation channel earns .18 per view. 68% of this amount is from Google AdSense. So, for example, earning .12 for each view will make you $122 for 1000 views.
Another prospect is to rent websites that produce high-quality leads for small business owners. With lead generation, you act like a digital landlord but can earn 85%-90% profit margins. A well-optimized blog with a loyal audience is also an option. RYROB reports that blogs cost $40-$900 to design but can generate earnings of $38,440-$51,905.
3. The Time Element
The time it takes to make money with physical real estate depends on your investment strategy. Will you fix and flip for fast returns? Or would you prefer a long-term investment option like rentals or an Airbnb? Of course, your experience level, market fluctuation, and inflation are also factors to consider.
These factors determine how long it will take to recoup your deposit and start making money with your real estate investment. For example, make money in as little as six months if you plan to flip. But long-term rentals or Airbnb can take 3-5 years to generate a million-dollar net worth. So let's compare how long it takes to make money with popular digital real estate investments:
Local lead generation websites:
Lead generation can earn $500-$2000+/month in 6 weeks-6 months. But you can scale super fast once you understand the concept and automate your systems. (You're leveraging local SEO which is easier to rank for than at a national level). So it's possible to replace or exceed your full-time income in under a year.
You can make money as a blogger in 6 months and earn a full-time income in 24 months.
YouTubers can earn ad revenue after they reach 4000 watch hours and 1000 subscribers. But the best YouTube automation niches only take about 12 months to make money.
Social Media Profiles:
Accounts with a solid following that adopt social media marketing monetization tactics can make money in about 6 months.
But how fast you make money with digital real estate depends on your niche, value proposition, and ability to build a trusted audience.
4. Comparing The Risk Factors Of Investing In Physical vs. Virtual Assets
The risk factors of investing in physical versus digital assets are varied. But the most significant risk is financial. For example, if you invest $100,000 in a rental home and there is a hurricane, you could lose your investment. It will take time for insurance adjustors to process your claim. Then you need to either rebuild or relocate.
Likewise, digital real estate that doesn't offer valuable content won't generate profits. The key to making money with virtual assets is to improve them. So if you're not prepared to invest time and energy in building an online audience, you'll lose your investment.
Of course, there are other risks associated with traditional real estate. One is bad tenants. It can take 2 weeks to 3 months (or longer to evict a tenant). Plus, the landlord is responsible for all court costs (Which can average $3000+). Then factor in the additional loss of your rental income during that period. Or any other litigious costs associated with the eviction. Additional risks to consider are inflation, deflation, interest rates, market volatility, and economic recessions.
In 2023, there are a few pros and cons of digital real estate to consider. For example, virtual assets can face issues with cybersecurity or hackers. In addition, digital assets can become obsolete. Digital property that's not up to date on current trends. Or doesn't offer what people are actively searching for online won't make money.
Other risks to consider when investing in digital real estate include unforeseen taxes, legislation changes, and competition level.
5. The Opportunity Element
Physical real estate investing is all about location. Then factor in future development prospects, active listings, and current vacancies. Then it's a matter of attracting reliable tenants, paying property taxes, and finding a way to cover the price tag. You're competing against other investors who have more experience or got a better deal. Therefore, you could lose your investment or require substantial time to recoup.
In contrast, digital real estate is in demand now. According to Forbes, in 2023, there are 33.2 million small businesses in the USA. Consider that each one of those local business owners needs leads. So, in a business model like local lead generation, you build and rank generic websites that get to the top of the SERPs and produce leads. Then, rent your websites to the highest bidder and sell your leads for profit. You can build in any city or local lead generation niches you want. And without the headaches of bad tenants or massive investment costs.
The type of real estate investment you choose should align with your resources, skill set, and long-term goals. There are benefits and challenges to both options. Take the time to research and weigh the volatility risks. Then you can determine how you plan to generate stable cash flow and secure passive income with your investments.
Tips To Increase The Value Of Digital Real Estate
To increase the value of your digital real estate, you need to improve it. But if you're not sure how to consider investing in a digital real estate course. Then you get first-hand knowledge about the online real estate market. Popular tips to increase the value of digital real estate include:
Make money with lead generation:
Build micro-websites that get to the top of Google. First, focus on a specific service in the right location. Then use local SEO tactics like backlinks and citations. The local lead generation business model explained is all about the local market. You rank fast because your focus is local. Once you're at the top, your lead gen site is front and center for an audience actively searching for your offer. When your sites produce leads, you sell to a small business owner for a profit.
Use affiliate links on your blog:
Affiliate marketing needs a ton of online traffic. But you don't own inventory. Your only job is to drive people to promote other brands' products. Blogs with a loyal audience that get a steady stream of eyeballs can be monetized with affiliate links. Your goal is to get people to act on your recommendations. Connect with high-paying offers via affiliate programs like ClickBank. Then promote things that align with your existing readers.
Become an influencer on social media:
You only need 1000-10,000 followers to be a nano influencer. According to Search Engine Journal, nano influencers can earn as much as $114+ per Instagram post. But you need the right number of followers. Then be on point with current trends and have a genuine persona. Nano influencers are more cost-effective than micro influencers with better engagement. But this appeals to brands who want to expand their reach or connect with a new audience. And it's a chance to make money online.
Sell merch on YouTube channels:
Do you have 1000 subscribers? Creators who meet the platform criteria can sell merch. First, unlock the channel's merch shelf and live shopping features. Then design custom products like sweatshirts, T-shirts, and hats that gel with your audience. Showcase your merch under your videos. Or dedicate a video to your products and share links. The average YouTuber makes around $1000/month from merch. But it's a revenue stream you own and control.
Offer a paid membership for your mobile app:
Mobile apps are intellectual property you own. But you need to build an app people want to use. And one that isn't easy to find. Offer value and be better or different from the competition. Then create a buzz. Market your digital product on various channels before you launch. When your app starts selling, increase your profits with monetization tactics like in-app ads, sponsorships, or crowdfunding.