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How To Start A Digital Real Estate Business: Is It The Best Way To Create Passive Income?

September 19, 2022

Digital assets are one of the best ways to generate a passive income. But how do they work? Are there benefits and risks? Plus, how much do you have to invest to get started?

In this article, we look closely at how digital real estate makes you money. We also dive into a few of the most popular types, including how to make money with digital real estate that generates leads for small businesses. And discuss why now is the ideal time to invest in virtual real estate.

What Is Digital Real Estate & How Does It Work?

Digital real estate is tangible 'land' in the virtual world. (Anything that exists online that has value). As a result, digital real estate investing is one of the most powerful passive incomes available. But it isn't that different from traditional real estate investing.

However, a digital real estate investment allows you to diversify your income stream. You can rent or sell your products or services online. But you need to focus where there's traffic. Use tools like a Google search or Keywords Everywhere to find popular search terms. Then ask the search engines what people are looking for, including:

Questions For The SERPs:

  • Where are the digital people hanging out?

  • What content can you publish to drive traffic to your virtual property?

  • How does your product or service solve a problem? (Concentrate on a pain point like health, love, or life).

  • Does it improve a person's life?

Digital real estate is the future of investing. Plus, as a new frontier, Web 3.0 offers a ton of growth potential and might be the best way to make a passive income in 2022

Is Digital Real Estate Legit?

Yes, digital real estate is legit. Digital real estate is virtual property you own. Once you make it worth something, it has the potential to produce multiple income streams. In addition, you have options like lead generation or selling digital products. So you don't need to rely solely on investing in things like Metaverse real estate, NFTs, or Bitcoin. Plus, by investing in digital real estate now, you can beat the curve and secure a passive income.

What Are The Benefits & Risks Of Digital Real Estate?

Benefits

Typically requires less upfront capital than physical real estate.

It offers a scalable way to invest in the digital future.

Allows you to have control over your investment with more customization.

Appreciates quickly and has the potential to make higher profit margins than traditional real estate investing.

Risks

Algorithms and market trends can be unpredictable. Plus, volatility remains a concern.

Requires specific skills you need to learn (or know) if you want to grow your assets.

Certain ventures will take longer to set up and build credibility before they're valuable.

Five Popular Types Of Digital Real Estate:

1. Lead Generation

First on our list and our number one recommendation is local lead generation. Lead generation (also referred to as rank and rent) is about building and ranking websites on Google. Each site is a digital property you own. The goal is to get your site to the top of the SERPs. Then get your GPB at the top of the 'map pack.' But because there are limited spots at the top. Once you rank your virtual property, it offers insane value to local business owners.

Advantages Of Lead Generation:

  • Straightforward to rank. (Because you're targeting local, not national, traffic).

  • Easy to sell to potential clients. (Because you're selling leads, not a service).

  • You own the assets.

  • Minimal client interactions.

  • Highly scalable. (These virtual properties don't take a ton of effort or maintenance. Plus, once you develop your processes, you can just rinse and repeat).

Because natural barriers limit the competition, you just need to research to find 'low-hanging fruit.' (A niche and location you can rank for with relative ease and speed) using a specific skill set. Which also acts as a barrier and helps to minimize market saturation. And this makes it extremely challenging for a competitor to duplicate your lead generation assets.

Plus, there are 41,683 ZIP codes in the USA. And each one represents a potential market for you to build your digital assets. So you can create lead gen sites. (Like the one shown below). In whatever niche and city you choose and from anywhere in the world. 

You can build as many lead generation properties as you want. But you don't need your website at the top search engines to sell your leads. As soon as you have a site producing leads, find a business owner currently using Google Ads. Then sell them your leads. (The key is to focus on local niche markets).

Plus, you can negotiate the price or payment structure. Business owners need leads to stay in business. So not only are you able to generate an income on autopilot. But you're helping local companies get their fair share of the market.

2. Social Media Assets

Social media channels offer an advantageous way to make money with digital real estate. With more than 4.26 billion users, projections suggest that number will grow to nearly 6 billion by 2027. But developing a social media platform requires patience and consistency.

Of course, you can purchase existing channels from sites like Fameswap and SocialTradia. But to build your own audience, you need to be an expert marketer and content creator. So you need to understand how to hook your viewer. 

  • How will you make them stop and take notice? 
  • What angle will you use to stand apart from the competition?
  • How will you get viewers to stay and watch/subscribe to your channel?

You need to share value and be current with trends. And have a clear call to action. 

A Few Popular Options Include:

  • Facebook-Create A Group, Offer Subscriptions

  • Instagram-Influencer, Sponsorships

  • YouTube-Memberships, Brand Partnerships, YouTube Shorts Fund

  • TikTok-Creator Funds

Once your social media channel has a substantial following, you can leverage it with other brands. For example, your business could include a variety of services and sponsorships. Or paid endorsements from business owners who want to get in front of your audience and promote their product or service.

3. Websites

Websites are one of the most lucrative digital real estate platforms available. You can purchase a new domain name from platforms like HostGator or Namecheap for around $10 or less. Or you can opt to buy an existing site on platforms like Flippa and Empire Flippers (from $100+). Then it's your job to optimize and create a valuable online entity. 

But you need to be an expert copywriter. And consistently publish high-quality copy with a unique angle. The goal is to become an authority and build trust with your target market. So you need to pick a topic you're passionate about. Or something you have a ton of knowledge around. Consider things like:

  • What topic interests you the most?

  • What's the level of competition in this niche? (use tools like SEMRush or Google Trends)

  • How will you make money with your website?

  • Do you have the time to invest before you begin generating a profit?

"70% of small business websites lack a Call to Action (CTA) on their homepage." Business2Community

You need to commit to the time to establish your digital real estate and drive online traffic to your property. But then you can monetize it with things like:

  • Affiliate Marketing Develop your digital real estate and position it in the search engines for high-traffic terms). Then you can rent out your site by adding affiliate links.
  • eCommerce Stores Your website acts like a digital storefront. It's how your customers find you, browse and shop for your products. Websites are one of the best ways to build your brand. But they can also be a highly profitable marketing channel.
  • Authority Blog Leverage display ads for brands like Google AdSense or AdThrive. You can also write sponsored product reviews, offer a service, or sell digital products.

Once your site ranks well in the SERPs, you can leverage your digital asset. Then you can build on an existing cash flow to secure additional income streams and even higher profits.

4. Email Lists

Building an email list may not be the most exciting online business. But consider this. If you have a niche-specific audience with whom you have created a trusting relationship. An audience that enjoys your curated content and views you as an authority in a specific market.

Then your email list becomes a direct line of communication with your customers. Plus, subscribers are more likely to purchase from you because they trust your recommendations. In addition, you now have the power to leverage your list in multiple ways. For example, you can monetize your list with things like:

How To Monetize Your Email List:

  • Integrate ads into your emails

  • Promote offers (your own or other businesses)

  • Create other resources you can sell (webinars, books, etc.)

  • Develop a paid newsletter

  • Host sponsorships

Emails are targeted and purposeful. They’re also one of the best ways to connect with your audience. As a result, email lists outperform other marketing techniques. In fact, according to HubSpot, 87% of B2B marketers state that email is one of their top distribution channels. Also, you don't need a giant list to rent your digital asset because your list has value. So it's worth the time and effort to create.

5. Digital Products & Software

The digital media products industry is worth almost $331 billion. Not only are they a way to diversify your income. But digital products usually have a high perceived value. Plus, once finished, you can sell them repeatedly. As a result, digital products have quickly become mainstream. A few popular options include:

  • eBooks & Online Courses
  • Streaming Movies & Video Games
  • Software & Apps
  • Music & Audio
  • Stock Photography & NFT Real Estate

You can sell digital products through a personal website. But you can also opt to sell on Marketplaces (like Udemy or Skillshare). Or leverage a ready-made audience on platforms like Etsy and Amazon.

How Much Money Do You Need To Start A Digital Real Estate Business?

How much money you need to start a digital real estate business will depend on your asset of choice. But digital real estate investing is significantly less than investing in the traditional real estate industry. So instead of spending hundreds of thousands of dollars on a single-dwelling home. You can purchase a domain for under $10. For example, local lead generation costs around $25/month, plus the cost of your domain. But that includes things like:

  • A tracking number ($15/month) lets you know how many leads your site generates.
  • Hosting fees ($10/month) because the website belongs to you.

Each lead gen site takes around 10-15 hours to build. (And then 6 weeks-6 months to rank).

Local lead generation

But once your websites are generating leads, you can take a piece of your monthly fee to cover any additional costs. And even if you buy an existing site or channel, your virtual assets will still cost less than purchasing physical real estate.

Plus, you can build out sites simultaneously. And there's no limit to how many digital properties you can own. Like the one pictured above that has been making me $2000/month since 2015. (And it's only one of my 60 virtual assets).

Why Is Digital Real Estate Valuable?

Digital real estate is valuable because people want it. It's an asset that increases in value over time and allows you to scale quickly. For example, the URL cars.com sold for $872 million. So starting a digital real estate business can build an online empire of virtual assets. And create a passive income.

In addition, investing in online real estate doesn't cost as much as physical property. But once your site offers value. (Like lead generation digital assets that deliver leads to small business owners). Then, you can sell it for even bigger payouts. As a result, virtual property is drastically changing how we transact in the real estate market. And now is the ideal time to start a digital real estate business.

Why Lead Generation Is The Best Way To Generate Passive Income From Your Virtual Property: 

Local lead generation is the best way to generate passive income from your virtual land because you can publish multiple sites and rank them simultaneously. (Some sites even get to the top of the SERPs less than 6 weeks). Every city is its own market. And you're not competing in a global market. (So you can rank your sites faster). 

Once you learn the skills, you need to manipulate SEO tactics and strategies. And get your digital property to the top of the search engines. You rely on organic traffic. (Which is more predictable and gives you more control over rankings). So you don't need to rely on paid ads. It might take longer to rank. But once it's at the top, it's more stable and cost-effective.

The lead generation business model is niche-specific. Plus, it's location-based. So it's not wide open or easy to copy. (Unlike other business models, including dropshipping or Amazon FBA). Therefore, the market isn't saturated. Plus, you own the site, and you control the calls. They're your leads.

Your digital real estate business has the potential to bring in 95% profit margin (and for a fraction of the cost when compared to physical real estate). You just need to find a small business owner who sees your service's value and sell your leads. Plus, unlike renting to tenants. If your business owner isn't the best fit, you can quickly pivot to the competition and continue to make a profit.

Conclusion:

The virtual real estate market is hot. And it's a new and exciting realm that offers a host of opportunities to make money online. But if you're serious about generating a passive income. Or if you're ready to diversify your portfolio. Then, starting a digital real estate business may be the best online business in 2022

Of course, it takes time to optimize your digital land. Plus, you need to learn the skills to monetize your digital product. But you can invest from anywhere in the world. And you can scale quickly for minimal investment. 

But starting a digital real estate business is a concrete way to get in on the action now (for minimal risk). Of course, you can still invest in NFTs, Bitcoin, Sandbox, or the Metaverse. But if you want to generate a passive income. Then starting a digital real estate business like a lead generation company is the best way to achieve your goal.

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Ippei Kanehara
Founder/CEO

$52K per month providing lead generation services to small businesses

Ippei.com is for digital hustlers, industry leaders and online business owners.

His #1 online business recommendation in 2022, is to build your own lead generation business.

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  1. Awesome post and information but does this still work? I've seen people talk about an update from google that would pretty much make things impossible to get a lead gen site on google business maps since they're requiring video verification. Maybe I'm wrong but that's my current understanding,

    1. Hey Anil! Great question and you’re 100% right that Google has been rolling out all kinds of updates. The good news is that, yes-absolutely local lead generation still works. In fact, it’s thriving. If you have other questions about lead gen or our program, feel free to book a call through this link: https://ippei.com Always happy to talk about the business model. I appreciate your comment-thanks for reading.

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