As a domain investor, I believe you are looking for (1) asymmetric returns -- low risk, high reward, and (2) recurring/projectable income.
There are many domain investors who will advocate for short .COM domains. If you can afford those and can get an attractive price, great, but odds are that the obvious domain categories are thoroughly picked over. You can get lucky where a domain is temporarily underpriced but this is the exception.
Product category names and SEO names were once useful when search engines including the domain name in their rank algorithms. Many domain investors remember those days very fondly and some of us made out like bandits through mass development. The good old days...
These days, I see the greatest opportunities in three areas:
- Brandable domains -- names that are clever brand names, typically .com, that can be patiently held until the logical acquirer comes along. Pricing for such domains can be 4, 5 or even 6 figures if you have courage and patience.
- Trend domains -- if you are one that is plugged into trends and culture, you can often spot domains that should be registered but are not registered yet. These domains can have a short shelf-life. A good example was crypto domains in 2017.
- Traffic domains -- if you have a scalable strategy for monetizing traffic, you can build a nice business here. Unfortunately much of this business is now malware distribution so you might not want to be complicit in that arena.
If you can find a niche that leverages some personal competency or passion, you are more likely to spot the gems, proactively dump the junk and be able to sell names for high prices. My personal niche is probably brandable domains, perhaps because of spending 9 years at P&G and speaking a few languages. I routinely see 5 figure domain sales that I know cost the registrant peanuts, and which later on got sold for 5 and 6 figures because some folks in a Board room fell in love with it and some C-level Executive has a mandate to go get the .COM. It happens all the time.
In terms of monetization, the trend that I find most encouraging is domain leasing. You can have high asking prices for your domains, and if the buyer balks, you give them a lease and sell it to them later. If you don't know about domain leasing yet, I believe Epik is still the industry leader. Here is the ho
w-to article for leasing on Epik. As a general guide, I would price a lease at say 1% of the purchase price, e.g. a $1000 domain might lease for $10 per month. The result is (1) recurring income from monthly lease income, and (2) periodic windfall sales from leases getting bought out.
Hope that helps.