How to Invest in Digital Real Estate For Passive Income in 2022

Jun 13, 2022
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digital real estate

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A revolution is happening in the world of digital real estate investing!

In the next decade, businesses and individuals will continue to migrate to the internet. The digital world is growing at an alarming rate, and as a result, the market for virtual real estate is booming. If you're looking for a way to create passive income in 2022, investing in digital property is your best bet.

In this post, I'll do my best to explain what digital real estate is, and break down the different types of digital assets that produce passive income. You'll not want to skip this one, keep reading to learn more!

What is digital real estate?

Source: Quickenloans

So let's start off lightly by defining what digital real estate is (no it's not digital houses).

In short, it’s any online or digital property, or as I'd call it, digital assets that you own and have direct control over, and that can generate income by investing in it (both active and passive income). But there’s a little more to it than that.

For example, a website can definitely be seen as a piece of digital real estate which sits on the internet and works for you. You own it, can rent out ad space or sponsorship spots on it, or even sell it outright for a 30x markup of the monthly income! 

Let's say that you own a website that generates $3k per month in passive income, in most cases, you'll be able to sell it for around $90.000+ (this depends of course on the niche, buyers, market value, and more).

The same goes for domains, digital products, apps, marketing funnels, large email lists, social media audiences, and intellectual property. In fact, any online asset that can be monetized in one shape or another, at scale, is a form of digital real estate.

The massive benefits of investing in digital real estate

The benefits of digital real estate investing are so many, and I'll cover most of them below so you're well informed. But the most obvious one is earning passive income.

Whether you're looking for a stream of income that will replace your day job or just want to make a little extra money on the side, digital real estate investments are one of the best ways to do it. The internet is a global market and you can invest no matter where you live or what background you have, there are no restrictions on who can invest.

Digital assets are also very liquid, meaning they can either be scaled or sold quickly and at a good price if you need to cash out. And unlike the traditional stock market as your investment plan, when it takes a nosedive (and it will), people flock to other assets for stability and security. 

Just imagine having a few digital assets diversified and online, spinning along 24/7 entirely apart from the stock or real estate market, and making you money. That is the power of digital assets, but let's dive into the other benefits as well!

Extremely low startup costs

If you're looking for a way to invest in digital real estate for passive income, you're in luck. The barrier to entry is lower than ever, and you can get started for just a few hundred dollars. You can buy a website for a few hundred, create your own for even less, or purchase a domain for pennies. Once you have the website and domain name, you can start building it out and adding content for free.

Unlike physical real estate, there are no broker fees, massive down payments, or commissions to pay. And, if you're willing to put in the work, you can do most of the setup and maintenance yourself! This makes digital real estate investing relatively low-risk with potentially high returns.

Virtual real estate is the opposite of investing in traditional assets, you build it, get the money flowing in FIRST, and only after do you consider investing in it to scale.

High-profit margins at scale

Just think about it, a well-run website or blog can generate a profit margin of 70% or more with monetization methods such as affiliate marketing and sponsorships, while digital products can yield margins of up to 90%, which is unheard of in the sense of traditional investments and businesses!

Digital real estate tends to be quite scalable, a website or a blog that does well in terms of traffic and revenue can easily be sold for a large profit, while the digital products that are successful can are reproduced and sold multiple times over, you create it once and it pays for months and years with barely any overhead costs.

Tremendous income potential

The beauty with most digital real estate is that they offer tremendous income potential with very little up-front investment most of the time.

For example, once you have a website or blog set up, the only costs associated with maintaining it are the hosting and domain fees. Everything else—the content, the ads, the affiliate links—generates passive income.

Just to give you a rough idea of what is possible with digital assets:

  • A blog or website: $1k-100k per month

  • Digital products: $10k-300k per month

  • eCommerce: $5k-500k per month

In many cases, this income is substantial, especially if you have a large and engaged audience to drive sales consistently. There are many different types of digital assets that can produce passive income, so it's important to choose one or two that fit your skills and interests.

Relatively easy to manage

Depending on the type of digital asset and monetization methods, digital assets can be very hands-off and easy to manage and require little day-to-day upkeep once they are set up.

This is why digital marketers spend so much time creating digital funnels, workflows, and automated processes, once they are in place they run on autopilot.

 This makes digital real estate a perfect investment for those who want to earn passive income without a lot of hassle, just beware that there is always a huge upfront cost in terms of time and effort before the systems are in place.

Drawbacks of digital real estate and what you need to know

There are a few things you need to know before you buy digital real estate.

First, it's important to understand that as with any other investment, digital real estate comes with some inherent risk. You'll need to be comfortable with the idea of putting in large amounts of time and effort upfront, as well as dealing with volatility, it's not a paycheck! 

That said if you're prepared to hone the skillsets needed and prepared to put in the work and continuously learn new things, digital real estate is a great way to generate passive income.

The need for skills

One reason some people may be hesitant to invest in digital real estate is because of the skill required.

Unlike buying a property that you can simply rent out or leave to a property manager, you'll initially have to be hands-on in the beginning, especially with new investment areas like cryptocurrency which changes dramatically in a short amount of time.

This means learning new skills, building an audience, updating and adding new content, or working on the digital asset that you're building. You'll need to become comfortable with learning or creating on a regular basis.

You need to become a professional, making sure that whatever the asset that you're dealing with is top-notch. Websites and digital products may require some coding skills in order to set them up and customize them for your needs. Bitcoin and crypto require in-depth research and constant learning to minimize risk. 

The good news is that as with any other skill, you can learn it and improve it regardless of your past experience. Just understand that if you want to create life-changing money for example by investing in crypto, you'll need to become the best at it in order to be profitable. There is no such thing as easy and free money with zero effort in this world, especially with digital real estate.

Time and effort

The biggest drawback, by far, is the amount of time and effort it takes to acquire digital assets to start generating traffic and income.

You'll need to invest time in creating quality content, setting up your website or blog correctly, building a digital funnel with A/B split testing, recording videos for your online course and digital product, and building an audience on Twitter/YouTube or a large email list.

Please note that you don't need to do all of this at once, these are just examples of the digital real estate that exists! The number one mistake that 99% of people do (including me) is to be scattered all around and do a ton of things at once. You should only concentrate all your time and effort on one single digital asset class, and master it.

Unless you're prepared to put in the work, you won't see any results. Additionally, it's important to remember that online properties are constantly evolving and updating, so you'll need to be constantly on the lookout for new opportunities and make changes accordingly.

Volatility

While the growth prospects of a new and emerging digital market are undeniably lucrative, one potential drawback to keep in mind is volatility. The value of websites, cryptocurrency, and other digital real estate can rise and fall quickly, often for no discernible reason. 

Additionally, digital assets produce passive income only after a considerable upfront investment of either time or effort. So, it's important to do your due diligence and invest only in assets you believe will generate a good return on investment over time.

Different types of digital assets that produce income

By now you probably understand that there is massive upside potential to investing in digital real estate, virtual land, and assets, so what are there to choose from? I've covered some of the most lucrative already, but let's dive into the list of possibilities!

Websites and blogs

Websites and blogs are some of the most common digital real estate out there, it's your very own little real estate on the digital landscape called the internet!

In fact, it's not too hard to start your own website or blog these days. With a little bit of effort, you can create a site that publishes your writing, showcases your work, or sells your products. 

And if you can get it to rank in Google search results, you can start generating organic traffic and earning passive income from ads or affiliate commissions.

Video and written content

Content marketing is huge, it's everywhere and it's definitely digital real estate!

For example, if you have a huge library of hundreds of videos on your YouTube channel, they are being watched 24/7 around the globe, generating attention, views, clicks, and sales. Each and every piece of video is an asset. The only downside is that even though you create and own your videos, they are living in a space controlled by YouTube.

Writing content such as blog posts is more in your control, as no one can really shut down your website if they don't like it. The same thing is true for these assets, you own them, they exist online, and each piece of written article on a blog can be considered as a separate digital asset that works for you.

Generating organic traffic and sales through SEO and written content is huge, and that's why essentially every online business has a blog that spins in the background. 

Digital products and courses

Over the past few years, there has been a significant trend of individuals investing in digital products and courses, and as long as you learn the skill of marketing your products, selling courses are one of the best digital real estates that you can have. Many experts argue that this is the future of online passive income.

Digital products can include anything from online courses, programs, downloadable e-books, access to discord groups, and online coaching, you name it!

What's great about these products is that they often have a high perceived value and can be sold over and over again if they're not bound to you by time, such as 1-1 coaching. 

Apps

Apps are a great type of digital real estate that can produce passive income, most commonly through in-app purchases or advertising.

It's important to remember that apps require constant upkeep and updates to remain profitable, and there is a steep learning curve if you don't have the skills to build one yourself. Most people hire freelancers or companies to build apps for them, and that requires upfront capital and ongoing costs.

Social media accounts

Social media accounts are a type of digital real estate that can be used to create passive income. In fact, many social media stars and influencers make a great living by monetizing their social media accounts.

There are a few different ways to make money from social media accounts. You can sell the account outright once you build it up with an engaged and targeted audience, you can allow brands to promote their products or services on your account, or you can join an affiliate program and make a commission when someone buys a product or service as a result of clicking on your link.

The sky's the limit when it comes to monetizing social media accounts, so it's a great option for those looking to generate passive income.

Email lists

Email lists are one of the most valuable digital assets you can own! Marketing experts have long known the power of email lists, and online entrepreneurs have been able to capitalize on this by building massive email lists.

Why are email lists so powerful? For one, they are a direct line of communication with your customers. You can send them announcements, special offers, updates on your products or services, and more. Additionally, email subscribers are more likely to buy from you than people who don’t subscribe to your email list. This is because email subscribers have already expressed an interest in what you have to offer.

Building an email list is one of the most important things you can do for your business, a true and tested digital real estate.

Intellectual-property

Many people think of digital real estate as just websites, domains, and apps. However, there are many other types of digital assets that can produce passive income. One example is intellectual property.

This includes copyrighted material, such as ebooks, music, photographs, and more. It can also include trademarks, trade secrets, and patented inventions. When you create intellectual property, you are essentially giving people a royalty-free license to use it for their own purposes.

You can sell that license to others for a one-time fee or a more lucrative recurring revenue stream, such as every time someone plays your songs on Spotify or Soundcloud, you get paid!

Decentralized Finance (DeFi) and Cryptocurrencies (Bitcoin, Ethereum, or Altcoins)

Cryptocurrencies are digital or virtual tokens that use a network to secure transactions. Bitcoin, the first and most well-known cryptocurrency, was created in 2009.

Since then, a wide variety of cryptocurrencies, virtual land, virtual worlds, and all kinds of things have been developed, and there is a crazy amount of innovation that's being done by the minute.

Cryptocurrencies are decentralized, meaning they are not subject to government or financial institution control, which makes them an attractive investment for those looking to bypass traditional investment channels such as stocks and bonds.

Crypto is a heavy research and knowledge type of investment area, you need to stay on your feet when it comes to investing in DeFi as it moves and innovates quickly.

But the return on investment is huge, just consider 20% APY "low interest" in the crypto space, and we haven't even touched trading yet.

Non-Fungible Tokens (NFTs)

NFTs or Non-Fungible Tokens are a type of digital asset that is unique and cannot be replaced. In the context of digital real estate, because they are unique, NFTs can be used to create true digital scarcity and help to establish a market value for digital assets.

NFTs are created on blockchain platforms such as Ethereum or other chains and can be bought and sold on decentralized exchanges such as OpenSea.

eCommerce Stores

With the growth of online shopping and the ever-increasing popularity of eCommerce stores, this type of digital real estate is becoming more and more valuable.

If you have an eCommerce store, your "website" is an essential part of your business. Not only does it house all of your products and information, but it also serves as the online face of your company. There is a huge market for buying and selling already running eCommerce stores that generate revenue.

And as more and more people conduct their shopping online, having a well-designed and well-functioning eCommerce store is more important than ever. If you're looking to invest in digital real estate, an eCommerce store is a great place to start.

Publishing Ebooks

Ebooks are electronic books that can be read on a computer or electronic device such as a Kindle. They are often less expensive than traditional books and can be purchased online. Self-publishing is a lucrative business model and each and every piece of ebook that you publish becomes a digital real estate that you own the rights to and can sell indefinitely as long as there is a market for it.

The best part about this asset class is that once you've invested in a number of books, either by writing them yourself or hiring ghostwriters to produce them for you, you can leverage that asset into creating both physical books AND audiobooks from the same asset. Buy one, leverage into three.

Lead magnets

A lead magnet is a digital asset that entices visitors to provide their contact information in exchange for a valuable offer, such as an ebook, template, or coupon.

By acquiring the contact information of website visitors, you can build an email list and market to them over time. As an investor in digital real estate, you can use lead magnets to collect leads and build your own email list or generate leads for others.

How do I choose the right digital asset?

Not all digital assets are created equal. When you're looking to invest in digital real estate for passive income, it's important to do your research and choose the right asset. Here are some factors to consider:

  • The audience/market for the asset: Is the audience large and engaged?

  • The quality of the asset: Is it well-made and does it look professional?

  • The monetization strategy: How is the asset making money?

  • The potential for passive income: Can you realistically expect to earn passive income from the asset over time?

  • The risk and potential for return: What's the potential upside and downside?

When considering these factors, be sure to think long-term. Many of the best digital assets today will be even better in five or ten years. So choose wisely!

How much money do I need to invest in digital real estate?

How much money you will need to invest in digital real estate in order to see a return on that investment will depend on the type of asset you choose. However, most digital assets can be created relatively inexpensively, so even those with a limited budget can get started. There are a number of digital properties that can be purchased for $10 or less such as domain names. So, while the amount you invest will vary depending on the asset you choose, you don't need a lot of money to get started in the world of digital real estate.

The future of digital real estate

In the future, digital real estate will only become more and more valuable. Here are just a few reasons why:

  • As internet usage continues to grow, the demand for digital real estate will too.

  • Domain names are becoming shorter scarce, which means there is a higher demand for good domain names.

  • More people are buying online and spending more of their time on the internet.

  • As technology advances, new opportunities for digital real estate will present themselves.

  • Cryptocurrency and DeFi will explode in the near future

  • Metaverse is on the rise, and earning money through crypto gaming will become as common as going to a job.

Frequently asked questions

Can you make money from digital real estate?

Absolutely! In fact, many people are generating passive income through various types of digital real estate. The key is to find an investment that suits your needs and interests.

Who owns digital real estate?

Just like regular real estate, digital real estate can be owned by individuals, corporations, or partnerships. In many cases, the registrant of a domain name (the person or company who owns the web address) also owns the underlying website content.

How do I buy digital assets?

There are a few ways to buy digital assets. The first is to find a seller and purchase the asset directly from them. The second is to use an online marketplace to buy and sell digital assets. The third way is to invest in a company that specializes in digital real estate and allows you to own a share of their portfolio.

How long does it take to make a profit from your website?

It generally takes around 6-12 months to start making a profit from your website. In some cases, it may take longer if you’re starting with a brand new website, and in others, it may take shorter depending on how you monetize it.

However, there are a number of ways to speed up the process, including SEO, backlinks, paid advertising, and social media.

What Is the Metaverse?

The Metaverse is nothing new, originally it was proposed by Neal Stephenson in his 1992 science fiction novel Snow Crash as a virtual world. In the novel, the Metaverse is an electronic world that users can enter through virtual reality goggles.

We are not exactly there yet, but as Metaverse stands now you can see it as an evolution of the internet into Web3, or a shared network of economy, space, virtual land, and utilities that are decentralized, meaning no single entity owns anything but is propelled and verified by a network.

Wrap up

The digital world consists of different types of digital real estate and digital assets that you can either build or acquire. These assets produce passive income for the investors, and the returns are growing each year.

In order to invest in digital real estate, you need to understand the different types of assets and how to choose the right one for you. There are risks and rewards associated with any type of investment, but the potential for growth is high.

So far, the Metaverse has been the buzzword of the year and people are jumping headfirst into assets such as Bitcoin, Ethereum, and DeFi. This will only grow exponentially with time, and once it goes mainstream the good opportunities will have already passed.

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