While there are a lot of articles on buying domains (whether brandable or aged), there’s a lot less information on the practice of renting a domain name. Many people aren’t aware this is even an option.
Why rent a domain name? Wouldn’t buying one make a lot more sense?
In many cases, the answer is yes, but domain rental services exist because there are some times where renting a domain has some advantages to purchasing one. When is renting a good idea versus buying?
Let’s jump in!
What is Domain Renting?
Domain renting, sometimes referred to as domain leasing, is when a domain leasing company (lessor) allows an individual or company (lessee) the right to use a domain that the lessor owns. The payments might be done by month, groups of months, or even yearly depending on the contract.
While the renter doesn’t own the domain, though rent-to-own leases can be arranged in some cases, this does allow them to use the domain while under contract.
This practice was much more common around the 2010-2015 time period as a clear shift took place towards buying premium domains. Keep in mind that one of the best sets of linked resources (found here) on domain rental from GoDaddy is most recently dated 2015.
That’s one of the more recent resources, too. Many of the companies that directly specialized in renting domain names disappeared around that time.
While the majority of larger resources might be gone because the practice became less popular, domain name rental is still a viable option in some cases.
Buying vs Leasing a Domain: Pros and Cons
Domain leasing isn’t mentioned nearly as much as buying domains. It’s far less common, and many assume that buying just makes more sense. Most of the time, that’s probably true.
There are benefits to buying instead of renting, but that doesn’t mean renting doesn’t have its advantages in the right situation!
One of the major ones is avoiding potential legal liability. If it turns out the website or business name has a trademark issue, who’s in trouble? The legal issues are, in most cases, with the domain name owner – not the renter who built a site on the domain.
That’s a little extra layer of protection while a website owner can figure out a Plan B.
Other positives include flexible contracts. Domains must be bought in year increments. The minimum contract is one year. With a rental deal, the renter can walk away after a few months, if they believe that to be the best move.
Finally, on the positive side renting can be a way to get access to a premium domain name too expensive to buy.
If the domain name goes to a parked page, contacting the owners might allow you to negotiate a rental deal where what you’re paying is more than they make from ads while the domain is parked. That can potentially be a win-win as long as the domain name doesn’t sell.
There are cons to renting a domain name.
For one, ownership means control. When you own the domain you control it. You profit when links are built to the domain, and options like flipping the site or selling the domain name can only be done if you own the domain.
Ownership also eliminates the worry of the owner just taking down a site or selling the domain out from under you while you’re renting it.
Pros
- Avoid potential legal liability
- More flexibility for dropping domain name contract (not locked into one or more years)
- Can be an option for using a premium domain you couldn’t afford to straight-up buy
Cons
- No ownership over the domain
- Links built to the site profit the domain name owner
- If your business takes off, buying the domain might become very expensive
- Less control since the owner can use the domain as he/she sees fit
Why Should You Rent a Domain Name?
When is renting a domain name the best option? There are a few common situations that come into play when renting might be the better plan compared to buying upfront.
Liability Issues
First off, it’s always important to do due diligence before settling on a business name. That said, it’s possible to make a mistake or miss some important information. If liability issues are a potential concern, renting offers an extra layer of protection.
Keep in mind this isn’t always obvious. This article describes one company with a reputation for going after many small businesses with ridiculous trademark claims. Even when those claims are dismissed, lawyers cost money.
Renting can be a way to test the waters for unforeseen trademark claims against a domain name without being the owner on the hook for it.
Access to a Brandable Domain Otherwise Outside Your Budget
Many brandable domain names are on sale or display a landing page offering the domain name for sale with a couple of ads.
The price being asked for this domain could be out of budget, especially for someone bootstrapping it. Contacting the domain name owner offering a rental deal could be a way to get use out of the domain name that is too expensive to buy on a bootstrap budget.
Setting Up a Rent-To-Own Deal
The best situation for renting a domain name is setting up a rent-to-own lease deal. This starts with the above idea, but with a contract that sets up a time to buy in the future or at least provides you with the first option for buying or the ability to match an offer made down the line.
This gets the best of both worlds by allowing you to start building your online business while getting first shot at buying it down the line when cash flow is better.
Where Can You Rent Out Domain Names?
There are limited ways to rent a domain name. There isn’t one single place to go to rent out domain names, but these are the best options out of the ones that exist.
Private Outreach
If a particular domain name is catching your interest, reaching out directly can be one of the best methods. If there is no contact information up, use the WhoIs Tool to see if you can get the contact information of the domain owner.
As long as they didn’t purchase privacy with the domain this will work. If not, look around to see if you can find the domain for sale on any marketplace and see if you can get contact information from there.
If you’re interested in renting out your own domain names, having a microsite or a message on the domain stating it is available for rent is the way to go. This at least lets those looking to rent your domain that the option is there.
Search Marketplace Listings for the words “For Rent”
This is one of the best ways that lessors/lessees can connect. This involves listing domain names in marketplaces where domains are commonly sold. Look for the words “Also for rent” in the listings.
This is also an excellent way to gauge any potential interest from individuals who might want to rent one of your unused domain names.
Some of the most popular domain marketplaces:
This is one of the major ways to find a domain rental deal with many of the larger domain rental services sites from years ago no longer active.
Rentstant
Rentstant is a site that has several hundred domains up for rent. This seems to be one of the larger collections of domains up for rental that isn’t owned by a private domain seller.
Most results in Google from “Domains for rent” go to pages that actually only have them for sale. Rentstant is a notable exception.
How Much Does It Cost to Rent a Domain Name?
This is going to vary on a case-by-case basis. There isn’t a standard for this, which is why negotiations with the owner are critical in coming up with a fair price.
Buying a brand new domain is normally $10-20 a year, while premium domains can be hundreds or thousands of dollars to actually buy.
If you’re looking to rent a domain name that is making money from ads on a landing page, it will likely take an amount well above the ad revenue to get an agreement.
Always negotiate the price to see what type of a deal you can get on a domain rental.
Actionable Takeaways
Domain name rentals aren’t going to be right for everyone, but in certain situations, there could be advantages to considering this less conventional approach.
If you’re trying to decide if domain rentals are the way to go:
- Consider if the pros outweigh the cons for renting vs buying in your situation
- Look for specific domains that are owned but don’t have an active site on them
- Comb the marketplaces for names on sale and reach out to the owner to ask about renting or leasing
- Get any contract in writing, make sure to be clear on all terms
Follow the information provided in this article and any domain name rental experience you try out will be likely to go much smoother.
