What’s Your Online Real Estate Business Worth?
How much is your online real estate business really worth?
Why is paying attention to the value of your online real estate business and website so important? How can you figure out how much it is worth? More importantly, how can you increase its value?
Most real estate investors focus on the bricks and mortar. Most see their websites and online activities as an extension of their marketing. They could be missing out on a lot of wealth building.
Why Building Value Online is so Important
Ignoring the value of an online real estate platform is essentially throwing away money. You will be missing out on too many opportunities if you neglect to optimize your online presence.
According to a new report from Digital Exits, which reveals an array of metrics from a study of over 250 business sales online, businesses are actually selling for more than offline businesses! Online businesses and real estate websites can have tremendous value. Better yet, they can be an easy way to increase income and build wealth almost passively. That means a huge ROI on time and money invested online.
A website and real estate blog can generate income by itself and become a great revenue source that compliments bricks and mortar transactions. This can be invaluable for helping industry professionals and investors stay solvent and profitable when the unexpected happens.
It also provides a parachute for the day someone decides to get out of the business, potentially adding six or seven figure assets which can be sold off. This may be even more important when it comes to leaving an inheritance. For a variety of reasons, many heirs may not want to manage a real estate business, even if it is well automated.
What Makes an Online Real Estate Business Valuable?
The comparable sales method can sometimes be used. However, it may be easier to measure the worth of an online company using the multiple income approach, similar to how stocks are analyzed and income investment properties are appraised.
According to the Digital Exits’ study, the average sale price of an internet company for the two years up to 2013 was $514,725. This represented an average multiple of 2.43 times earnings.
However, there are other factors to take into consideration, each of which can increase or decrease the attractiveness of a web asset and the price willing to be paid for it.
The survey shows a significant difference in the types of revenue models. For example; ecommerce sites came out on top versus lead generation sites at the bottom, with apps in the middle.
Perhaps the next most significant factor besides an established track record is operation complexity. Is this a turnkey operation which will run itself? Can it be run in a couple of hours of management time a month? Will it require extensive business and technical knowledge to be relevant for someone else?
Uniqueness matters! Is your site able to be replicated for a couple hundred dollars or is it unique with a brand position that was built from the ground up?
How to Make Your Online Real Estate Business More Valuable?
- Build income
- Streamline operations
- Build a strong brand
- Diversify income sources
- Keep great records
- Stay ahead of coming ecommerce pivots