Looking for Advice About Buying and Eventually Selling Websites

NaiveTeen

Background:
I'm a Leaving Cert student. My plan is to study Computer Science in College next year. I'm not from a wealthy background. I'm trying to earn money now for college. I've been unable to secure a part time job (I live in a rural area that hasnt many opportunities!). I do have just over €2000 in savings. Over the past few weeks I have been looking at alternative ways of making money. What I am now considering doing is buying a website, make some money off it between now and next summer through Adsense, and then sell it on again before I start college.

Where I am right now:
I have found a website for sale at a price of €1450. Its a niche forum and is ranking well organically. Revenue is generated from Adsense. And it's currently making about €130 per month. I have verified Adsense figures. I have also been given read access to the site analytics so I've verified that also. Here is what I am thinking. If, for example I held onto the site for 8 months I could possible earn about €1000. And then sell the site on again to get my original investment back. Also its a niche area that I do know and I have started learning about SEO so there is a chance I could get more traffic and increase the site value a small bit.

What am I missing?
I suppose this is why Im coming here for help. Im not afraid to admit I dont know much about business. But I figure the best way to learn is with a hands on approach. But could anyone here tell me am I missing any obvious risks/issues/threats with the above plan? I know there is risk involved. I know its not a guareented money making idea or else everyone would be doing it! Also I dont know much about taxes etc so I'm not sure what would happen in that regard with my monthly revenue and with the money from the eventual sale of the site.

So as you can see I could use some guidence and I'd very much appreciate it if people here were able to help! Thanks.

satguy

Do you have an Adsense account, as if you buy the forum the owner will have to remove his Adsense.

NaiveTeen

satguy wrote: »

Do you have an Adsense account, as if you buy the forum the owner will have to remove his Adsense.

Yes, I have both an Adsense and Analytics account with Google.

satguy

Forums can be great earners if the have good traffic.

The headers and footers can be used for banner sales as well as your adsense. Also a handy way to circumvent adblockers.
As you can self host third party banners on your own hosting account.

Just be careful as Google have lots of rules if your site is running Adsense.

Back in the day when I ran a forum, selling good traffic was a big earner for me,, not sure if it still is these days.

G-Man

Where do you find websites for sale and how do you go about analysing them.. How much is verifiable before the owner will let you look at the bookks / logs?

listermint

I'm struggling to understand your objective being to make money but buying the site and selling it at a loss or the same money you invested.


Where is the making money in this scenario..

Pintman Paddy Losty

listermint wrote: »

I'm struggling to understand your objective being to make money but buying the site and selling it at a loss or the same money you invested.


Where is the making money in this scenario..

The income of 130 a month over the year I would presume.

listermint

Pintman Paddy Losty wrote: »

The income of 130 a month over the year I would presume.

He said he'd sell it after 8 months.

Where's the money making in this. The profit is non existent if the plan is savings for college..

Snotty

Niche forums can loose traffic very quickly and without warning, suddenly a popular poster leaves, or an argument splits some of the established member groups causing a toxic atmosphere, anything like this and your revenue goes and resale is worthless.
Not saying you shouldn't take it on, but just like any speculation, be prepared that losing your whole investment is possible.
Lastly ensure you have 100% discovery for the sites infrastructure and get access to any ancillary accounts, like the forums twitter account etc

Pintman Paddy Losty

listermint wrote: »

He said he'd sell it after 8 months.

Where's the money making in this. The profit is non existent if the plan is savings for college..

But site for 1450

Earn 8×150 = 1200 (minus whatever costs of running the website

Sell site for 1450 (or more if he manages to increase the traffic as planned)

Profit is the earnings in between.

Obviously there's lots of issues - mainly concerning if he'd manage to increase the traffic or sell the website for the same price or more than he bought it for.

I would have thought the premise itself was quite straightforward.

fritzelly

If its making that much money just from adze sé then you should be asking yourself the question why is he selling it,?
How much time is involved in maintaining that amount?
I would suspect that within a month of you taking I've the store that you are spending a lot of time running the site or your revenue drops off a cliff

Mrs OBumble

The best advice I've had about AdSense is to consider it as a revenue stream, rather than a business model.

This is because you don't have much control over some very significant factors associated with it: you could lose your revenue overnight if the forum got hacked or Google took a dislike to your site or someone started click-bombing it, or advertisers cut their spending.

That said, I've been using it for a few years, and have only faced an incident like that once - my revenue took a dive for a few months while I took ads off that site until the problem was sorted at the hosting end. It pays my health insurance and a few bit and pieces.

The other thing about it is, that on-line advertising has been in revenue decline for years. This is clearly serious for Google - the on-by-default changes they're making with AutoAds at the moment are quite dramatic. Personally I've had some record months this year for Adsense revenue - but some later months when it was well below last year's average, too.

Some things that people do to mitigate the risks include:
Having multiple websites (unlikely you'll lose revenue from all at once)
Offer direct banner advertising sales (this is a lot of work, and IMHO fixed ads lead to ad-blindness very quickly ... but in some niches it is useful).
Use a mailing list and social-media presence as a way to drive traffic (but be careful with the latter for a forum - it may just suck traffic away)
Affiliate sales from other programmes (depending on what's in your niche - most people find that banner ads don't work nearly as well as embedded sales links - but they can be effective).
Sales of your own products (e-books, courses, artwork, etc).

There are are lots of other ideas which are variations on these, too.

But they all take time, which is something you may not have.



Overall, I wouldn't say not to do it - because it might just work. But I would look carefully at how much revenue-generating traffic comes from search leading to old posts, vs direct traffic to new posts: if the latter is the main revenue source, it's one more thing that could go wrong.

NaiveTeen

Thanks for all the feedback so far everyone. I suppose one thing I should have mentioned is that I am familar with Adsense and running a website. I previously created a website and ran ads on it just to get familar with all the tools involved in running websites.

The thread was moreso to get feedback on my idea of basically treating buying a website like buying shares or any sort of investment. I'd get a steady return over time and then hopefully sell them on for a similar if not greater price than what I originally paid.

Also taxes is an area I'd be very weak in right now. Would I have to pay a significant amount when I'd eventually sell the website?

boring accountant

NaiveTeen wrote: »

Also taxes is an area I'd be very weak in right now. Would I have to pay a significant amount when I'd eventually sell the website?

There is an annual threshold for Capital Gains Tax of €1,270, meaning (in simple terms) if you sold it for less than €1,270 above what you paid for it there is no CGT.


The answer is probably not.


Depending on how much you make in ad revenues you may have to submit a tax return for non-PAYE income. Based off the figures you've given you fall way below the threshold.

mneylon

NaiveTeen wrote: »

The thread was moreso to get feedback on my idea of basically treating buying a website like buying shares or any sort of investment. I'd get a steady return over time and then hopefully sell them on for a similar if not greater price than what I originally paid.

The problem with websites, as others have pointed out, is that they can lose any value they might have quite unpredictably.
Conversely they can also gain traffic, earnings etc.,

Unless a site is nurtured then it's unlikely to "magically" give you a revenue stream without you working on it.