Elliot Silver： a seasoned domain investor and advocate of lease-to-own (LTO) sales, has shed light on how he determines the appropriate LTO length for his domain name inventory. While platforms like Dan.com and Afternic have streamlined the LTO process, Silver remains mindful of the risks and tailors each deal based on several key factors.
Here’s a breakdown of his approach:
1. Risk Tolerance:
Silver limits or shortens LTO terms for domains linked to high-risk sectors like gambling, crypto, and finance. He also applies shorter payment plans to edgy or controversial names to reduce potential issues down the line.
2. Trend Domains:
For domains tied to short-lived trends, he enforces shorter LTO deals. The logic is simple: if a domain rides the wave of a fleeting trend, it should be paid off before interest fades and the domain value drops.
3. Acquisition Cost:
Domains that required higher upfront investment receive shorter LTO terms to ensure faster returns. While not tied directly to accounting, this strategy helps maximize ROI efficiency.
4. Domain Value & Price:
To avoid managing tiny monthly payments for years, Silver caps LTO terms based on domain pricing. Names under $2,000 usually get a 12-month cap, while those under $5,000 may go up to 24 months.
5. 36-Month Ceiling:
Except for domains valued in the six or seven figures, Silver sets a 36-month maximum for most LTO deals. He sees longer terms as a red flag—if a buyer can’t pay off a five-figure domain in three years, the business model might be flawed.
While some platforms recommend 60-month LTO terms, likely to entice buyers and generate recurring revenue, Silver prefers not to commit to such lengthy agreements without a robust, custom contract that protects the seller.
His strategy blends financial pragmatism with risk assessment, offering valuable insights for domain investors considering LTO as part of their sales strategy.
News Source:domaininvesting，This article does not represent our position.
