Any downside leasing domain names?

[Varchar]

I have a client who is interested in a domain name that I have for sale. However, he couldn't affort to pay my full asking price. I want to offer him an option to buy while leasing the domain name. Is there any downside doing it this way? I ask him to pay $1200 for the first year and I will immediately change the dns to where he wishes. Then every year he will have to pay $1200 and whenever he pays off the difference, I will immediately transfer the domain to his ownership.

I want to make sure that I am aware all the potential problems that might arise. Anyone has any contract similar to what I am trying to do here? Thanks.

 

[mark]

a good article on this subject is here:
http://www.ivanhoffman.com/lease.html

 

[JEsports]

"Leasing" is great ... when you use the term for leasing out a domain while you keep the ownership of it. This can be a great and profitable option.

"Renting to Own" sucks ... because you have entered into a legally binding agreement with the buyer in which he pays you a certain amount of money per month/year until it is paid off, in which he is the owner. The major factor in this is when a big player comes along and wants to buy the domain from you for 5 times as much as the current "renter to own" offered. You would not be entilted to do so because of your previous agreement.

 

[Varchar]

Thanks Mark. It is a very useful article!

I don't really know if the buyer might be interested in the options I purposed. I do think leasing is better than rent to own, however, I do think that buyer will be more interested to own it eventually.

Have anyone try to lease a domain to other party before? How long was the lease or rental term?

 

[Jeanco]

What you might want to do is not offer the rent-to-own, but rather offer leasing at a lower price... something like $300 per year.

The upside to this is that as he develops the website and builds a business around it he will become attached to the name and you can up the buying price in a few years (or up the per month lease).

 

[Varchar]

Well, the interested buyer has a pretty establish company. I can see it from his current website. However, he claims that he can only affort to spend no more than $1000. Can he actually write off the lease monthly if I offer him the lease option?

I do think that the name has some potential because I found a number of companies which uses that name to incorporate. (No trade-mark issue though). I would actually perfer to lease than letting him to rent to own. Problem is, I need ca$h now...

Thanks.

 

[Jeanco]

Well, the interested buyer has a pretty establish company. I can see it from his current website. However, he claims that he can only affort to spend no more than $1000. Can he actually write off the lease monthly if I offer him the lease option?

I do think that the name has some potential because I found a number of companies which uses that name to incorporate. (No trade-mark issue though). I would actually perfer to lease than letting him to rent to own. Problem is, I need ca$h now...

Thanks.

Those are questions you'd have to ask him. May I ask what the domain is? For now, I'd offer him leasing at $75 per month or something like that... might be some nice long-term recurring income. Plus, if you ever get an offer for it then you'll have a guaranteed two parties interested - you should get a premium.

 

[Varchar]

Thanks. The buyer chosen to buy the domain instead of leasing. But I might consider leasing my other domains. I did go online and try to search for info, I read something like people who rent out domain name and the renter somehow got Google banned the domain. Is that possible?