"Is it really possible to make money by registering new domains and then reselling them?"

The answer is a definite and resounding yes. The Daily Domainer knows of many domains that were freshly registered in 2005 or 2006 and later sold for thousands of dollars. And DomainRookie just had an article on how he sold seven hand-registered domains for $5,240.

Below you will find our Top 15 Tips For Registering Valuable Domains For Resale Profits.

1. Know who your buyers are. You are registering domains to sell them, not because you like them or because you believe you might use them yourself in the future (when you finally have some time). Don't register a domain if there aren't at least 5 to 10 different individuals or companies out there who you can clearly envision paying $500 or more for the domain. Registering anything else is usually a waste of time and money.
2. Aim for the sky, but be realistic. There are many excellent domains still available that would be perfect for a blog or vanity site. However, most of the potential prospects for these domains aren't going to pay $500 or even $100… they will simply pick a different domain that's still available. The same applies to the myriad of "brandable" but meaningless fantasy names which are frequently offered on domainer forums but rarely sold for any meaningful price.
3. Limit registrations to one year only. If you can't sell a domain within one year it might not be worth as much as you think. Once the first year is over, consider carefully whether a domain is worth renewing.
4. Spread out your registrations over several weeks. Don't make the mistake of investing your entire budget the first day. You'll inevitably register many worthless domains! Choosing domains for resale is a creative and thought-intensive process. Your mind needs to be fresh and your thoughts need to be clear. Also, you become more experienced every day.
5. Be selective and choose wisely. As soon as you have created a list of domains you feel you absolutely "must" register, pick the top 20% domains from the list and discard the others. Then, use a domain registrar that allows you to return unwanted domains for a refund within 5 days. Make ample use of that possibility; many domains lose their appeal after a few days and you will wonder why you registered them in the first place.
6. Stick to .com domains only. They are vastly superior in value (worth 5 to 10 times as much) compared to most other extensions. Many buyers are looking for .com domains only and you will lose many prospects if you own any other extension. (There are some exceptions to the rule. Several domainers specialize in country domains and a few of them make quite a good profit.)
7. Don't use any numbers in your domain. They devalue it massively. (Exception: 3 number .com domains such as 101.com or 777.com, and 4 number .com domains related to years, such as 2007.com, 2008.com etc., but all of those are taken already!)
8. Don't use hyphens (-). They used to be somewhat popular in the 1990s, but nowadays they are considered to devalue a domain. The general assumption is that domains with hyphens lose lots of traffic to the equivalent domain without the hyphen. For example, if we had registered Daily-Domainer.com instead of DailyDomainer.com, the former would lose some traffic to the latter.
9. Don't register typos for resale. It's very difficult to sell a typo domain unless it has a lot of traffic. If it has no traffic and you try to sell it to other domainers without providing detailed traffic stats, most of them will (probably rightly) assume that the domain has no traffic. Also, if you offer a trademark typo for resale you might attract unwanted attention from the trademark owner. It's not worth it.
10. Develop a feeling for what the market wants. Check out domainer forums, completed domain auctions on eBay, DNJournal, the "recent sales" statistics on Afternic.com and Sedo.com, as well as the Daily Domainer's reports on recent domain sales to see how much money other domains are selling for, and what kind of domains buyers are looking for.
11. Employ your subconscious mind. Before you go to sleep at night, focus your thoughts on domaining and ask your subconscious mind to provide you with inspiration. You might wake up with a surprisingly good idea for a domain that is still available.
12. Use affirmations. Tell yourself over and over that you immediately recognize valuable candidates for registration when you go through lists of available domains. After a few weeks of practice you will be able to quickly scroll through domain lists and the most valuable domains will appear to literally jump off the screen.
13. Don't get too greedy. If someone makes you an offer for $1,000, try to get $5,000, but if the buyer doesn't increase his offer, take the $1,000. Where else can you turn $6.95 into $1,000? (Tyler Cruz just wrote a great article on why people overprice domains.)
14. Reinvest your profits into new domains, and eventually into long-term income sources such as generic domains or active websites. Of course, if all you want is to make a few hundred dollars extra, you can achieve that goal even if you repeatedly consume most of your profits each month. But many domainers have become millionaires by aiming high and repeatedly reinvesting most if not all of their returns.
15. Read between the lines. Most domain millionaires (with a few notable exceptions) rarely talk about their success nor will they share their real secrets for fear of competition. As you gain experience you will develop your own proprietary strategies and increase your potential of making more money than you dreamed possible.