Domain Investing ROI
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Domain investing ROI (Return on Investment) measures the financial efficiency of a domain or portfolio, calculated as net profit divided by total cost (acquisition price plus [[domain-holding-cost|holding costs]]), expressed as a percentage. Because domain investments can take months or years to realise, annualised ROI is the more meaningful metric, factoring in the time-weighted cost of capital and foregone alternative investments. Investors track portfolio-level ROI alongside per-name figures, since a handful of high-value [[end-user-sale|end-user sales]] typically subsidise a much larger inventory of slower-moving names. Parking and rental income can also meaningfully improve annualised returns.
Example
An investor buys a domain for $500, pays $80 in renewal fees over two years, then sells it for $3,200. Total cost: $580; net profit: $2,620; ROI: 452% (226% annualised).