The Similarities Between the Internet and Real Estate

The more I engross myself in the Internet, the more I find the parallel traits that exist between it and real estate.

1. The Planning

The whole construction process of a web property is analogous to the construction of a property. The two require careful planning in a number of categories such as location, costs, time-frame and so forth.

A. Domain Name = Land

The domain name is pretty much the land of a real estate project. The land represents the object that contains everything that will be created. A piece of land could have many different types of buildings and structures make an appearance on the lot during the lifespan of that piece of land. The same can be said about a domain name. A web site may be designed over and over again. It may change owners for a certain price. It may even undergo an entirely new direction based off the new management.

A short, easy to remember .com domain is pretty much a luxury lot in the heart of Hollywood. This is the cream of the crop and the best type of domain/land to get your hands on. A longer .com domain name may be good but is no longer in Hollywood. As you start getting longer and harder to remember names you work your way to less popular real estate areas. As you move to lower valued areas you start to find .nets and .orgs. As you move your way out you may experience some good short names on .nets and .orgs even and despite their less valuable TLD (Top Level Domain), they may hit just as a certain location of real estate may hit. As you work your way down to .biz and .info and start throwing in hyphens you are now traveling in the ghetto. This territory is generally not very desirable or valuable. A smart real estate developer usually avoids the ghetto!

Location based TLDs

Some domain name TLDs will determine where your property is geographically. For example, a .co.uk may be located in the UK while a .ca may be located in Canada. Just as certain pieces of land have specific geographic locations, so do domains!

B. Site Type = Property Zoning

Each site also has its own type of zoning.

Residential

A residential web site would be a typical informational site based on a small niche. As a niche grows broader so does size of the residential community.

Commercial

A commercial web site would be an ecommerce storefront, a lead generator or some type of brochure site acting as a sales tool. These are the sites looking to make money commercially in some way or another. The main purpose of the website is first and foremost to extract money from a user.

Industrial

An industrial web site would be something that serves as a tool or program that automates something.

2. The Construction

A. Server = Supplies

B. Web Design = Architecture

The design of a site is basically the architecture of the piece of real estate. There are many conscious usability questions that are answered when designing the architecture for a home and the same can be said about a web property. Let's take something like a room for instance. Each room may be parallel to that of section on a web site. Each section has its own feel and it's own content, just as each room does. The doors would be the main navigation that connects everything together. You get from one location to another via the doors or navigation. While the design of the doors may change and the handle might look different on some, you are always going to recognize a door by its action, just as you recognize a link by its action.

Web Draft = Blue Print

Any sample designs or ideas created by a web designer would be the blue prints. You would go through and rework the blue prints of the design and make sure everything makes sense before actually laying the foundation.

C. Web Development = Engineering

The web developer is basically the engineer of the whole operation. The Developer makes sure everything actually works and is functional. The developer makes sure the trusses on the roof can actually hold enough weight to keep everything up. The developer makes sure the walls are sturdy and everything is developed logically and intuitively. The developer keeps out bad weather and other external forces that may try to rip the house down. The home must be build on a solid foundation just as a web site should.

D. Site Content = Interior Design

The content on a web site would be like the interior design of everything. Maybe the furniture is placed a certain way when one first enters a home to set a mood. This could be like a homepage having a certain feature only on the homepage to draw people in. There may be less clutter in the hallway because it is expected to be a place just for people to simply travel through. The same thing may be done on an ecommerce site during the transaction process - all the navigation and heading elements may not appear to avoid any confusion and allow the customer to simply walk through.

3. The Finances

In addition to the similarities between building web sites and real estate there are also many similarities in monetizing and creating passive income with the 2.

A. Service for money

Templates = Track Homes

Templates are essentially track homes. Track homes are a quick template that is used over and over again just like a web template. It gets the job done, but does not have much customization or special features.

Custom Brochure Sites = Custom Home

A custom brochure site for a local company would be like building a custom home for a local resident. These sites and homes can usually be built with a small team of people.

High End Business Sites = Skyscraper

The high-end sites like an Adobe or Microsoft site would be considered a skyscraper. These are the very dynamic and database driven sites that require a large team to operate and are worked on and maintained every day, just like a skyscraper.

B. Passive Income

While some people may generate income each time they build a property, others generate income with the actual property. These are the the more investor-oriented ways to make income.

Flip It

Just as a piece of real estate may be purchased under market value and then sold for a healthy profit, this same thing works with web sites. There may be a "distressed" web site that needs a little bit of work and direction to turn it into a profit. These sites can usually be purchased super cheap and then with a little cosmetic work and tweaking be sold for a decent profit, just like in the real estate market.

Rent/Lease It

A real estate property can also be leased out to a tenant. A web site can also be rented or leased out.

Create a community

4. The Problems

A. No Visitors = Vacant Property

B. Hardware Errors = Natural Disaster

A hardware problem on a server hosting a web site is like a natural disaster that damages real estate. The problem is very unfortunate, but there is very little that one can do to prevent it, sometimes this kind of stuff happens.

C. Hackers = Vandalism

The hackers of a web site are like the vandalism of a piece of real estate.

D. SPAM = Junk Mail

E. IP / Host = Bad Neighborhood / Neighbors

5. Jobs derived from both

A. Appraisers

B. Sales Team

C. Office manager

6. Where web sites and real estate differ

A. Initial Investment

The initial investment for a web property is much much less than that of a real estate property. A web site is also much more volatile. A low cost startup site can end up being a huge cashflow generating machine. Real estate is much more stable and tried and true. If you spend a lot in real estate you will generally make a lot. If you spend a lot in web you could still loose a lot.