At the end of November, I bought a PF website with some of my earnings from RFI. I was hoping to break even within 6 months. Now that I have, drumroll please… I am happy to present my new site, The Savvy Scot 🙂
If you are regular readers of that blog, you already knew, as I have made no efforts to hide my identity behind an alias, however, I didn’t want to share the news until the operation was profitable. Call it superstition, whatever.
Buying a blog vs starting a blog
The Savvy Scot is a UK blog, which is two years old. In the deal, I got
– An older domain. That is something Google likes, and advertisers do too.
– A PR3. When I bought the site at the end of November, Google hadn’t updated its PageRank in 9 months. It did 10 days later, in December. As advertisers were still stuck on PR as a way to determine a site’s worth, and I was getting desperate of seeing MMYW stuck with a PR0, I bought my way in.
– Established social accounts. There are about 1,500 followers on FB and 5,500 on Twitter. Building that takes time and effort.
– 300 odd posts. You can get poorly written ghost posts on Fiverr for $5. That would be a $1,500 value. Although those posts are better written, personal, already uploaded with a picture, tags, etc. so I think it is worth more.
– A list of current and past advertisers. With an older blog, getting a list of contacts is awesome. Not only can I leverage those contacts for RFI and MMYW, I can also get recurring business just by renewing existing deals.
– A money generating website. It took 6 months for MMYW to break the $1,000/month income level. This site was already generating more than this every month.
– A UK blog. There are very few personal finance blogs in the UK, mostly because the main one, Money Saving Expert, is overshadowing everyone. A few good ones include The Money Principle, Miss Thrifty or Money Bulldog, but they are few compared to the US. I am hopping to diversify my affiliate sales with UK products (that I use, remember I still have a property in the UK and do most of my banking over there) and to talk about a few UK related topics from my years over there, with post like how workers can score 32% off a bicycle to cycle to work.
It is quite interesting to compare the progress on both Savvy Scot and MMYW, whatever the purchase price was, I broke even after 10 weeks, and now both sites are bringing in a similar amount. In January, MMYW had made around $2,500 (net, when you take out 6 months of VA and staff writing costs) minus my blood and sweat for 7 months, whereas Savvy Scot has brought around $300 after breaking even, for only two months of active promotion, writing a few posts, and pitching it to my ad contacts.
Both sites benefited from my previous RFI experience and contacts. But is the $2,000 difference to work like crazy for 6 months to start a site worth it so you don’t have to buy a site? That is before putting a value to the extra content, there are 200 more posts on Savvy Scot than MMYW, or the domain age.
It is worth it if you want to have full control of your site and content. I was a Savvy Scot reader before buying the site so I know it was “clean”, but I hadn’t read all 300 posts, whereas I know exactly what is on MMYW.
It is worth it if you don’t want to spend time looking for a bargain. I got a cheap price because I knew the blogger, I trusted him when he said he was too busy to take care of the site (it could have been an excuse for “I am not making any money and my pageviews are at all time low”), and I didn’t have to spend hours reviewing the site to make sure it was a quality one. On Flippa and other web selling marketplaces, you find a ton of websites that were created with the sole purpose of being sold and flipped. I bought a work of love. Those low quality websites have fake links from link farms, sometimes a fake pagerank, and you never know what other little surprise is there. It takes days, weeks even, to fin the needle in the haystack that is a genuine good deal.
If you are looking to buy a website, a good place to start is asking around if anyone wants to sell. Many bloggers don’t make it past one year and are happy to pass on their baby for a reasonable fee.
It takes time too. I almost bought a website in February last year, but once I made my offer it got penalized by Google and lost its pagerank. I wasn’t experienced enough to know it was not that big a deal, and most importantly how to restore it, so I withdrew my offer.
There are also bloggers who think their site is worth 10 times market rate, and won’t make it worth your while.
So if you want to save time in that department, start your own website.
As an investment, buying The Savvy Scot has been great. Do you have many investments that break even after 10 weeks? I don’t. Based on RFI’s history, I am confident I can generate $1,000 a month with it for the months to come. Comparing with the 1% rule of rental properties, a house renting for $1,000 a month should be worth at most $100,000. If the house cost you $50,000, you got a real bargain. Based on my breaking even in less than 3 months, you can make a wild guess and be sure I didn’t pay $50,000 for that website.
I talked about what I think websites are worth when I announced my purchase of Savvy Scot, and explained they generally go for 24 to 36 months of generated income at most. Equivalent to your $100,000 house renting for $2,777 a month. Not bad, eh? Sure, a blog requires work every single week while your property could almost be a source of passive income, but you don’t pay property taxes on a website, or maintenance, repairs, the heater never breaks, the roof never leaks…
Now that the secret is out, on to the shameless plugs :).
Note: Now that the website is profitable, 10% of its income will go to my Guatemalan village’s students and education projects.