After attending a seminar in April 2007, I decided to get into the domaining business i.e. to start buying and selling domain names for profit.

There is a fortune to be made from this particular investment class because of the nature of domain names. I suppose you could compare them to licence plates on cars. Each one is unique.

However, if you were to invest in a car licence plate, it’s likely that you would be limited to buyers in the country in which you reside. Not so with domain names – a good dot com can be used the world over and so anybody from any country is a potential buyer.

Bearing this in mind, I decided to jump in at the deep end and buy a collector’s item – a three letter dot com domain name. The plan is to buy now in the hope that the value will rise considerably over time.

LLL.coms are rare and so they are expensive.

As of the 1st of December 2007, the minimum price you should expect to pay to get one is $6,000. And that’s for a LLL.com containing poor quality letters.

If you can find a 3 letter dot com for less than $6k, snap it up because you will probably find that you can flip it fairly easily for a profit.

I bought one back in June of this year for what seemed like a ridiculously large price of $5,800.

At that time the minimum wholesale price for an LLL.com was $4,400. Fast forward 6 months and the minimum price has increased by over 30% to $6,000 so even if I overpaid when I bought my little dot com gem, it is worth more than I paid for it already.

Whether prices will continue to increase is a matter for debate but one fact remains – no-one is making any more three letter dot com domains so the supply is drying up. If the demand remains then surely these collector’s items are a good investment?

My strategy was simple: buy the domain on a credit card then transfer the balance to a 0% interest card. Natwest were only too happy to give me 13 months interest free so I will simply be paying a little each month to service the debt and will assess my position when the interest-free period is coming to a close.

£3,000+ on a domain name – am I mad? We will have to see. In the meantime I am toying with the idea of getting some more…