Bryan Ellis is widely recognized as a expert in the fields of real estate investing and internet marketing, so it’s no wonder he’s regarded as a founding thinker of the new phenomenon of Virtual Real Estate Investing. I recently spoke with him about this topic:

Landlords, rehabbers and foreclosure investors, take notice - you may soon be focused on the new concepts of Virtual Real Estate Investing. Everything from using the internet as an avenue to make more money in real estate to online games such as SecondLife seem to be included in the popular definition of this term. And the pure financial potential is staggering.

In order to figure out the truth of the matter, I sought out Bryan Ellis whose experience in the fledgling industry is truly impressive.

“I began using the term ‘virtual real estate investing’ in the late 1990’s when I realized the clear similiarities in profit strategies, regardless of whether the real estate in question is ‘virtual’ or ‘physical’” said Ellis.

One example of the parallels between virtual and physical real estate Bryan Ellis cites is the similarity between the monetization of domain names versus physical property. He points out that control of a domain name or even a specific web page is much like controlling a real estate property: “those assets can be monetized in similar ways: By selling them for a profit, by leasing them, by offering advertising, etc. It’s not even necessary to own a website in order to profit from it.”

Bryan Ellis points to the example of websites like HubPages, Squidoo, Google Knol, etc. “Each of these services allows any person to write an article or create other type of content, and then allows the author to share in the revenue generated on that page. It’s almost as if you’re renting retail space in a highly desirable shopping district, only you get the benefit of a ‘great address’ in the form of a well-known domain host like Google.com but without paying a single penny in rental fees. It’s a win-win scenario.”

I must admit: Its easy to see the parallels. For example, if you’re the owner of a desirable property, its desirability is (in a business context) largely due to its being in a location that is of interest to others. Similarly, ownership of a desirable domain name is valuable for the same reasons. Regardless of the type of asset, you can sell or lease or use any number of strategies to turn the assets into cash.

In our next installment of this series on virtual real estate investing, Bryan Ellis will share the internet analogies to the physical concept of real estate development.