Also called domain name leasing · domain rental
Domain leasing, explained
A lease sets the fee and term, permitted uses, who controls DNS, and what happens on late payment or at the end. The owner either keeps DNS and points records where the tenant asks, or lets the tenant set nameservers under the contract. Some leases include an option to buy, which makes them lease-to-own. Escrow.com's holding service, for example, can hold a domain during a scheduled-payment lease and return it to the seller when the term ends.
Leasing suits names with steady business value whose likely users will not pay a lump sum, such as local service and geo names. The risk stays with you as registrant: if the tenant infringes a trademark, sends spam or hosts illegal content, the complaint arrives in your name. Write use restrictions into the contract, keep the right to suspend DNS, and check the tenant's business before signing. The common mistake is a handshake lease with no termination clause, which leaves no clean way to take the name back. Have a qualified attorney review the template.
Example. An investor leases a city-plus-service .com to a local contractor for a monthly fee, keeping the registration and the right to suspend DNS if payments stop.
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Education, not financial, legal or tax advice. Domain investing is speculative and most domain names never sell. Read the disclaimer.