When it comes to buying blogs, many who are new to the trade don't realize why it is important to build a portfolio of blogs. Instead, they search for a single, expensive blog, put hundreds or thousands of dollars into it; and then hope for the best. Unfortunately for them, they don't understand what this means in terms of risk.
This is the equivalent of observing that a stock increased in value by 20% in the previous year; and then dumping every last penny you own into that stock. You might get an excellent return, a mediocre return, or a bad return, but one thing is clear: the variance of your return will decrease if you divide that money up and split it between 10 stocks that earned a 20% return, rather than putting it all into a single stock.
The idea behind the above paragraph is simple: no matter what strategy you are using to earn large returns, practicing diversification is always a good idea. It allows you to get the same expected return while decreasing the variance of the returns (i.e. decreasing how spread out the realized returns will be).
Now, when it comes to constructing a portfolio of blog properties, there are a number of different strategies you can use. Analogous to the case for stocks, you can build growth-based blog portfolios, stable, low-return portfolios, and portfolios that attempt to hedge against certain types of losses.
How Much is a Blog Worth? How To Get a Blog Valuation
Before you make any blog purchases that are over $500, you should get a paid appraisal. There are two reasons why getting such an appraisal is important:
1. If you're planning to purchase the blog in the secondary market (i.e. at an auction or from someone who owns it), then the price you pay will depend on a lot of things (i.e. the day on which the auction closes, the individuals who found out about the auction, etc.). It's not clear that the price you pay is "the market" price; and thus, if you're not careful, you could easily overpay.
To some extent, an appraisal can help you to avoid this problem. While most appraisals are biased upwards and rely on the proprietary methods of the company in question, they can at least give you an upper bound on the value of blog in question. Keep in mind, however, that this appraisal won't necessarily say anything about the future growth potential of the blog. This may be something you will need to consider yourself.
2. Having an appraisal for your blog will make it easier to resell in the secondary market. This is especially important if you are planning to "flip" the blog, rather than hold it for a prolonged period of time.
On the other hand, if you are planning to hold the blog for a prolonged period of time, it is likely that you will have to get another appraisal before you sell it, since the original appraisal will be much lower than the newer one.
If you're planning to purchase a blog that is more expensive than $500, then it may be worthwhile to invest in an expert-appraisal, rather than automated appraisal. Remember the two-fold purpose of an appraisal: to find an upper bound for the price of the blog you're considering purchasing; and also to bolster the price of the blog when you resell it.
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