Site valuation - how much to expect for a site thinking of selling?

[Automotive site]

Its in the automotive niche(cars) and provides news and videos of latest happenings from the auto industry.

The site is 5 years old and gets around 20,000 uniques a day (weekdays) and just under 2 pages per user.

The site is all unique content and I would like to think high-quality.

The traffic is quality traffic with much of it coming from several sources - google and other major search engines as well as substantial daily repeat traffic. It also has substantial RSS, Twitter followers.

The site averages around $3,000 a month in income (adsense, infolinks (used sparingly to avoid cluttering content with many underlines) and couple of direct ad sales each month) and the cost is appx. $500 to $700 in outsourced content (don't write the content myself anymore). I am sure it can earn substantially more. I am pretty ameteurish when it comes to fully utilising a site to maximise income. For example, I have very little knowledge of affiliates. In fact, I am also pretty poor at site optimization and feel search traffic can be increased dramatically by someone who is very good at optimizing.

I know people usually value sites based on a 12 to 36 months (1 to 3 years) approach but I feel not all sites should be sold based on this method. In my opinion, this site should be earning more and has huge potential and provides a bankable income as long as the site is updated with content daily (or 5 or 6 days a week).

[maximillianos]

I think for a site as young as yours you might expect offers from 2x to 4x annual profits. Be sure to consider the cost associated with hiring someone to add content as an expense.

That said, I think you are under monetizing your site. So that should be a pricing consideration. Perhaps hold out for 4-8x profits.

[Automotive site]

maximillianos,

How much do you feel I am under monetizing?

I too feel someone with much better knowledge of generating income from sites could do a much better job than I am doing. That said, I am quite happy with the income its generating at the moment.

You feel a 5 year old site is young?

The only reason why I am considering selling is because I would like to buy a property and the proceeds could be used to lay on the initial deposit.

Then again, I also want to hold on because I feel good websites are a good investment for the long run because the website buying/selling market could take in a real meaningful way. At least I think so.

Its a tough dcision that I wish I didn't need to take.

[maximillianos]

Well at 20k visitors a day (unique?), you are looking at 600k visitors a month. Automotive is probably a decent paying niche. I would guess, based on my experiences, that you might be able to earn 3-4 time that.

5 years is a decent age. There are just a lot more out there much older.

Selling is a very tough decision. I'm going through it right now. I will post more about my experience if it all goes well. I went back and forth for months.