Domain name buying and selling business is like the international real estate business. But in this domain name selling business you don't pay any tax unless you inform them while you are living in a developed country where such earning comes under the taxable section. You pay just the yearly registration fee to the register the domain name and you have to pay for the domain price annually to renew it. Domains can be registered from 1 year to 10 years of period. You can buy any amount of domains in any extension like .com, .info etc. To buy some domains like .US you must have a physical address in the USA, then only you are allowed to buy one. The most valued domains are the ones end coming with .COM extension with three alphabets. It is better to buy domains using your credit card and registering them under your name.
If you are serious about this business you can become a re seller in a good domain selling company, so it will be easy for you to transfer it to other people whenever you want to sale it.
Also you can rent out them to people who want to do their own businesses under this name and get your rental fee. Or sell them to bidders who want to buy them. The price may be some hundreds to some millions depending the value and demand of the web site name. In recent years some web sites have fetched good valued prices. For example, S*x.com (add e in the middle.) around $12 million, On.com around $635,000, Macau.com around $550,000, Blue.com around $500,000 and Jasmin.com sold for nearly $310,008. Also you can use them to park in a hosting company to earn monthly income if the domain name used to come in the top search results.
Two letters, three letter domains are also in the top price range list. There are nearly 3,000 individuals and companies are involved in this domain buying and selling business all over the world, where investment is very low and the profit is ultra high. There are many companies which are working as middleman and they are called also as domain parking.
A person can register with these companies online and can publicly announce the domain names which he has for sale. Others who want to buy it can bid online with their offered price.
Also if you are intend to buy domain names take care what kind of names you may want to buy. If you are interested in buying celebrity names and company names as your domain names, they may bring you legal trouble as the owners may try to claim it according to their legal right. Also buying domain names only for cheating and look alike names too may bring you legal problems.
First you will need a good credit card, e-mail address with strong user name and password.
Go to any of the web site that is selling domain names, become as a member there with a good username and password. After that select any desired domain name and buy it using your credit card. Get privacy for your domain name. Some registrars offer this free while some registrars may charge for this service. This is to avoid people seeing your personal information's and also to avoid getting spam e-mails. Some companies offer anti theft protection for your domain. If you see that there select it to protect your domain name.
Put a lock to your domain name in your control panel to avoid unauthorized transfers without your knowledge. Don't forget when you are buying a domain in your name give correct personal information. If you failed to provide the correct personal contact information you may loose your domain name for that violation. Also you can buy domain names under your company name too.
Learn more about Domain names here. http://www.icann.org/