The other way you could profit off expired domain names is redirecting the traffic to your affiliate link. For illustration, if you have an affiliate link that sells beauty products, and the expired domain name was mentioned or ranked in a high authority website for terms related to beauty products you can redirect the traffic there to make sales. One sale is enough to make you a decent profit.
There is a common misconception that domains expire on their expiration date. If a domain registration is not renewed by its expiration date, the domain simply goes into "expired" status, which means all services are shut off. Typically, we provide a 35-day grace period during which the current holder can still renew it for the standard renewal fee. For more information please review our domain deletion policy.
What about option #4 - Redirect your existing domain to the old domain? I bought an old domain that is 100% relevant to my current domain but currently has with very little content. It did have more content fours years ago. The old domain is 13 years old, pr=3, while my current is 7 months old pr=1 and a decent amount of content. The old domain I purchased was not expired though and I do not know if this makes a difference. What are the pros and cons of option #4? Am I correct to think that option #1 would result in no benefit from the old domain's age value and if so why is it not listed as a con, a MAJOR one. Its hard to believe that a 301 using option 1 would give my existing domain 13 years credit but I'll take it if it does.
So, what to do? Simply, you must use someones other hard work and thinking. People have already contemplated all possible variations, synonyms, they know how domain names are valued, know about keywords, type-in traffic etc. Every day tens of thousands domains names are expiring. Every single day. That is hell of a lot expired domains to pick from. The reasons why people "let" domains expire are various. Could be somethins as banal as forgeting to renew, could be as serious as physical death. Many let domains expire because they don't need them any more. But that is not your bussiness to think about.

If you buy a domain from a 3rd party, the backlinks are valuable.  I always wait a few months before redirecting, so just set up a quick minisite until two page rank updates have passed and then go ahead and 301 redirect.  However, it seems that you'll get the link juice from the back links, the anchor text is ignored by Google.   Buying a domain at Godaddy TDName expired auctions, seem to not count as a dropped domain if you immediately set up a mini-site.
The first is the link profile I and actually took this example carbondsystems.com because it looked like a pretty good choice. It’s from 2003. It has some links, some age and it’s in DMAS and looked at the link profile in DMAS. So, you just copy and paste the domain,  the home page it to here, click on the search links button and this will show you all the links to that site.
Regarding my statement above, “Any domain name that reaches expired status and is not renewed by the owner will be auctioned by an auction service.”–it did overstretch. I’ve modified it to be: “A domain name that reaches expired status and is not renewed by the owner will be listed at an auction service (see FAQ for exception to this rule).” Then I added a FAQ to clarify. Please check my thinking:

The results can be different on a daily basis because more and more domain names expire on a regular basis, and some of them are worth real money. All that they have to do is to key in particular keywords that clients regularly search for in their niche and appear on the first page of most search engine results. You can get more that a dozen of expired domain names daily using this fantastic tool.
The dropdate for the following TLDs is not verified. Domains might drop earlier or later: .eu .cat .travel .ae .af .as .at .aw .be .bg .bi .bj .bo .bw .cl .co .cx .cz .dk .dm .es .fi .fo .fr .gd .gg .gi .hk .hr .hu .ie .io .iq .ir .je .jp .ki .kz .lt .lu .lv .md .mg .mx .nl .nc .nf .no .nz .pe .pf .pl .pt .ru .sg .si .sm .sn .so .st .su .sx .to .uk .uz .za .berlin .cloud
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