Virtual Real Estate is a potential investment market in 2023. So what is virtual real estate? What are advantages and disadvantages? Check out our guide to virtual real estate to learn everything you need to know!
What Is Virtual Real Estate (Metaverse Real Estate)?
Metaverse real estate is land in virtual worlds. In the most basic sense, they are pixels. However, they are more than simply digital photographs. They are programmable areas on virtual reality platforms where individuals may mingle, play games, sell NFTs, attend meetings, attend virtual concerts, and engage in a variety of other virtual activities.
Virtual Real Estate is essentially intangible digital assets that are made accessible for sale and investment on the blockchain. Digital assets are valuable online assets: objects that can be traded in the real world for cryptocurrency or fiat cash. Domain names, high-ranking websites, and even papers are examples.
In the realm of virtual real estate, you may acquire plots of land in the metaverse with the intention of developing property, selling properties for a profit, or even renting out plots for metaverse events.
Digital real estate is predicted to flourish and expand in tandem with the advent of the metaverse. In reality, a metaverse real estate bubble occurred in the fourth quarter of 2021 after Facebook changed its name to META and signaled a strong interest in the metaverse. The value of metaverse real estate is expected to expand at a CAGR of 31.2% from 2023 to 2028 as its popularity grows.
How Virtual Real Estate Works?
Virtual real estate is similar to physical real estate. If you wish to invest in tangible real estate assets, the procedure is more involved and time intensive. Before you can have access to your property, you must first obtain authorization, sign paperwork, inspect the property, and make payments. Virtual real estate works by giving purchasers quicker and simpler access to their assets simply by enrolling on metaverse platforms and adding the items to their carts.
You do not need to obtain approvals or physically check any property in the virtual real estate environment. To purchase digital assets on the blockchain, all you need are cryptocurrency tokens and an active registration on the metaverse platforms. Platforms like as Decentraland, The Sandbox, and Earth2 provide a variety of digital goods that you may purchase and benefit from in the long term. When you purchase your assets, you are issued a deed with a unique code that assures there is no duplication or fraud. Furthermore, you are provided several alternatives and the possibility to enhance your assets.
It may appear absurd that people acquire tracts of property that do not exist physically, yet investors do so for a purpose. The value of virtual real estate rises as more individuals purchase the accessible assets.
For example, a parcel of Decentraland property originally sold for $20 in 2017 is now worth well over $15,000. Furthermore, these digital assets may be created in the metaverse and rented out to organize events. The pieces of land can also be utilized for advertising by organizations, producing revenue for investors.
Why Purchase Metaverse Real Estate?
Metaverse real estate gives users a place to connect online with other people. Individuals can utilize their digital land to play games and socialize. Creators can monetise their intellectual property’s content by charging for access or trading their NFTs.
Brands may utilize their virtual assets to market services, plan virtual product launches, and deliver unique client experiences. These digital pieces of land present a profitable possibility for real estate investors.Metaverse properties, like real-world assets, can be developed, flipped, or leased. Indeed, there are several applications for metaverse real estate.
How Much Is Metaverse Real Estate Worth?
When Decentraland staged its inaugural LAND sale during the Terraform Event in December 2017, a plot of land cost only $20. In 2021, these plots sold for an average of more than $6,000. Prices for LAND tokens have risen to almost $15,000 by the beginning of 2023.
Companies have been significantly investing in virtual land holdings due to the favorable outlook for metaverse growth. Tokens.com, a blockchain technology business, paid $1.7 million for a 50% stake in Metaverse Group in October 2021. The Republic Realm set a record in November when it paid $4.3 million for a property in The Sandbox.
Prices for metaverse properties have risen further as a result of increased demand. Digital land ranges in price from $6,000 to $100,000, with some apparently selling for considerably more. A home close to Snoop Dogg’s in The Sandbox was one of the most expensive sales in the last year. It was allegedly purchased for $450,000 by an unnamed bidder.
How to Buy Virtual Real Estate
Purchasing a metaverse property is similar to purchasing an NFT. Your deed of ownership is a one-of-a-kind bit of code on a blockchain. This code is what validates your ownership or rights to that piece of digital real estate.
To begin your metaverse real estate portfolio, you’ll need your own personal crypto wallet. Some services employ particular cryptocurrencies for their transactions, therefore you should look into them before registering for a new wallet. Then, go to the virtual metaverse site and join up for an account. To purchase land and other assets, you must link your digital wallet to the site. Select and purchase a piece of land.
Like real-world properties, you can also purchase metaverse land through brokers and property managers. However, unlike in the real world, metaverse brokers are not required to have licenses and are not subject to any restrictions. So make sure you only deal with reputable companies.
Where to Buy virtual real estate
The majority of metaverse real estate is owned by the Big Four. Decentraland, Sandbox, Somnium Space, and Cryptovoxels are among the prominent actors in the metaverse economy. These platforms own a total of 268,645 plots, many of which are among the most expensive on the market.
Sandbox
Sandbox presently controls over 62% of the metaverse real estate market. LAND in this area presently costs an average of $11,000, with luxury lots selling for between $20,000 and $30,000. You may purchase or rent virtual places for a variety of purposes. There are various sized family houses, commercial areas, art galleries, and hangout locations.
In this UGC-voxel platform, everything is built by the community for the community. Sandbox gamers and creators purchase, sell, and exchange voxel creations. They purchase LAND and create experiences on it. They may also monetise these experiences by utilizing NFTs and SAND, Sandbox’s utility token.
In recent years, the Sandbox has formed strategic alliances with gaming companies like Atari, financiers like Square Enix, brands like Shaun the Sheep, and celebrities like Snoop Dogg. These collaborations have increased its attractiveness as both a creative venue and an investment platform.
Decentraland
Decentraland is a 3D virtual reality platform built on the Ethereum blockchain. Land parcel ownership is conveyed using LAND NFTs with specified grid coordinates and a reference to property data. To purchase LAND, users must have MANA tokens, which are also used to purchase in-world products and services.
Decentraland’s virtual world is divided into districts, each with its own sort of content. Users can engage, watch, and exchange material in these places. These districts provide more focused traffic to creators and companies, allowing them to offer their content to specific consumers.
Cryptovoxels
If you’ve played Minecraft, you’ll feel right at home at Cryptovoxels. In this virtual environment, you purchase land and construct structures out of monochromatic blocks. Colors and other components may be added to your designs using native $COLR tokens. The site also includes editing, avatar creation, and messaging features.
Creators and companies may buy digital land and use it to develop galleries and storefronts that exhibit their carefully selected collections, goods, or services. A lot of land at Cryptovoxels presently sells for $5,000 on average, but prices may go up to $10,000 depending on the size and location of the property. Land ownership, like that of other virtual worlds on the Ethereum blockchain, is forever recorded on the blockchain.
Somnium
Somnium Space is a blockchain virtual reality metaverse built entirely by the players themselves. The 3D virtual world provides users with rich VR experiences that can be accessed on both desktop computers and mobile devices.
The virtual space is separated into three sizes: small, medium, and extra-large chunks. You can develop your own area on beachfront or roadside property. You can import objects such as avatars and monetize your digital assets.
In Somnium, land parcels and in-game assets are tokenized. On the Ethereum and Solana blockchains, ownership is verified and documented. Somnium Space parcels have a median price of $11,500. In February 2023, the most expensive lot sold for $43,100. Those with low money who want to buy parcels can still do so with smaller parcels priced between $2,000 and $4,000.
Aside from the Big Four, more than a dozen sites currently offer metaverse lands. Axie Infinity, Star Atlas, Bit Country, and Aavegotchi are some other options.
How to Choose Which Parcels of Land to Buy on the Metaverse?
Location is important in picking a virtual territory in the metaverse, just as it is in real life. Parcels in The Sandbox and Decentraland continue to rise in value as major companies such as Atari, Samsung, Miller Lite, and Adidas stake their claims in these virtual environments. Many early purchasers of neighboring or nearby property have profited handsomely from their purchases.
If you want to invest in metaverse real estate, seek for places with development potential. Places where people might possibly assemble will be more valued than those in unremarkable places. Consider pieces of property adjacent but not within developed areas. You may get these properties for relatively inexpensive costs, develop on them, and then wait for values to rise.
Risks and Challenges of Investing in the Metaverse
The risks and challenges of investing in the metaverse are similar to those of investing in any new and emerging technology. There is a risk that the metaverse may not live up to its hype and that it may not be adopted by enough people to become a viable platform for businesses and individuals.
For one, if a metaverse platform goes offline permanently, all your land and assets in that platform become non-existent.There is also a risk that the metaverse may be used for illegal or unethical purposes.
Another risk is that the metaverse may be controlled by a small number of companies or individuals who could use it to manipulate public opinion or control information. This could lead to a situation where the metaverse is used to spread propaganda or misinformation.
Finally, there is a risk that the metaverse may be subject to regulation by governments or other authorities. This could limit the potential of the metaverse and make it less attractive to investors.
Buying Virtual Land in the Metaverse (Big Risks with Potentially Big Rewards)
Virtual land is a new and emerging market with big risks and potentially big rewards. The Metaverse is a virtual world that is growing in popularity, and virtual land is one of the most popular items within the Metaverse. While there are many reasons to invest in virtual land, there are also many risks.
Overall, investing in virtual land is a risky investment, but it could pay off if the Metaverse becomes popular. If you’re interested in buying virtual land in the metaverse, there are a few things you should know.
First, it’s important to understand that the metaverse is still in its early stages of development, which means that there are a lot of unknowns and risks involved. Second, while the potential rewards of investing in virtual land could be huge, there is no guarantee that you will make any money back. Finally, it’s important to do your research and understand the risks before making any investment.
FAQs
Is virtual land a good investment?
Depends on individual circumstances and preferences. Some people may find that virtual land is a good investment because it can appreciate in value over time, while others may find it to be a riskier investment because the value of virtual land can fluctuate rapidly.
How to make money with virtual real estate?
There are a few ways to make money with virtual real estate. One way is to create a website or blog and offer content for free in exchange for advertising space on your site or sell virtual real estate products or services online.
Another way is to lease virtual space for businesses or individuals to use for their own purposes. Finally, you can also earn commissions by referring others to buy or sell virtual real estate products or services.
How to sell virtual real estate?
To sell virtual real estate, you will need to list it for sale on a real estate marketplace like Zillow or Realtor.com.
You will also need to create a virtual tour of the property so potential buyers can see what they are buying.
How to become a virtual real estate agent?
To become a virtual real estate agent, there are a few things that will help you succeed in this field. First, it is important to have a strong understanding of the real estate market and the process of buying and selling property.
You should also be comfortable using technology, as you will need to be able to communicate with clients and potential customers online. Finally, it is helpful to be organized and detail-oriented, as you will need to keep track of listings and client information.
How to create virtual real estate NFT?
To create virtual real estate NFTs, you will need to use a blockchain platform that supports the creation of NFTs. Some popular platforms that support the creation of NFTs include Ethereum, Waves, and Tron.
Once you have selected a platform, you will need to create an account and register as a user. Once you have registered, you will be able to create your own virtual real estate NFTs.
Conclusion
Virtual land is a new and exciting investment opportunity, but it is important to remember that it is still a risky investment. With potentially big rewards comes the potential for big losses.
Before investing in virtual land, be sure to do your research and understand the risks involved.
