Real Estate Marketing & Beyond
Real estate investors are always looking out for the next great market to corner. Most recently, it’s been income properties that are ideal short-term rentals for the AirBnB crowd; before that, it was house flipping. And still, before that, the list goes on. However, the newest kid on the block when it comes to real estate investment isn’t anything that exists in the physical world – instead, it’s all about virtual property. Here’s what you need to know about what kinds of opportunities await you if you buy Metaverse real estate.
Unless you’ve been living under a rock, you’ve likely heard the phrase “the Metaverse” more than once. But even if you have heard of it, you might not know what it is – or what sort of potential it might have. In essence, the Metaverse is poised to become the future of the internet. If this sounds vaguely amorphous, that’s because it’s still being built. But while its final form has yet to be decided, it’s most certainly going to involve shared spaces that exist exclusively in virtual reality and that can be accessed online by anyone with an internet connection.
If you’ve ever read Ready Player One or watched the recent blockbuster film based on the novel, you’ll get a good idea of what the Metaverse has the potential to be. Part of online entertainment, part extension of one’s identity and reality, the Metaverse, as many innovators are striving towards, already exists in simplified forms already. Social media platforms like Facebook, Instagram, Twitter, TikTok, and even LinkedIn, offer billions of people around the world a way to exist virtually online in ways that were impossible even just ten years ago. Tomorrow holds even more surprises!
As more virtual spaces begin to be developed and launched, it’s become clear that holding a stake in one of those virtual spaces has become possible. As such, it’s now become quite possible to purchase property in one of these virtual spaces. Of course, it’s not a literal plot of land that you can drive to and walk around on; these spaces are, after all, virtual. But these virtual spaces can be leveraged by their owners to be configured for users to socialize or use as meeting spaces, to play games in, to sell both real and virtual products like NFTs, and countless other uses.
With the Metaverse growing in leaps and bounds, and with the ability to buy Metaverse real estate growing right along with it, the possibility for growth is quite strong. In fact, there are now several different “neighborhoods” where the virtual property can be bought and sold, provide content to users that can then be monetized, or offer space for third parties to advertise their goods and services. Develop a Metaverse property, flip it, lease it – just like a property in the real world, if you can think of something to do with your property, you can find ways to make it happen.
If you want to buy Metaverse real estate, there are processes already in place making it easy. In fact, you might already be familiar with them. If you’ve ever bought a non-fungible token (NFT), or even if you’ve heard about this unique type of digital ownership, then you’ll immediately have some grasp of how a Metaverse real estate purchase works: proof of ownership of your parcel of digital property exists as a unique piece of code stored on a blockchain database. Being in possession of this code is equivalent to your keys to the kingdom – or more closely your deed and title.
As long if you have a digital wallet – the same one you would need to purchase an NFT – you can buy Metaverse real estate. Of course, you don’t have to purchase this property without any help. An entire industry of Metaverse real estate through the help of real estate brokers that have chosen to specialize in this new and emergent market sector. Be aware, though – because of the brand-new nature of Metaverse real estate, there are currently no regulatory measures or requirements for licensing. If you do choose a broker, be sure to select one that you know will be reliable.
Just like it does with their physical counterparts, the purchase prices of virtual properties are dependent on demand for those properties. However, for the most part, figures have been scaling up over the past few years. While there are plenty of Metaverse real estate platforms offering users an opportunity to buy their own parcel of virtual land, larger players (of which there are four) have seen prices rising. Properties in Decentraland, one of these major players, were selling at approximately $5800 USD in March of 2021.
Today, that figure could be four to five times higher, with many averaging at around $20,000. However, there are extreme outliers. One such example is how a parcel of digital land in the Sandbox, another major Metaverse real estate platform, sold for $450,000. The big draw? The parcel was located right next door to a property owned by Snoop Dogg. Other major players, such as Somnium and Cryptovoxels, also follow this general trend, though there are plenty of outliers in these locations as well.
The Metaverse is poised to exhibit some truly meteoric growth over the next few years. However, it’s still an incredibly volatile market and one that has some spectacularly high risks. If a platform like the Sandbox ever went permanently online, that $450,000 parcel of digital land becomes less than worthless – the digital property ceases to exist altogether. In other words, your investment would be a total loss.
In other words, if you buy Metaverse real estate, you could be playing a dangerous game. The highly speculative nature of the market makes it possible to both earn massive fortunes and lose even larger ones – and often several times a day. Start small, never invest more resources or capital that you can’t afford to lose, and be sure to fully research the potential benefits and risks of investing in Metaverse property before you make a final decision.
