Metaverse real estate is currently one of the most popular properties people can buy, and reports suggest virtual land will go on sale in 2021. reached At $500 million, it sold about $85 million in January 2022 alone.
Metaverse real estate sales are estimated to reach nearly $1 billion in 2022, making it a hot asset class for investors around the world. Buying a digital land gives you the advantage of early access to a rapidly changing and high growth area.
Definition of Metaverse Real Estate
The Metaverse is a three-dimensional, immersive virtual platform that allows users to interact with each other, digital objects and AI-powered avatars in highly realistic and natural ways.
Spatial communication platforms are also interoperable. This means that the user can move between virtual worlds, different platforms can coexist within his one environment, and virtual games and co-working spaces can exist on his one solution.
The metaverse is also democratized and is not owned by any single organization, individual or entity. Anyone can invest in it and take advantage of the space, technology and environment available.
To enable these capabilities, the Metaverse relies on technologies such as virtual reality, augmented reality, mixed reality (VR/AR/MR), blockchain, artificial intelligence (AI), 5G, and cloud computing.
It also has the potential to be a virtual replica of the physical world, where Metaverse users can leverage the virtual environment to monetize and profit from goods and services. A common way to do this is by purchasing land in the metaverse. There, real estate can be developed that can be monetized by the buyer or the borrower.
Each Metaverse real estate plot is called a virtual “parcel”, a block of 3D space where developers can layer objects, design VR worlds, overlay experiences, and build interactions.
Metaverses typically have democratized governance bodies that determine how new parcels are created, allocated, and opened to investment by property buyers.
Currently, most of the virtual land sales are made on four metaverse platforms such as The Sandbox, Decentraland, Cryptovoxels and Somnium. Parcels exist as non-fungible tokens or NFTs, a non-fungible asset class hosted on a blockchain.
Once the ownership of the NFT is transferred to the purchaser, the purchaser “owns” full rights to the land and can resell, build virtual real estate on it, or lease it, just like in the real world. can.
How do I buy land in the Metaverse?
If you’re interested in buying real estate in the metaverse, consider these three options:
1. Talk to a Metaverse Real Estate Broker
The Metaverse has its own real estate industry, with mortgage providers, brokers and agents that specialize in this space. Digital real estate is still in its infancy, but brokers like Tal and Oren Alexander are finding their own niche.
Previously handling high-end real estate purchases in major U.S. cities such as New York City, the firm is now expanding into the Metaverse.
In December of last year they announced They act as an intermediary for luxury properties within the Metaverse, with location and design being the top considerations.
The two partnered with virtual land developer Republic Realm. recently purchased Sandbox property $4.3 million. Interested buyers can work with such brokers and agents to find and invest in the best Metaverse properties.
2. Consider Affordable Metaverse Mortgages
A second option is to consider a metaverse mortgage. This could prove to be more affordable for regular buyers. Metaverse mortgages are an emerging idea, but only a few companies offer this capability.
Terra Zero is Decentraland, Somnium, sandboxand Solana Portal.
TerraZero now offers the Metaverse Housing loan In the case of virtual land, it is a vacant parcel that can be developed from scratch or rented for profit. real estateor pre-designed landscapes, prefabricated buildings, etc. that serve as ready-to-use environments for events and games.
3. Use cryptocurrencies to buy land in the metaverse outright
This is the easiest way to buy land in the Metaverse and is perfect for small, affordable purchases. To purchase, a customer can:
- Access real estate marketplaces on your chosen Metaverse platform. This will be similar to an app marketplace for your software platform.
- Log in to review land locations and designs, compare prices, and reach shortlists.
- Set up a digital wallet compatible with your chosen Metaverse real estate. For example, land in Decentraland can only be purchased through a token called MANA and requires a wallet to support the transaction.
- Link your digital wallet to your Metaverse account and make sure it contains the specific type of crypto you want.
- Click the buy or buy button to transfer cryptocurrency amounts in exchange for real estate NFTs.
- As a final step, you can work with a company like Metaverse Properties to manage and develop your virtual property for better returns.
If you choose a mortgage, the steps are similar, the only difference is that the mortgage provider retains full ownership of the land NFT until repayment is complete, but does not manage and manage the property during this period. It can be developed.
What are the risks of buying land in the metaverse?
As with any investment, buying land in the Metaverse involves a certain amount of risk. First, you cannot “live” on the land. So the land is purely for investment and value creation.
Second, the profitability of real estate is entirely dependent on location, surrounding developments, and whether the platform is actually adopted over time. Unless you resell the property quickly, it may take some time before you see a return on your investment.
2022 poll According to professional social network blinds, only 13% of tech specialists are buying virtual real estate. However, regardless of risk, there is no denying that metaverse real estate is becoming an increasingly important asset class for investors, and could be important for portfolio diversification in the future.