Metaverse Real Estate – Is It Worth Your Attention?
As the metaverse blossoms, virtual real estate is becoming a crucial new part of the market. Brokers and agents must understand how virtual real estate works and how it is set to affect the industry overall.
The term “virtual” is used so commonly today: we can attend virtual events, enjoy virtual artwork, and reach new customers through virtual marketing. And now we have virtual real estate — but what does that mean? How does it function? Can you actually invest in it? This is where metaverse real estate comes into play. The metaverse is an online platform that allows users to interact with one another, play games, launch unique products, provide diverse services, mount events, and (of course) buy properties.
A growing number of users, including companies, are investing in virtual real estate. Just like the real thing, virtual real estate can be purchased, leased, and sold for profit. Still, with the metaverse very much in its infancy and continuing to evolve in fascinating ways, some may wonder whether buying virtual real estate is actually worthwhile.
How is Real Estate Purchased in the Metaverse?
Buying real estate in the metaverse is similar to purchasing NFTs. An NFT (non-fungible token) is a collectible, often unique, virtual product sold and contained entirely within a digital space — digital artwork is a common form of NFT.
Cryptocurrency is used to purchase metaverse real estate, just as with buying NFTs, and once the transaction ends, the buyer is sent a unique blockchain code. This becomes the deed of ownership.
What is the metaverse? It is a revolutionary digital platform in which virtual reality and augmented reality combine to produce a vast synthetic world. The metaverse provides users with an innovative link between the virtual world and the real world they inhabit day after day.
For example, the metaverse platform DecentWorld is presented as both a virtual world and a gaming experience, though it lacks the traditional structure of a video game: beating level after level until you reach the end. Instead, DecentWorld provides users with a chance to secure ownership of the whole streets, with such assets being purchased, traded, collected and sold.
To start investing in virtual real estate, you must set up your own digital wallet for metaverse-based transactions. Digital wallets enable you to perform transactions online without the need for cash, and there are various types available. Metaverse wallets are fundamentally blockchain wallets, though there are some extra functions.
With a metaverse wallet, a user can make payments via a number of cryptocurrencies, encompassing a wide variety of tokens. Users can also use a metaverse wallet for growing digital assets.
How do you take part in a transaction? It is simpler than newcomers may assume it will be. First, you need to set up an account on a metaverse platform (there are plenty to choose from) then connect it to your digital wallet. Once you have completed this process, you can start searching for virtual properties that suit you and, if you find any you like, buy them.
Any user is free to buy digital properties within the metaverse, but it is crucial that you understand your reasons for investing in virtual property in the first place. Ask yourself if it is truly a worthwhile investment or not.
For instance, an entrepreneur keen to market their business virtually or to buy into an innovative technology is likely to get what they need from the metaverse. It also presents fresh investment opportunities for users that may be unable to buy brick-and-mortar properties, as virtual real estate is significantly more affordable.
But for users wary of dealing with new tech and new risks, buying virtual real estate in the metaverse may not be the most ideal option. They might benefit from exploring other investment opportunities instead.
As with transactions in the real world, buying real estate in the metaverse involves property managers and brokers. However, those property managers and brokers do not require a real estate license, nor are they regulated by an authority. With that in mind, it is vital that users buying or selling virtual properties work with people they genuinely trust.
How Much Does Virtual Real Estate in the Metaverse Cost?
Depending on the demand, virtual real estate values can vary significantly, though they have continued to show healthy performance at the time of writing.
Nowadays DecentWorld offers virtual streets wolrdwide from less than $100 to hundreds of thousands dollars per street. Price depends on geographical location of the street, its popularity and other factors.
Here you have another example. In 2017, Decentraland launched its first auction, with a parcel of land worth only $20. But those parcels were being sold for $6,000 by 2021, and this figure had jumped again to around $15,000 by the following year. Impressive when parcels measure 106 yards by 106 yards, determined by the number of pixels within a plot.
As interest in the metaverse continues to grow, the potential value assigned to a piece of virtual real estate is difficult to estimate — and could increase far beyond current expectations. The majority of properties cost from $6,000 to $100,000, but there will be discrepancies from time to time. One of the most lucrative sales occurred when a Sandbox user paid $450,000 for a property next to a parcel owned by Snoop Dogg.
What Impact Will Metaverse Real Estate Have on the Industry?
The real-world real estate industry faces some major changes with the rise of the metaverse. Here are a few reasons why:
- The metaverse offers a bigger pool of investors the chance to invest in real estate, even if it is virtual. They can buy real estate in diverse locations, of different sizes and at varied prices. Users may complete transactions with their preferred cryptocurrency too. Virtually anyone can put their money into metaverse real estate thanks to the innovative accessibility and affordability.
- The metaverse prioritizes real estate location and size over its utility. While these three factors are incredibly important when buying real estate in the real world, the goal of buying land in the metaverse is to either lease it out to others or develop it. That means that utility is less important than location and size.
- The metaverse can be used to host and partake in real-world activities. Users are likely to host many events on the metaverse that have traditionally only occurred in the real world, such as weddings, trade shows, expos, and special occasions. As a result, there may be a drop in demand for physical venues dedicated to these activities in the real world.
Should You Invest in Virtual Real Estate?
At the time of writing, real estate in the metaverse appears to be a fantastic investment — especially as prices increased by up to 300% within four years.
But investing in metaverse real estate carries risks. It can be difficult to predict whether some platforms will become successful in years to come, and both security and privacy may play a part in yielding losses. Users would be advised to proceed carefully and to perform due diligence.
Overall, the metaverse shows the real estate industry in a new light. There has been a lot of success to date, but time will reveal its real viability — as with anything else that’s new.