If there is one thing that the internet has taught us, it’s that there are no real boundaries when it comes to buying and selling. Whether we’re talking about digital goods or physical ones, if people can make a profit by trading something, they will. The latest frontier for this kind of trading is the Metaverse—a virtual world that exists online and allows users to create their own content and experiences. Virtual Real Estate Metaverse is a biggest chunk of that.
Given the growing popularity of virtual reality (VR), it’s not surprising that the Metaverse is becoming a hot commodity for real estate investors. So if you’re thinking about getting in on the action, here’s what you need to know.
1. What is Metaverse virtual real estate?
In basic terms, the Metaverse is the version of the internet that we are immersed in if we consider the Internet to be something that we look at. The idea is that we will experience the Metaverse as an avatar.
2. How does real estate work in the virtual world of Metaverse?
Unlike many people believe, the Metaverse is not just one entity or thing, it is more like a concept. Many different platforms give access to their own version of Metaverse.
Imagine these platforms like different countries with different landmasses. The size of this platform like countries is limited. When someone purchases a lot of land there will be no other person using that land without the consent to rent. If many people want to own the land then their prices could be higher. The Metaverse currently contains four major platforms, which cover 268,645 hectares of land. It is a Sandbox – Decentralized and Cryptovoxele – Somnium Space.
3. How can you buy or sell Metaverse virtual real estate?
First, you need to decide which Metaverse platform you want to purchase. There are two popular choices: decentraland and sandbox (Decentralized and Cryptovoxele are also a famous alternatives). Almost all of them grant ownership of property rights over an isolated region within it. 101blockchains has a really great summary if you would like to dive deep in both of those platform differences.
The next step would be acquiring tokens to be used as currency on those platforms. Cryptocurrency exchange platform like Coinbase makes it easier to exchange those tokens for dollars or other hard currencies like yuan.
Thirdly trade these tokens from digital wallet via marketplace exchanges where real estate has been put up for sale.
4. Which Metaverse platform is the best to invest in?
Comparing different Metaverse property platforms can be a struggle and you would find that all of the Metaverse platforms offer immersive 3D experiences. But the answer will depend on your personal investing philosophy and risk tolerance.
It can be helpful to see the Metaverse as a whole. Most Metaverse properties is owned by big Four major Metaverse platforms. Decentralized, Sandbox Space, Somnium & Cryptovoxels. These platforms are an important player in the Metaverse economy. They have an estimated 268,445 parcels that are among the highest-priced in the business.
Sandbox currently controls the Metaverse property market, with 63.7% of it. The current average price to buy land in Sandbox is around $10,000 with premium lot sales between 20 to 30k. The Sandbox has generally stayed closer to the average Metaverse while decentraland, cryptovoxels and somnium space have extremely high-profile sales in U.S. currency. Sales volume, as well as selling price are equally critical to determine where to get the best investment opportunity. The following chart shows trading view of all platforms’ preferred currency trading view which can also be an indicator of which way wind is blowing.
5. What are the benefits of owning virtual real estate property in Metaverse?
The digital land market is set to grow at a rapid pace. By purchasing this early-access advantage, you can develop your virtual plot and make money from that investment via renting it out! Imagine creating an entire business around something as simple (and profitable) as gas stations–or anything else for that matter?
There’s one famous case study of a person who is mmaking$16000/month simply by owning virtual gas station real estate. Most of the time, real gas stations doesn’t even make that kind of profit.
Another advantage is Metaverse real estate development will be inexpensive compared to real world properties. Even if you turned to a virtual structure designer for help building a Metaverse property, the input cost is insignificant compared to actual property in the real world. You won’t have to worry about property inspections; there are no limits on what you can and cannot construct (and gravity isn’t a problem there ); and there aren’t any zoning rules concerning who can live where, for how long, or under what conditions.
6. Tell me the best place to buy land in Metaverse?
As with property in real life, location can be influenced in choosing virtual land on the metaverse. Parcels at The Sandbox and Decentraland have increased in importance with large companies such as Atari, Samsung, MillerLite and Nike making a strong presence in virtual spaces. Celebrities like Snoop Dogg, Paris Hilton are also getting very active in the virtual reality world. In the Sandbox, a recent buyer paid $450,000 to live next to Snoop Dogg in a virtual world.
Several early purchasers of nearby properties have raked in huge returns. If you plan on purchasing Metaverse properties, then check out areas of opportunity. Places, where people are likely to gather are more beneficial. Consider plots in areas near or outside of urban areas.
Below are some of the companies that are actively taking part in Metaverse landscape
7. How much is Metaverse real estate worth?
The global market of Metaverse virtual world is expected to grow at CAGR(Compound Annual Growth Rate) of 47.6% for the next five years before reaching $1,527 billion in 2029 from $100.27 billion in 2022 according Global Newswire’s estimate – that’s quite an impressive growth spurt! For comparison, S&P 500 had CAGR of 15% from 2011-2022 according to moneychimp.
8. Is Metaverse real estate a good investment? These numbers may help you decide
Decentraland had its initial land sale in December 2017 at Terraform Events, whose parcel amounted to $20. This parcel was expected to sell for $6000 by 2021. The price has reached $15,000 by 2022, and each virtual Land token is worth around $15,000. This might be just the beginning like the crypto currency boom. The company’s investments in virtual land properties are increasing. Tokens has bought 80% of virtual property company MTaverse Group for $17 millions in October 2021. A record-breaking sale of The Sandbox properties was announced in November for an astonishing $4.2m.
It’s a big virtual property boom that is taking place in a universe totally new frontier: the Metaverse. Imagine an immersive 3D world where people can socialise with friends in real life, play in virtual reality shopping for dinner – all without leaving home. Metaverse itself is composed of many online services which all have their own currency and culture. You can consider Metaverse as an Earth system and platforms therein as different planets.
9. What are some tips for buying or selling Metaverse virtual real estate property safely and securely online?”
Virtual real estate is a new and emerging industry. The risks are unique to this type of transaction, so it’s important that you take precautions when making any investments in virtual worlds. Always make sure that you are dealing with an exchange of information through the platform’s marketplace and never enter into any transaction off-site! If possible get help from an experienced brokerage firm who will charge a commission but provide peace of mind knowing their staff has experience working within these kinds of transactions.
10. What are the risks of owning virtual real estate in Metaverse?
Buying a piece of virtual worlds in the Metaverse comes with its share of risks. To begin with, you cannot ‘live’ on this digital real estate which means it’s purely for investment and value generation; there isn’t an inherent worth like other assets such as stocks or real world real estate because digital properties aren’t backed by anything tangible (not even their own software!). Not to mention they do not have a long track record of steady growth either.
Secondly, there are several factors that will affect profitability. The location, surrounding development and adoption of a platform, all play important roles in determining if returns become reality for investors. It could take some time before we see our investments pay off.
Thirdly and unlikely(but scary) factor, if a particular Metaverse platform goes permanently offline, you can lose all of your properties on that platform.
Overall, virtual real estate in Metaverse offers a unique and exciting investment opportunity. It can be a secure and profitable investment, but it’s important to remember that there are risks involved. Remember to do your research before investing in any virtual real estate and consult with a professional if you have any questions. Are you ready to invest in Metaverse real estate?