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How Real Estate in the Metaverse is Revolutionizing Property Ownership

CEO Khai Intela
The world of real estate is no longer confined to physical plots of land. In recent years, a new frontier has emerged - the metaverse. This immersive virtual world is attracting users and investors who...

The world of real estate is no longer confined to physical plots of land. In recent years, a new frontier has emerged - the metaverse. This immersive virtual world is attracting users and investors who are willing to pay real money for virtual real estate. In fact, the metaverse's virtual real estate market is projected to grow by a staggering $5.37 billion through 2026, according to Technavio Research.

Why Should You Purchase Virtual Real Estate?

Investing in virtual real estate offers a multitude of advantages. Not only does it provide a home base in the metaverse, but it also holds the potential for significant profits. As virtual reality technology advances and the metaverse expands, the possibilities for digital property ownership grow exponentially.

Keeping up with the Joneses

By purchasing a plot of virtual land, you can set up a shop, rent it out, or sell it to companies looking to establish a presence in the metaverse. As the demand for virtual land grows, the value of these properties is expected to rise substantially. Just like real-world property investments, technology enthusiasts and investors foresee their holdings in the metaverse appreciating over time.

The corporation next door

Household brands such as Acura, HSBC, and Forever 21 have already recognized the potential of the metaverse and are actively participating in its development. High-profile individuals like Snoop Dogg and Paris Hilton are also joining the bandwagon, further driving interest and pushing prices up. As a result, corporations, banks, and hedge funds are rapidly acquiring virtual real estate, with sales surpassing $500 million in 2021.

What can you do with virtual real estate?

Metaverse real estate manifests as digital land within virtual or online worlds. These parcels offer in-game spaces that can be customized, renovated, or utilized for various activities, such as socializing, gaming, and immersive experiences. Depending on the platform, you can landscape your virtual land, construct structures on it, and even host virtual events like concerts and gatherings.

Owning virtual real estate provides you with a place in the metaverse that you can call home. It serves as a central hub for connecting and interacting with other players. You can also monetize your property by charging for access or use, similar to traditional real estate investing.

Companies, on the other hand, leverage digital spaces to promote and sell products, create unique customer experiences, and establish brand presence in the metaverse.

Where to Find Virtual Real Estate

Several platforms specialize in metaverse real estate. Here are a few popular ones:

  • The Sandbox: A platform where virtual land parcels, known as "LAND," can retail for $5,000 or more.
  • Decentraland: A 3D virtual reality platform built on the Ethereum blockchain.
  • Voxels: A virtual world similar to Minecraft, where property can be owned, developed, and sold.
  • Somnium Space: A player-built 3D virtual world with customizable and monetizable holdings.

How to Buy and Sell Virtual Real Estate

If you're interested in purchasing or selling virtual real estate, you'll need a digital wallet to store and secure your cryptocurrency holdings. Different metaverse platforms use varying types of digital currencies, so be sure to acquire the specific cryptocurrency accepted by your chosen platform.

Steps for Buying Metaverse Real Estate

  1. Browse your chosen metaverse platform, using your computer, VR headset, or mobile app, to find a preferred digital real estate parcel.
  2. Research market prices on the platform or through third-party resellers to get an idea of pricing.
  3. Open a digital wallet that supports the specific cryptocurrency required by your chosen platform.
  4. Acquire the necessary cryptocurrency using real-world funds or existing holdings.
  5. Register for an account with your preferred virtual platform.
  6. Link your digital wallet to the metaverse property platform, select a parcel, and initiate the purchase.
  7. Receive the NFT (non-fungible token) representing your metaverse real estate holding.

Selling virtual property is a straightforward process. You list the parcel for sale and wait for another buyer to transfer cryptocurrency to your digital wallet in exchange for the NFT.

Determining the Value of Virtual Real Estate

The value of virtual real estate is primarily derived from what others are willing to pay for it. Prices can vary widely, with the most expensive metaverse land sale reaching a staggering $4.3 million in December 2021. To gain a practical understanding of the market value, check each virtual world's marketplace or secondary market exchanges like OpenSea.

As with physical real estate, the desirability and uniqueness of your virtual property will influence its price. The metaverse platform also plays a role in the price variation. Parcels in high-demand platforms like Decentraland can sell for $10,000 or more each.

Risks Associated with Virtual Real Estate

While purchasing real estate in the physical world tends to be a sound investment, virtual real estate carries more significant risks. Pricing can fluctuate dramatically, and the value of cryptocurrencies can be highly volatile. Additionally, digital real estate platforms may operate under different rules and regulations, which could impact the ownership and value of virtual property.

Furthermore, the future of virtual worlds is uncertain. If a virtual platform shuts down, the property held within it could become worthless. The success of the metaverse and the demand for virtual real estate hinge on the ongoing interest and participation of users and players.

Buyer Beware

Exercise caution when navigating the world of virtual real estate. While the value is determined by market demand, virtual properties lack the backing of physical land or dwellings. Owners enjoy limited regulatory protections, and the market can experience wild fluctuations. If you're considering investing in virtual real estate, conduct thorough research and approach with care.

With the rise of Web 3.0, the popularity of virtual real estate is expected to continue growing. However, as with any investment, what goes up in the virtual realm may eventually come down.