Metaverse Real Estate: Why People are paying for Virtual Land?

Although metaverse real estate is relatively new, it has been seeing big investments over the past few months. Investing in it entails risks, but investors are seeking equally big potential and high returns. However, like with any other real estate investment, investors should do their due diligence before in metaverse properties.

That being said, we are here with a comprehensive guide to metaverse real estate. Discover what it is, how it works, and what are the potential risks and gains.

What is Metaverse Real Estate?

Metaverse virtual land or real estate is a parcel of land in virtual worlds. It is all about pixels. However, it is more than that. Metaverse real estate land represents programmable spaces in virtual reality where you can socialize, play games, attend events, sell non-fungible tokens (NFTs), and do countless other virtual activities. The value of metaverse is forecasted to boom at a 31.2% CAGR from 2022 to 2028.

How does it Work?

Just like in the real world, metaverse real estate is all about location. It attracts big spenders. Since real estate has always been a lucrative business, the idea of owning it virtually in the metaverse goes beyond that – at least physically.

According to CNBC, virtual property prices have gone up as much as 500% since Facebook’s transition to Meta. This simply indicates social media’s growing interest in the metaverse space. The key features of metaverse virtual land are:

  • Location is important in the virtual metaverse.
  • Early buyers get value for money and bigger shares.
  • As the demand grows, the supply reduces.
  • There might be an inevitable rise in prices.

Why Purchase Metaverse Land?

Metaverse real estate is booming because it gives you an online place to connect digitally with other people. You can use digitized land to socialize, entertain, or play games. Not only that. There are even virtual plots on metaverse platforms that are bought as NFTs, making them tradeable digital assets recorded on the blockchain. The owner can sell these plots in a secondary market through a third party exchange or the metaverse ecosystem.

Additionally, if you are a creator, you can monetize the content of your property by charging for access or trading your NFTs. Just like in real life, you can develop, lease, or flip metaverse properties. For brands, this is a great way to use their virtual properties to advertise products, organize virtual events, and provide unique customer experiences.

Where to Make Metaverse land Investment?

The major platforms in the metaverse economy are Sandbox, Decentraland, Somnium Space, and Cryptovoxels. These platforms own the highest-priced parcels on the market. For instance, Sandbox currently dominates the market, owning approximately 62% of the entire market. The platform allows you to buy or rent virtual spaces for various uses. You can even monetize these parcels using NFTs and SAND – the utility token of Sandbox.

What are the Potential Risks and Challenges?

As you can see, the metaverse is forecasted to grow tremendously in the coming years. However, it is still far from stable. For some experts, if metaverse platforms go offline permanently, all your land, NFTs, and digital assets will become non-existent.

Also, there’s this issue of valuation. It’s difficult to know how to assign value to a land whose scarcity is artificial. And with its value dependent on cryptocurrencies, real estate is susceptible to volatile conditions. So, before you make any metaverse land investment, learn as much as you can about it.

Summing Up

The present scenario suggests that virtual real estate can flourish the economy, similarly to physical real estate. After all, it is a game of supply and demand. People are increasingly interested in paying thousands of dollars for digital assets. Buying metaverse real estate may seem like a fringe idea, but it would become common – just like cryptocurrencies or NFTs. Still, you have to be cautious before making any such investment!

Thanks for reading so far, and if you have any questions, don’t hesitate to contact us!

FAQs:

Can I buy a virtual property?

Of course yes! Buying a metaverse real estate property is similar to buying an NFT. Your ownership code is on a blockchain and is compatible with the platform you are using to buy the property. To purchase land, you need to link your digital wallet to the platform. You can also buy through brokers and property managers – just like you do with physical properties.

How metaverse real estate can benefit my business?

You can build a variety of properties and make them accessible to other players. For instance, you can develop an art gallery to house all of your paintings. When other users want to visit the gallery, you can rent out the property.

Is it costly to buy the metaverse land?

Just like in the physical real estate market, virtual real estate can vary based on the metaverse platform. While prices are up in the real world, metaverse property prices are low since last year. But it’s a volatile market and could go up.