Lately, the metaverse has burst onto the scene, popping up like a money tree for savvy investors.
One such investment opportunity is the virtual real estate segment. The idea of a digital land where people can gather to live, work, and play with each other is an intriguing one for many. It’s a novel concept that is growing in scale every day.
The prospect of virtual real estate is not too dissimilar to its real-life counterpart. Participants can populate these spaces and find interactive virtual events and activities to take part in both versions, in addition to the ability to liquidate assets.
Let’s look at how real estate functions in the digital world and how you can purchase a virtual space using a crypto exchange.
How Real Estate Works In The Metaverse
The core functionality of metaverse real estate befalls upon blockchain technology, a virtual ledger that keeps track of ownership records in the form of NFTs. These land NFTs, or non-fungible tokens, are unique assets with code and metadata that other digital assets cannot match in value. This, along with additional security measures, allows the trading of assets on the virtual real estate market, ensuring a completely secure transaction.
As the sole owner of a plot, you can choose to rent or sell it at your discretion. Additionally, you have the option of purchasing land adjacent to your plot to expand the property for housing virtual reality worlds, extended UX, and more.
But despite being virtual, there is a limit to how much land one can own in the metaverse. Each land token comes with a set of coordinates that can be combined with adjacent parcels for expansion. These lands can be purchased from the marketplaces of each metaverse, which cover all sorts of real estate opportunities using metaverse-specific crypto tokens.
Why Purchase Land In The Metaverse
A major advantage of purchasing real estate in the metaverse is that the ownership cannot be counterfeited. This virtual land is a unique asset, and it is the rightful possession of the one who purchased it. And since the land is completely virtual, you can make modifications, additions, or adjustments to your heart’s content.
Virtual worlds are a futuristic prospect, one that has garnered the attention of prominent investors. Brands like Adidas partnered with The Sandbox, a play-to-earn blockchain game, where the aforementioned shoe company purchased a plot. You can use your virtual plot as a platform to launch business strategies or promotional campaigns as well, adding utility to the virtual plot.
The Cost Of Metaverse Real Estate
The lowest price of metaverse lands goes into the tens of thousands of dollars, while the top 10 metaverse properties can go well into the millions. Hence, buying virtual land does not come cheap!
Something worth noting is that the market is in a constant state of flux, much like the real-world stock market prices. This means that the land prices can go up and down very quickly, depending on the specific metaverse real estate and how it performs financially.
An example of metaverse real estate market price fluctuation was seen between February and June of 2022, when the average land price fell by about 80%. This led to a reduction in sales as well, causing the trading volume to shrink by 97% in June.
Still, there have been billions of dollars worth of digital real estate sales since their inception, which is only expected to increase in the coming years.
Building A House In The Metaverse
Building a house in a virtual space involves all the intricacies of traditional masonry. Creating something from the ground up takes time and planning, just like construction in real life, with construction implements and labor type being the key differentiators.
As such, there are two ways you can build a house in the metaverse: through hired contractors or by doing it yourself. Here’s a brief overview of each method of virtual house construction.
1. DIY Building A House
If you’ve any knowledge of architecture, you can build a house in a virtual space in no time. Metaverses typically come with builder features that allow you to get as creative as you want without any risk of permanence associated with it.
You don’t have to worry about making mistakes with virtual builders, as any construction can be undone and re-customized per your tastes. Moreover, the safety aspect of the virtual home can be completely glossed over since there is no physical danger to speak of.
The builder feature will only take some getting used to, particularly if you have no experience with 3D software. You’ll have access to all the tools needed to make exactly what you envisioned, but it can become overwhelming very quickly. Remember to start with smaller shapes first to lay the groundwork of your creation, which will slowly become the virtual home of your dreams.
2. Hired Metaverse Architecture Contractors
If you’re using your virtual land for personal purposes, a contractor may not be the best pick. Feel free to experiment to your heart’s content with virtual plots and come up with ideas at your leisure.
But for professional projects and large-scale events, you may want to hire a metaverse contractor to take care of the architecture for you. These design firms will be able to create exactly what you need from your event, right down to the last polygon.
Though it will come at a cost for the structure, the visual impact that the contractors can provide your home may be worth it. The process is quick, efficient, and involves no hassles to speak of, making it the ideal option for creating a space for virtual meetings.
How To Buy Real Estate In The Metaverse
1. Open A Crypto Exchange
Before clicking the ‘buy’ button to purchase the virtual land of your preference, you’ll need to set up a crypto exchange. This will allow you to deposit your local funds and buy crypto tokens.
Each crypto exchange has ways specific to them for setting up and funding an exchange, so make sure to read through each while choosing one. You may look into exchanges such as Binance, Gemini, and Coinbase, among others.
Moreover, it’s always a good idea to use an encrypted email when dealing with crypto transactions, including opening a crypto exchange.
2. Create A Digital Crypto-Wallet
A digital wallet will store your cryptocurrency and make the tokens available to you when needed.
The metaverse platform of your choice will likely only offer you ownership of a particular piece of digital land in exchange for a specific blockchain token. And remember that not every wallet supports the necessary cryptocurrency, so you may want to look into it before making the purchase.
For instance, some metaverse games are on the Ethereum blockchain and only accept payment from Ethereum wallets.
Be sure to send small amounts of your crypto coins first before sending in the full amount. You can also follow the instructions provided by the crypto exchange of your choice for transfers.
3. Search For Information About The Virtual World
Much like how one has to hunt for real estate projects in real life, prospective buyers must pick and choose which land parcel they wish to buy. Metaverse platforms have several areas and districts with virtual real estate properties to choose from, each of which differs in size.
As a prospective buyer, you’ll be looking for qualities similar to what you would when looking for a real home. The size, surrounding area, scarcity percentages, and resource availability all play a part in determining if a virtual land parcel is worth the price. Of course, it being virtual, you’ll have all types of lands to choose from, be it a fantastical wonderland or something grungier.
The surrounding areas will allow you to find ample digital assets to create and develop your land plots quickly and efficiently. Think of it as a fetch quest or a settlement builder simulation.
And if the variety is giving you anxiety, consider hiring a virtual real estate agency to find a metaverse land that’s just for you. Working with a virtual real estate company streamlines the process of finding the right property even further.
Similar to real estate agencies, virtual real estate agencies will facilitate the acquisition of property while providing related services. Typically, these are helmed by pioneers in the blockchain, crypto, and NFT fields.
If you’ve decided to purchase a virtual property, you’re ready to move on to the next step of the process.
4. Create A Marketplace Account For NFT Purchases
The process of creating a sandbox marketplace account is typically straightforward. Simply follow the instructions provided by the marketplace, and you’ll be done in no time.
Metaverse land is available on both primary and secondary marketplaces, so be sure to check where you are purchasing your property from. And before you buy metaverse land projects, check if your wallet has enough cryptocurrency to complete the transaction or not. You’ll be needing it for purchasing the land, as well as gas fees.
Once you’re done setting up the account, all you have to do is click on the Buy Now button or make a bid. In the case of an auction, you will have to wait until the bidding is over before you can complete the transaction.
Next, complete your purchase by following the on-screen instructions. Your wallet will show up in the browser and show you a confirmation of all the charges rendered. Hit the approve button to become the new owner of a virtual world.
Now you, too, can be the host of an event that becomes the talk of the virtual town!
Profitable Returns Through Metaverse Real Estate
Once you’ve gained ownership of a land parcel, you can either rent it to other users or sell it. These methods give out fairly lucrative returns for the amount that you invest in.
Renting your virtual property may end up being more lucrative in the long run. As the land owner, you can earn plenty of passive income from those seeking a plot to function as, say, storage for mining.
And as for selling, if the metaverse platform market value reaches new heights, you can simply sell your property for a huge profit. The value in this step relies largely on luck since the crypto market is inherently quite volatile. So, find the opportune moment and seize it to sell at a high price after buying metaverse land for a low one.
A good way to maximize your income through your virtual land is to know all the ins and outs of metaverse platforms. Look into different marketplaces and check the prices for the land to predict the trajectory of the market. You’ll be able to make an informed decision with minimal risk involved with this knowledge.
How Virtual Lands Stack Up Against Real World Real Estate
Physical real estate ventures involve extensive legal work in addition to labor costs, finances, and physical materials. The process is time-taking and can be very expensive if you intend to use it as a place to host events and promote other businesses.
Something worth remembering is that the building you construct as a part of the real estate project is a place that you can physically visit. Unless its existence breaches a legal matter, it won’t simply vanish into thin air. Your real world land will be yours until the decision to sell it has been made.
Virtual lands connect more people from around the globe, with the ownership rights being virtual spaces being managed by governments. That said, the technology is still in its infancy and will need time to find its footing in the mainstream media. And due to the volatile nature of the virtual market, the prices may suddenly come crashing down.
There is an element of risk with virtual estate that becomes more of a concern the more its data becomes available to the world. Instances of individuals misusing this data to rake in more profits and manipulate digital avatars can cause tangible effects on their real-world counterparts. The technology has the potential to be revolutionary, but as it is now, one must approach it with caution.
Conclusion
As far as investment opportunities go, you can buy metaverse land parcels in a particular metaverse with a few clicks. But, much like real estate projects, you shouldn’t rush into a purchase without doing proper research on the matter.
The possibilities of the metaverse are endless, and it is advancing day by day. Making profits through virtual lands is slowly turning out to be a novel way of making more money.
And as new initiatives show up in the market, you’ll have plenty of creative and exciting projects to choose from in the metaverse marketplace.