What Could Real Estate Look Like in the Metaverse?
In December 2021, someone paid $450,000 to be Snoop Dogg’s neighbor. That could be a bargain in Long Beach, where the median sale price for a home is $785,000. However, this property isn’t in California. It’s in The Sandbox, a blockchain-based decentralized metaverse. Sometimes considered the next iteration of social media or Web 3.0, the metaverse is a virtual world where real people interact through avatars.
If the thought of spending money on a few pixels seems dubious, you’re not alone. However, transactions are taking place in the metaverse even as we speak. If you’re interested in how cryptocurrency in real estate works, it may be worth your time to explore the metaverse and learn more about what happens there.
How Do You Buy and Sell Real Estate in the Metaverse?
Before you can buy or sell real estate in the metaverse, you need an online wallet with the cryptocurrency used in the metaverse where you want to buy. For example, you need SAND to buy and sell in The Sandbox or MANA to buy or sell in Decentraland.
Each metaverse has a marketplace where you can purchase products. In some ways, it’s like the Multiple Listing Service used by real estate professionals in the physical world. There you can view all of the available properties and see their asking prices. After you choose a plot, follow the prompts to complete the transaction. As an alternative, you also can buy real estate through a developer who specializes in such deals.
When you own land in a virtual world, you have complete control over what happens to it. You can leave it vacant or build a skyscraper. You can block all access to it or let others freely roam. The possibilities are seemingly endless if you have the time and money to put your vision into practice.
How Do You Value Real Estate in the Metaverse?
Just like in the physical world, the value of real estate in the metaverse depends on how desirable it is to other people. Location is still one of the most important considerations. Prime property located near plazas and districts tends to be more valuable than parcels in the outskirts of town. The person who paid over $400,000 for a set of pixels near Snoop Dogg probably would not shell out the same amount of cash for a spot next to a complete stranger.
How Risky Is Buying Land in the Metaverse?
Real estate investing in the metaverse is highly speculative and risky, like buying cryptocurrency. As long as people are willing to pay for it, virtual real estate can potentially appreciate and bring you a profit down the road. The major platforms have agreed to limit the number of digital parcels available, using scarcity to protect value.
At the same time, these assets could plummet overnight, leaving you with virtually worthless pieces of property. For this reason, many investors prefer to view this type of investing as a hobby and enjoy the process of engaging and interacting with others in the virtual worlds.
Building a Real Estate Investment Portfolio
If you’re not yet ready to buy digital assets, real estate investing in the physical world continues to be a lucrative option. At OpenAiRE, our team keeps up with the latest technology in the real estate market and brings that expertise to help our clients make effortless ownership possible as they build their portfolios.