In the last 20 years, the internet has developed at a lightning-fast pace, and has pushed the boundaries of what we once thought to be possible.
Although the internet has been around for decades, in a more recent time period, the internet has brought a new form of investment opportunities in the fashion of buying and selling investment properties in the metaverse. If your head is spinning trying to make sense of this investment option, you’re not alone. We’ll distill this complex topic down to its simplest form, and explain how, and why, you may be interested in buying an investment property in the metaverse.
Where To Buy Investment Property In The Metaverse
The metaverse has numerous worlds, and each world has its own purpose, advantages, and disadvantages. Let’s briefly touch on the main metaverses below.
The Sandbox – The Sandbox is another metaverse that looks and feels like a video game. The Sandbox has a reputation for being more of a fun/playful metaverse, and various games exist within the actual metaverse. Nonetheless, you can purchase property in this metaverse and interact with the various markets.
Decentraland – Decentraland is one of the biggest and most popular metaverses. Decentraland hosts concerts, meetings with friends, fun activities, and residential living areas. Considering the popularity, property appreciation is on the rise as there is only a limited amount of space.
Somnium Space – Sonium Space is another metaverse, which is a crowdfunded virtual reality world. Individuals or businesses can own land and the virtual reality world is used for people to interact, socialize, network, play games, and participate in activities. Somnium Space has its own currency and various economic benefits.
What Is an Investment Property
Before fully understanding how to buy an investment property in the metaverse, let’s take a step back and review what an investment property is.
An investment property is real estate an investor buys with the intention of making a profit. Instead of looking at the real estate as a place to live, the investor looks at the property as an opportunity to rent it out to tenants and collect consistent cash flow, or, rehabilitate the property and sell for a profit.
Investing in real estate is of great interest for investors for numerous reasons. One of the most common reasons is because real estate is finite. There is only a certain amount of land in the world, which circles back to the number one rule in economics – supply and demand.
What Is the Metaverse
The metaverse is a term that is being used more frequently today. After all, in October of 2021, Facebook changed its name to Meta. But what is the metaverse? Simply put, the metaverse is essentially a virtual parallel world to the physical world we live in today. It is a digital universe that combines augmented reality, virtual reality, and video streams.
The metaverse is still being developed, but giant technology companies are involved in it and strongly believe in the near future, anything you can currently do in the physical world will be possible in the metaverse. The metaverse is also its own economy. Users can buy/sell/trade currencies, NFTs, real estate, or businesses all within the metaverse.
What Is an Investment Property in the Metaverse
Now with the definitions and brief explanations completed, let’s explore an investment property in the metaverse. The metaverse is made up of numerous “worlds”. For example, you could buy land on The Sandbox, Decentralands, Somnium Space, Citydao, Aetheria, and DeFi Land. Like planet earth, land on those “worlds” is limited.
Considering the expectation that the metaverse is the future of interacting, socializing, virtual reality, and video conferencing, and the fact that there is limited space on these “worlds”, owning real estate on these worlds is considered an investment. Property and land is appreciating at a rapid rate in the metaverse. In fact, it’s not uncommon for properties to sell for millions of dollars in the present day.
An investment property in the metaverse is not much different from an investment property in the real world. Basic fundamental real estate principles still exist in the metaverse.
How to Make Money on Metaverse Land
The same principles apply to real estate on the metaverse. You can make money in two main ways:
- You can rent your land to individuals or businesses for a variety of reasons. Businesses may want to set up shop on your land because it’s in a populated highly desirable area. Or, someone may want to rent your land to live it in or host a concert/event.
- You can also make money by buying and holding your property. As mentioned above, properties have seen incredibly quick appreciation in just a few short years. As more and more things become possible on the metaverse, more and more people are getting involved. Supply and demand are causing prices to soar!
How to Actually Buy an Investment Property in the Metaverse
There is no doubt, purchasing real estate presents risks. That risk is multiplied when investing in the metaverse considering the uncertain future state. With that said, the great risk can bring the possibility of fantastic returns. If you’re interested in purchasing an investment property on the metaverse, here’s what you’ll need to do:
- First and foremost, you’ll need to determine which “world” you’ll want to purchase land in. The Sandbox and Decenterland are some of the biggest worlds, but there are smaller options out there, such as Somnium Space.
- Once you’ve analyzed and determined which metaverse world is right for you, you’ll need to visit the land’s marketplace. For example, consider Decentralands marketplace.
- You’ll need to search for parcels and/or estates, and see which properties are currently for sale that fit your budget.
- Once you’ve drilled down on the properties that are for sale that fit your budget, it’s now time to analyze which property is best suited for you and your goals. Approach this with a similar approach to traditional real estate. Is the parcel in a desirable location? Is the parcel by a road, teleportal, beach, shops, etc? All of these variables can help drive up, or down, the value of your property.
- Once you’ve found the perfect investment property, it’s time to make the purchase. You may need to use a cryptocurrency to fund this transaction, but all of that is typically possible all within the marketplace.
Is an Investment Property in the Metaverse Right for You?
Investment properties, either in real life or in the metaverse, need to be analyzed. These properties come with various risk and return possibilities, and each individual has their own willingness to accept a specific amount of risk.
Technology giants are making sure the metaverse will be a critical piece in all of our futures. If you believe in that vision, investing in a property now will allow you to get involved in the early stages of the metaverse. There is certainly a lot of money to be made if you buy the right property at the right time. With that said, considering the uncertain future, there is a great deal of risk involved in doing so.
If you are thinking of making a large investment in the metaverse, you may want to consult with a financial advisor. A financial advisor will help you determine how much money you have to invest in the metaverse while keeping more traditional investments balanced as well.