Sean Finn is an American entrepreneur and founder of the Houston-based real estate investment and development firm, Finn & Company.
Imagine a virtual world that enables you to immerse yourself entirely in it along with your friends, family, associates and others simply through accessing a computer.
Not too many years ago, an experience like this would have been neatly categorized as futuristic. The notion of consumers entering multidimensional digital environments was considered the stuff of fantasy and science fiction. Inconceivable.
But like many other once-theoretical advances in technology, reality has caught up. With the help of human creativity, ingenuity and a lot of work, many formerly unfeasible scenarios have materialized. Think Dick Tracy’s radio watch. Think Star Trek’s communicators. Now think Apple Watch and the iPhone, respectively. What’s the difference?
Today’s Virtual Landscape
We all know of the advances in virtual reality and gaming. We continue to see how quickly the digital universe is expanding in the areas of NFTs, cryptocurrency and all things affiliated with distributed ledger technology (DLT) or blockchain.
We’ve now also heard of the digital environment otherwise known as the metaverse. Immersive digital concepts are restructuring our idea of day-to-day life and manifesting themselves as realities. And these areas of technology—which are surging in growth and momentum even as I write—have also entered the realm of real estate. And they’ve entered in a big way.
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At first, it may seem a little tricky to wrap your head around the concept. But the truth is, not unlike real estate investors who acquire tangible property for passive income and other motives, investors are turning to these virtual parcels of land for hundreds of millions in investments for these same reasons.
Recent Investments In The Metaverse
Forward-thinking real estate entrepreneurs firmly believe in a digital future: locations that exist entirely online and are accessible only by logging on. These same entrepreneurs are already accumulating this land in the same way they do with traditional real estate. Some brokers are already selling luxury real estate plots in the metaverse. And just like traditional investments, when the demand for these plots increases, so does their value. In fact, two of the most popular metaverses by market cap are Decentraland at $5.6 billion and The Sandbox at $4.5 billion.
Virtual real estate and digital plots of land not only bring with them potentially limitless possibilities but are purchasable as NFTs. In this, the metaverse is providing a new way of participating firsthand in virtual reality while also yielding real-world benefits.
In a time when we can now purchase—and earn passive rental income from—parcels of land in the metaverse, the limits once held by real-world geography seem to fade in importance. The metaverse is changing how consumer technology is viewed. Here are just three possible avenues for real estate investors considering the metaverse as the site of their next venture.
1. Digital Storefronts
I anticipate major brands like Gucci having digital storefronts. You’ll be able to enter the metaverse and walk down a virtual Rodeo Drive, shop for—a pair of shoes, let’s say—and just click to purchase them via your preferred payment method, which will already be registered in the system.
2. Virtual Gaming
In terms of gaming, we’re already seeing behemoth brands like Atari in The Sandbox buying up land. Investors will no doubt continue in their eagerness to capitalize on the rapidly growing gaming market, valued already at $138 billion in 2021.
I anticipate that instead of logging on and having only one platform option, the metaverse will allow you to bounce around from potentially unlimited games. You won’t find yourself tied to only one game but rather wield access to an entire universe of options.
And we can’t mention gaming without also mentioning P2E (Play to Earn), a model in which you play for real money. NFTs will also continue to play a role in this as they expand their offerings of unique products that you can own that are protected by the blockchain, which you’ll be able to utilize in the gaming experience too.
In the world of entertainment, we’ve seen such advances this last year as artists Snoop Dogg and Deadmau5 putting on full-fledged concerts in the metaverse. Going forward, I anticipate people will be going to see movies together in the metaverse, enjoying virtual theme parks and other such entertainment activities. Truthfully, I see no end in sight, especially once the hardware has been further developed and grows more lightweight, easier on the eyes and more.
The Takeaway For Real Estate Investors
What does property in the metaverse mean for real estate investors? Well it’s a simple answer: As none of these worlds can be built until people first own the property, that’s no small thing.
These inconceivable ideas of yesteryear, previously observed only in movies or books, are no longer the stuff of fiction. We are experiencing an era of digitized human activity. This is a moment once considered impossible, and it may contain opportunities we’ve never even imagined.
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Platforms like White Sands Metaverse allow you to purchase, design and decorate a new home, but it's completely digital.
Virtual land exists in the virtual world, aka, the metaverse. The land can be used for anything, from an empty plot to a mansion, or even an art gallery. Virtual land is usually bought on an NFT marketplace like Sandbox and Decentraland, and land ownership is recorded on the blockchain that the NFT exists.
The original token is the only one that has real value, and its scarcity is what makes it more valuable and accrues appreciation over time. Metaverse lands become valuable assets just like physical lands, and people can make money by selling them, leasing them or building on them.
It is estimated that Metaverse real estate sales could reach nearly $ 1 billion in 2022, making it an asset class to watch for investors worldwide. By purchasing digital land, you could earn an early-access advantage to what promises to be a fast-moving and high-growth sector.
Less than a year ago, the average price for the smallest plot of land available to buy on Decentraland or the Sandbox – two of the biggest metaverse platforms – was under $1,000. Today it's sitting at around $13,000.
You can buy a plot in metaverse by paying in cryptocurrencies, especially in Ethereum. For the gamified platform, The Sandbox, SAND is the currency whereas MANA is associated with Decentraland. You need to have these currencies to make a purchase in the metaverse.
Metaverse May Be Worth $13 Trillion, Citi Says.
Last year, virtual land developer Republic Realm bought land from video game company Atari in The Sandbox metaverse for a record $4.3 million, the Wall Street Journal reported.
How To Buy Virtual Land In The Metaverse
- Open a Digital Crypto Wallet. ...
- Buy Cryptocurrency. ...
- Select a Metaverse. ...
- Confirm Your Purchase.
The current metaverse market is limited but growing. When a virtual world fails, you don't have anything left to show for it.
Virtual lands are digital spaces or land plots that you can buy, sell, build upon, and explore in a virtual world. Many platforms and blockchain games like Axie Infinity, Decentraland, and The SandBox sold their limited virtual lands to huge companies and other investors.
Like any stock, metaverse stocks can be a promising way to invest in a sector or company you believe has strong growth potential. But there are downsides to investing in metaverse stocks, too, like exposure to risk and a time-intensive research and buying process.
- Buying and holding MANA, the price of which rose by 860.08% in the 12-month period between August 2020 and August 2021. ...
- Buying and selling land. ...
- Leasing or renting out your land.
Ultimately, virtual real estate investing makes it possible to buy physical real estate entirely online, and it has made long distance real estate investing a distinct possibility for many US investors. With that being said, you have to do your due diligence and build a solid network to ensure success.
According to a report from RepublicRealm, which tracks metaverse-related projects, the average price for a parcel of land across the four major platforms doubled to $12,000 during a six-month period last year. Just like in the real world, location on the map can significantly impact property prices in the metaverse.
Inside the Metaverse, space is broken into virtual land segments, or parcels, that can be 'developed' for use, meaning that an individual or a company can build something on the land to attract users such as a concert venue, an art gallery, or an office space.
While defying precise definition, the metaverse is generally regarded as a network of 3-D virtual worlds where people can interact, do business, and forge social connections through their virtual “avatars.” Think about it as a virtual reality version of today's internet.
- ApeCoin (APE) APE is what's known as an ERC-20 token, which means it exists on the Ethereum blockchain. ...
- Sandbox (SAND) ...
- Decentraland (MANA) ...
- Highstreet (HIGH) ...
- Floki Inu (FLOKI) ...
- Metahero (HERO) ...
- Terra Virtua Kolect (TVK) ...
- Star Atlas (ATLAS)
The good news is that metaverse investments are democratic in nature. Anyone can purchase crypto assets or a share of cryptocurrencies without a minimum entry threshold. Unlike real-world economies, there are no geographical barriers and one can invest in metaverse crypto in any region.
Virtual architecture firms are springing up to fulfil these dreams but at a price.
According to Statista, the global metaverse market was worth $38.85 billion in 2021 and will rise to $47.48 billion in 2022 before soaring to $678.8 billion by 2030.
Additional possibilities of earning: Virtual lands also bring in additional possibilities of what can be done using the land in the future, like building art studios, doing advertisements, or just renting it out for others to build on it and get some revenues. There are users who build casino's on their virtual land.