How to Buy Metaverse Real Estate
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The advent of cryptocurrency and non-fungible tokens (NFTs) has led to the emergence of highly speculative assets, in what is called the metaverse, that come with significant risk – and the potential for massive profits. Now, the metaverse is gaining steam as people look to blur the lines between the physical and the virtual. That means that, just as in the real world, buyers have the opportunity to purchase “real estate,” either as an investment or for their own purposes. Metaverse real estate comes in the form of NFTs, and we’ll cover everything you need to know before making a purchase. Consider speaking to a financial advisor before making any metaverse investments.
What Is Metaverse Real Estate?
Broadly speaking, the metaverse is a fully immersive, three-dimensional world with which users can interact – digitally, not physically. That could mean interacting with a landscape, a shopping center or even a gas station.
In theory, you can do just about anything within the metaverse, including daily activities like eating and showering. It’s a bit like playing The Sims, except this time, you’re the one who is a part of the digital world.
That being said, the metaverse is still in its infancy and is not yet fully developed. For the concept to really work, participants must have a single place they can go to access the metaverse.
Buying Metaverse Real Estate
While the very idea of the metaverse is still evolving, investors and developers are piling on as they speculate on the future growth of the metaverse. This has them buying properties and plots of land valued in the millions.
But even if you can’t afford a $450,000 dollar property next to Snoop Dogg, there are also properties available that are much more affordable. Here’s what you’ll need to get started.
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Virtual Wallet
The first thing you will need in order to buy metaverse real estate is a virtual wallet. One easy method is to use MetaMask, a virtual wallet that has extensions for web browsers like Chrome and Firefox. Alternatively, you can use WalletConnect to link your virtual wallet of choice.
Cryptocurrency
Once you have your virtual wallet, you will have to add money to it, which you will use to purchase your metaverse real estate. Land is generally purchased with cryptocurrencies specific to the platform. For instance, you buy a cryptocurrency called SAND to buy land in The Sandbox, and you use the MANA crypto to buy land in Dencentraland. Both of these currencies run on the Ethereum blockchain. Once you have enough of the relevant cryptocurrency added to your wallet, you’re ready to buy metaverse real estate.
Metaverse Real Estate Platforms
In the future, there may be just one place to buy metaverse real estate. But for now, there are a few different platforms; we’ll take a look at buying land in a couple of the popular ones.
Decentraland
As its name suggests, Decentraland is a virtual world designed to let people buy and sell land, estates, wearables and even names. It features a marketplace where you can land plots, which it calls parcels. If you already have your virtual wallet set up, there are just a few steps to buying real estate within Decentraland.
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Go to market.decentraland.org.
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Sign in either with your email or by using MetaMask or Walletconnect.
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Scroll down to Estates and Parcels and find a parcel you want to buy. You can also see a map of all lands for sale by visiting market.decentraland.org/lands. The parcels for sale are shown in light blue.
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Click “buy” on the right-hand side.
That’s about all there is to it. Of course, the decision of whether to buy land isn’t that simple. For example, the land closer to plazas (green) and
estates (purple) will be more valuable. While there could be more developments in the future that pushes up the value of the land in the outlying areas, the plots that aren’t close to popular areas will generally be less valuable.
The Sandbox
The Sandbox is a sandbox game that allows users to monetize virtual assets and gaming experiences. Hence, while The Sandbox is a game, it is heavily focused on allowing people to monetize the content they create for the platform. As a result, it also has metaverse real estate available for purchase.
Buying real estate in The Sandbox only takes a few steps:
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Visit sandbox.game.
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In the left menu, click Market.
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In the “Shop” menu that appears, scroll down to Lands.
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Find the property you want and click Buy.
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You are brought to OpenSea.io, where you can complete your purchase. Link your wallet by clicking the wallet icon in the top menu, on the right side.
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Make an offer. If there is already a high offer, yours will need to buy higher.
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Select your offer duration: three days, seven days or one month.
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If your offer is accepted, you should see it under Offers.
Somnium Space
Somnium Space is an open virtual reality world with a focus on social experiences. The platform is compatible with VR headsets such as Oculus and Vive for an immersive experience. If you want to call Somnium your virtual home, there are several lands available to purchase. Perhaps the easiest way to buy is directly through OpenSea. Here’s how to get started:
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In the left panel, scroll down to Type and expand it.
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Click Land and browse available properties.
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Find the property you want and click Buy now.
You also have the option to make an offer. OpenSea also has features such as price history to give you an idea of whether the property you are viewing is a good deal.
Other Ways to Buy Metaverse Real Estate
Buying land in the metaverse directly from the relevant platform isn’t your only option. Here are a couple of other ways to scoop up some pixelated land.
From a Broker
Just like the physical world, where there are many brokers that facilitate sales for buyers and sellers, the metaverse also has brokers starting to come on board. This has the benefit of helping you navigate the complex world of metaverse real estate. Tal and Oren Alexander, well-known brokers from New York, are now on board with the metaverse.
With a Mortgage
On the topic of budget, metaverse real estate can be just as expensive as physical real estate. Hence, you may not have the cash needed to pay the entire price upfront. Not to worry – it’s now possible to get a mortgage in the metaverse. TerraZero is one such company starting to offer mortgages in the metaverse.
Considering all of the uncertainty around this kind of real estate, it can help to have a knowledgeable professional to help you find the best property to meet your needs – and your budget.
Is Metaverse Real Estate Safe?
Buying real estate in the metaverse is highly speculative. Many of those who are buying land right now are doing so in hopes that the platform where they own land will become the standard metaverse platform. If that happens, their land could skyrocket in value as more people look to get involved. But that is far from guaranteed. Indeed, there are several risks involved with owning this form of real estate. The most obvious one is that any of these platforms could fall out of favor, with growth slowing or even turning negative. That would undoubtedly mean real estate there stops appreciating.
The other scenario is one of endless expansion. In the real world, land increases in value because there is only so much space to build. But in the virtual world, space could in theory expand forever, eroding the value of each individual plot of land.
Indeed, there are many risks of investing in metaverse real estate. Always do your due diligence before adding metaverse assets to your investment portfolio, and never put in money you can’t afford to lose.
Bottom Line
Buying metaverse real estate is a highly speculative investment that has the potential to reward early adopters. There are several platforms where you can buy or rent, such as The Sandbox, Decentraland and Somnium Space. While some properties have sold with price tags in the millions, others are much cheaper. However, buying metaverse real estate is not without risk. Unlike in the real world, where a rise in value over time is likely given the right market, it’s anyone’s guess whether metaverse properties will appreciate. Hence, prospective investors should be aware of the risks and avoid buying with money they can’t afford to lose.
Investing Tips
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If you want to consider investing in the metaverse, you should first speak with a financial advisor. Finding a qualified financial advisor doesn’t have to be hard. SmartAsset’s free tool matches you with up to three financial advisors who serve your area, and you can interview your advisor matches at no cost to decide which one is right for you. If you’re ready to find an advisor who can help you achieve your financial goals, get started now.
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Don’t sink all of your money into the metaverse or other digital investments. Put some of your money in traditional assets like
stocks, bonds and mutual funds to protect your future.
Photo credit: ©iStock.com/Thinkhubstudio, ©iStock.com/GabrielPevide, ©iStock.com/brightstars
The post How to Buy Metaverse Real Estate appeared first on SmartAsset Blog.
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