Location, Location, Location: Investing in Real Estate in the Metaverse

A metaverse real estate concept (Getty Images) For metaverse real estate investors, the reality that property online will appreciate more than property in the real world isn’t too hard to imagine, says Armando Aguilar , a digital asset strategist who made the decision to cash out a portion of his crypto holdings to buy a physical house in October 2019 and later bought a lot in the The Sandbox , an online platform, in spring 2021.

“My metaverse backyard is appreciating more than my real estate,” Aguilar said. “Real estate prices in the metaverse have been insane.” Since making both purchases, Aguilar says the price of his three-bedroom, two-bathroom home outside New York City has appreciated two and a half times, while his plot in The Sandbox has risen 1,400 times its original value.

If the notion of virtual land is new to you, you’re not alone. While a quick scroll through crypto Twitter makes it seem like every major company, brand and celebrity is buying up virtual property, the reality is that relatively few people are partaking in the metaverse land rush. Yet, as non-fungible tokens (NFTs) grow in popularity, the concept of metaverse real estate doesn’t seem so far-fetched. In a recent ” New Rules of Business ” podcast produced by the professional membership network Chief, Janine Yorio , CEO of Republic Realm , a metaverse investment platform, broke down exactly what metaverse real estate investing is for those who haven’t taken the plunge:

“Metaverse real estate is an NFT,” Yorio said on the podcast. “They are a JPEG or [digital file that] points to a specific file that is logged on the blockchain, which is this ledger that tracks who owns [each asset]. Much the same way that if you bought land in a town, you’d go to the town hall and open a drawer to find your deed. Instead, you’re looking at the blockchain.”

On a blockchain, you can look inside people’s wallets, Yorio explained. Every transaction is also the receipt or deed in the cryptocurrency world, unlike in the real world where the two are distinct.

“In the real world, you usually own something, but then there’s paperwork to back it up. In crypto, owning it is part of the transaction. And once it’s in your wallet, your ownership of it is indisputable,” Yorio said.

And this indisputable ownership is appealing. Prices on digital property in metaverse worlds like The Sandbox and Decentraland rose 700% last year, and rapper Snoop Dog built an interactive metaverse (the “Snoopverse”) in which you can pay as much as you would for a physical house to be his virtual neighbor.

But does location matter just as much in the metaverse as it does in real life? Yorio argues that no, it doesn’t when you can simply click where you want to go. Property values can fluctuate based on factors we’re already used to – proximity to desirable locations, prestige, digital “curb” appeal – along with new dimensional limitations and benefits. If they seem entirely new and made up, it’s because they are.

In a digital world in which one click can transport you from a particular neighborhood in the metaverse to another, developers are also getting creative when it comes to constructing the new limits and possibilities of virtual worlds.

“Different platforms are solving it or trying to solve it in different ways,” Huber says. “On one extreme, you have platforms where distance doesn’t matter at all, which is kind of currently the case on Sandbox because you can just basically click in the area that you want to go and go there directly.”

The problem with that, Huber says, is that it becomes harder to determine value based on your proximity to, say, Snoop’s house.

“If the distance is not a problem, then technically you shouldn’t have areas that are much more expensive than others because you can always get anywhere, even if it’s at the edge of the map,” Huber says. “It’s the token that they have,” Huber explains. “So you can ‘walk’ [where you want to go] for free or you can skip the ‘walk’ by taking a teleporter, which is also sold as an NFT.” Some people own the teleporter and can effectively charge people to use it – a nice little side hustle.

The idea of a teleporter NFT may seem a little out there, but that’s the fun of The Sandbox, or of any metaverse. Architects, developers, coders, gamers, designers – and basically just about anyone who loves Web 3 – enjoys building […]

source Location, Location, Location: Investing in Real Estate in the Metaverse