Real estate has always been a trusted investment option for most of us. Investors have doubled, tripled, quadrupled and attained profits even beyond that in real estate. Until now real estate was limited to physical properties-houses, land, apartments, etc. present somewhere in the real world. But with technology disrupting almost every sphere of our lives (for betterment mostly), digital real estate has become the new buzzword.
This guide tries to clear the air around “digital real estate”.
We will begin with- what digital real estate is, what is Metaverse, who are the top players in the digital real estate space, how to buy digital real estate, is digital real estate legit, pros and cons of digital real estate and finally conclude my thoughts on whether or not to invest in digital real estate.
Table of Contents
What is Digital Real Estate?
Digital real estate refers to any asset class available digitally or on the internet.
It can be a website, a domain, a software application, or a virtual land in the Metaverse.
Please understand that digital real estate is not limited to Metaverse.
As seen, it can refer to any asset that resides digitally in the internet, which you can leverage to earn profits.
However, with the advent and popularity of the concept of Metaverse and the introduction of its first examples like Decentraland and Sandbox, the popular meaning of digital real estate is the virtual lands, virtual conference rooms, marketplaces, etc. that are hosted on Metaverse.
This guide will discuss the digital real estate hosted on Metaverses.
What is a Metaverse?
Read a detailed explanation here.
A Metaverse is a 3 dimensional virtual and online space in which we participate as our Avatars using a VR Headset and can simulate almost all real-world activities like buying and selling, playing games, participating in concerts, socializing, and more one can think of (checkout this one).
Digital Real Estate: How to generate profits?
Digital real estate is similar to physical real estate in terms of the various methods you can generate profits.
Some of the popular ones are:
- Buy and sell
- Renting a virtual property
- Flipping-buying a virtual property, add new and enhanced features and sell it at a higher price
- Renting for virtual conferences, music concerts and events.
- Trading
There can be even more which will depend on how much can you innovate.
Digital Real Estate: Some Statistics
Across the top ten virtual platforms or metaverses, over $1.9 billion of land has been already sold (Source)
But wait, we have seen volatility in the average prices. The average price of land was $16,300 in February 2022 which fell drastically to $3,300 in June 2022, down nearly 80 percent. (Source)
Hence, we can notice that though there has been quite an action in the space, the market is volatile and one should only usher in at their own risk appetite.
Digital Real Estate-top ten virtual platforms (metaverses) to buy
Otherside
Decentraland
The Sandbox
NFT Worlds
Metroverse Genesis
Worldwide Webb
Voxels
Arcade land
Treeverse
Somnium Space
Digital Real Estate: Pros and Cons
Pros
Growing popularity of the Metaverse platforms:
The popularity of Metaverse is growing day by day, with tech giants (like Meta, Microsoft, Apple, Amazon, VMWare, and more) taking serious interests and pouring in huge investments into the concept.
Metaverse will change the way we use and see the internet of today.
Investing in digital real estate hosted on these Metaverse platforms in 2023, can give you a first mover advantage.
You can buy 3D virtual spaces developed for meetings, concerts, holidays, family gatherings, games, e-commerce, and more.
It will have a virtual replica of almost all real-life activities we perform daily.
As the concept gains more traction and becomes mainstream, you can potentially reap in huge profits by selling and renting.
It is a new-age real estate investment in which giants from Silicon Valley and Hollywood are pouring in their early and huge investments.
Let us scan some early yet popular investors in digital real estate space.
Snoop Dogg is currently developing “Snoopverse” on the Sandbox, a virtual reality platform geared towards gaming and entertainment.
This was followed by a fan named P-Ape purchasing a digital plot of land within the Snoopverse for $450,000.
Tokens.com, a crypto investment firm purchased purchased a digital land on Decentraland for a whopping $2.43 million. Another plot on Sandbox got sold for $4.3 million.
Flexibility of creating a multitude of structures:
Once you own a digital piece of land or a virtual space, you normally get the opportunity to develop it further, add features you want to attract visitors or users.
Example you may develop a virtual office space or a concert place, a stadium for hosting digital games, a mall for shopping digital stuff and more you can think of.
The thing is you can hire developers to add nearly any feature you want to make your virtual space stand out in the market.
For example, think of creating a virtual music concert space that also has a marketplace to buy branded or merchandise owned by celebrity music personalities.
Snoop Dogg is making Snoopverse-a gaming and entertainment space.
It boils down to who gets into it first. If you get the right property in time and create a brand out of it, you would be able to reap in the profits.Of course, replicas can be constructed, but the original stands tall of all.
Cons
Scarcity:
Unlike real estate in the real world, digital real estate is not scarce. Theoretically it can be created as much as we want to.
Once a virtual land or game gets popular, replicas can be created by another competition in anticipation of getting the same or comparable footfall in the space.
However people tend to gravitate towards the original. For instance, there are multiple replicas of the angry bird, but the original tends to stay tall out of all the other duplicate options.
The Off Button
One of the biggest risks with any digital property is the risk of shutting off the server.
Think of any digital asset, like your blog, your instagram channel, youtube channel, or any virtual land in a Metaverse.
If tomorrow the respective server shuts off, it will make you lose your digital asset.
However, legal actions can be taken against such instances.
But with the more unknown and new providers the legal due course of action becomes more difficult and also justice unattainable.
For known brands in the digital world, like WordPress, The Medium, Shopify, these things rarely happen and all proper sort of insurances (at times) are in place to protect you from probable loss, when they shut down their server.
So, the best thing to do is to stick to the established players in Metaverse like The Sandbox, Decentraland, NFT Worlds, Metroverse Genesis, Worldwide Webb and Voxels.
How to buy digital real estate
Now we will check on “how to buy digital real estate”?
The digital real estate we are talking about here is the virtual land or virtual farmland or any sort of that virtual place you can buy in a Metaverse.
We are not talking about digital assets like websites, domain names, youtube channels, etc. here.
Some of the popular platforms where you can buy digital real estate are : Decentraland, Sandbox, Axie Infinity or opt for a third-party platform like OpenSea or Rarible.
Let us proceed step by step on how to buy digital real estate.
Step 1-Get a cryptocurrency wallet
The first thing you need when you decide to invest in digital real estate is a cryptocurrency wallet.
This is due to the fact that you need cryptocurrencies and tokens to buy digital real estate. You cannot buy digital real estate using fiat currency like the US Dollar.
A cryptocurrency wallet is either a computer/mobile application (MetaMask, MyEtherWallet) or a pen-drive-like hardware (Trezor, Ledger Nano) that can store your cryptocurrencies and tokens.
The hardware wallets are much more secure and trusted than a software wallet.
You can connect your cryptocurrency wallet to a Metaverse platform and make payments for buying your digital assets.
If you sell or charge rent for your digital real estate, it will also get credited to your cryptocurrency wallet.
Further when you want you convert your cryptocurrency holdings to fiat currency using one of the cryptocurrency exchanges.
Some popular Exchanges are Coinbase, Binance, and Robinhood.
Visit Coinbase
Visit Binance
Visit Robinhood
When choosing cryptocurrency wallets, it is always wise to go for a hardware wallet like Ledger and Trezor. These wallets are much more secure than the software or hot wallets.
This is due to the fact that, hardware wallets are offline and hence are not susceptible to any online attacks or malwares, which may take all your crypto assets.
Buy Trezor Model One
Buy Trezor Model T
Buy Ledger Nano
Tip: When setting up your wallet, please save your password and seed phrase securely in a piece of paper and keep it in a locker or some safe place. Keep your Private Key and Seed Phrase safe. In cryptos please remember that you and only you own all your funds.
Step 2: Choose a buying platform
You can buy digital real estate either directly from a Metaverse platform like Decentraland, The Sandbox, Axie Infinity or opt for a third-party platform like OpenSea.
Read 11 Best Metaverse Projects in 2023
You can simply navigate to the “Marketplace” sections of these Metaverses to select and buy the digital space of your choice.
If you are a first time user then a third party platform like OpenSea and Non-Fungible.com are recommended.
These third party platforms share the prices of the digital real estates in the fiat currencies apart from depicting the prices in cryptocurrency.
They also prevent you from jumping on multiple platforms for a piece of digital real estate.
Contrary to this the Metaverse platforms like Decentraland and Sandbox give you a better sense of the digital property. You will get to know the various attributes and also the neighbours of your digital property. But for beginners the third party platforms like OpenSea and Non-Fungible.com are recommended.
Step 3: Fund your cryptocurrency wallet
Depending on which platform you choose, you will need the native cryptocurrency of that very platform to buy digital real estate there.
For example, if you choose Sandbox (where Snoop Dogg purchased Snoopverse), you will need its cryptocurrency SAND. For Decentraland you will need MANA.
You can purchase these native cryptocurrencies at any of the cryptocurrency exchanges like Binance and Coinbase.
Purchase the native cryptocurrency and transfer them in your cryptocurrency wallet.
Step 4: Negotiate and buy your first digital real estate
Mostly the platforms will allow you to quote your rate for buying digital real estate. Or it is a non-negotiable rate. Depending on the deal you can select and buy the digital real estate of your choice.
| Metaverse Platform | Native Cryptocurrency |
| Decentraland | MANA |
| Axie Infinity | AXS |
| The Sandbox | SAND |
| Enjin | Enjin |
| GALA | GALA |
| High Street | HIGH |
| Meta Hero | Metahero |
| Red Fox Labs | Two separate tokens VFOX and RFOX |
| Bloktopia | BLOK |
| Star Atlas | ATLAS |
| Theta Network | THETA and Theta Fuel |
Digital Real Estate for beginners
You can buy digital real estate either directly from a Metaverse platform like Decentraland, The Sandbox, Axie Infinity or opt for a third-party platform like OpenSea.
Read 11 Best Metaverse Projects in 2023
You can simply navigate to the “Marketplace” sections of these Metaverses to select and buy the digital space of your choice.
If you are a first time user then a third party platform like OpenSea and Non-Fungible.com are recommended.
These third party platforms share the prices of the digital real estates in the fiat currencies apart from depicting the prices in cryptocurrency.
They also prevent you from jumping on multiple platforms for a piece of digital real estate.
Contrary to this the Metaverse platforms like Decentraland and Sandbox give you a better sense of the digital property. You will get to know the various attributes and also the neighbours of your digital property. But for beginners the third party platforms like OpenSea and Non-Fungible.com are recommended.
