What Is Digital Real Estate? Ultimate Guide
With the world of virtual reality exploding, digital real estate investors are quickly snatching up the virtual real estate market in hopes to capitalize on it in the future. This post will discuss the various virtual platforms that can be used to create passive income from real estate rentals and other digital land grab opportunities.
Digital real estate is a digital asset you can own and monetize. Digital real estate assets are acquired on platforms such as Decentraland, Cryptovoxel, and Sandbox. However, e-commerce stores and blogs are also types of digital real estate. Recently, investors are snatching up metaverse real estate, boosting this multi-million dollar industry.
Big Names Are Buying Digital Real Estate
Not long ago, PriceWaterhouseCoopers Hong Kong purchased land on the Sandbox platform. The consulting company made itself the initial member firm to purchase digital land. Even Celebrity Snoop Dog has also joined the party and purchased virtual ground on the Sandbox for $450,000, called the Snoopverse.
A physical real estate company, the Metaverse Group, is also getting in on the action with their purchase of a Decentraland plot for $2.43 million.
There are a variety of types of digital real estate. Most people think of the metaverse regarding digital real estate, but it must be stated that digital assets come in many forms. Digital real estate includes domains, websites, apps, and digital products.
What Is Digital Real Estate Really Worth?
The amount digital real estate is worth can vary wildly. Like a physical piece of real estate, you can purchase land with prices based on various factors. You can hold the asset and allow it to appreciate in value naturally or you can apply forced appreciation by adding value.
A quality piece of digital real estate that is well-designed and offers a lot of value is worth far more than the initial startup costs.
Digital Real Estate – Real World Examples
Some recognizable forms of other real estate are e-commerce stores, domains, apps, blogs, NFTs, and affiliate sites. A newer form of digital real estate is the variety of plots of land available for purchase on different platforms.
Some of the larger platforms on which you can purchase digital land include Decentraland, Cryptovoxels, Somnium Space, and The Sandbox.
How Much Money You Need To Invest In Digital Real Estate
More developers and investors are taking advantage of the early-stage opportunity of owning digital real estate. Unfortunately, this is causing an increase in the cost of purchasing digital lands, and as of this writing, purchasing land in Decentraland will cost you approximately 4700 MANA or $13,000.
If you’re interested in the Cryptovoxels platform, land here is available for purchase through OpenSea and averages 2.57 ETH or about $7,800.
What Is Decentraland?
Decentraland is a blockchain-based, 3D, decentralized virtual world where you can meet, chat, play games with other players in real-time, and buy and sell land. It’s a web 3.0 universe that’s best experienced with the digital wallet Metamask.
Decentraland allows anyone to establish whatever their imagination can generate onto a plot of land for everyone in the world to experience.
Many things have been built in Decentraland, including games, office space, homes, and museums. Nearly all in-game items can be bought or sold for actual money. Decentraland was first established in 2017 but has grown considerably in popularity and value since then. The in-game currency is called MANA.
Decentraland is a virtual world built on top of Ethereum. It’s a decentralized virtual world where people can own and develop virtual land as digital landlords. Alternatively, you can wander around and explore what other users have created. The landscape consists of interactive objects or static 3d scenery.
The Digital World Inside Decentraland
Decentraland is filled with art, games, and events that attract thousands of users. All of Decentraland is divided into fragments called parcels. Each parcel measures 52 ft by 52 ft. A parcel is the smallest measurable piece of land that you can own. It’s possible to hold several parcels next to each other to form an estate.
There are larger plots of land dedicated to a specific theme called plazas. One of the most notable plazas is Genesis Plaza, where every avatar initially spawns on the map.
Location does affect the price of land. The closer your land is to a hub of activity, and the larger the plot, the more expensive it will be.
All of the land is represented by the parcel’s x and y coordinates and corresponding ERC 721 token on the blockchain. All land has some degree of scarcity, increasing the demand for this collectible. Each token is unique and cannot be equally exchanged for another token.
There are about 90,000 total plots of land in this virtual world.
You don’t need any technical skills to design your plot of Decentraland as you see fit. There’s a highly intuitive drag and drop interface where you can create anything your imagination can come up with.
The entire virtual space is owned and governed by its users. A Decentralized Autonomous Organization, or DAO for short, governs Decentraland. Everyone in the community is free to vote on proposals they want to adopt. MANA is the token that fuels the economy of Decentraland.
If you’d like some unique clothes to dress up your avatar with, you can find them in the marketplace. Community members have created a variety of wearables to dress up your avatar with. You can quickly jump to any location that piques your interest by opening the map.
You can also type “/goto” followed by coordinates to visit a specific location.
What Is The Metaverse, And How Does It Work?
The metaverses are actively being built and transforming the internet we know today. While in its infancy, the Metaverse is actively impacting how we interact with one another.
For example, Microsoft Mesh is creating a blend of mixed-reality and augmented reality for Microsoft Teams. The U.S. Army is also developing augmented reality technology compatible with the Hololens 2.
The most identifiable characteristic of a metaverse is your 3D digital avatar. There are many games that contain a universe of customizable avatars, including Roblox, Minecraft, Fortnite, and even World of Warcraft. However, the previous games are not decentralized and do not have an in-game cryptocurrency.
Facebook’s Metaverse will support users with Oculus VR and augmented reality headsets.
The metaverse is attracting some of the sharpest minds from the realms of computer science and neuroscience. Part of the attractiveness of metaverse development is its open-sourced nature, user-controlled keys, and community-owned and generated networks. As a result, developers are actively creating more spaces to shop, play, and interact.
The Metaverse is opening a new way to interact with the web that isn’t owned by a single entity. Decentralization is one of the most essential parts of understanding the metaverse. This new technology, specifically NFTs and the blockchain, allows us to verify ownership reliably.
For example, Nike patented their digital goods with blockchain technology. It’s a good idea to read the whitepapers of different types of technology and connect with the community on Discord or Telegram to get a full grasp of the project.
Metaverse worlds are quickly becoming where many people choose to spend their time. As a result, more people are gaming, meeting, and socializing in digital spaces.
What Is An NFT?
An NFT is a nonfungible token, which means it cannot be replaced. They are used for digital collectibles such as games, virtual items, and other assets. The Ethereum blockchain allows developers to create smart contracts that use these tokens to represent ownership rights.
What Is A Digital Plot?
A digital plot of land is any parcel located in any one of the metaverses. Similar to physical property, digital plots are simulated areas located in virtual reality.
How To Get Started Investing In Online Real Estate
If you’re interested in purchasing your own digital real estate, follow these steps to get the most for your money.
Preparing To Buy Land
It’s best to research the different virtual lands first, so you know what type of currency you’ll need to purchase land. For example, if you want to buy a plot in Decentraland, you will need MANA to make the purchase.
To purchase land in Somnium Space, you will need a Metamask wallet that contains Ethereum. Each platform is a little different from the next, but they all operate on the same basic premise that you will need some initial currency to begin purchasing plots of land.
Searching For The Right Property
Your land parcel’s proximity to popular areas will affect its value. In Somnium Space, owning properties next to each other allows you to build higher in this virtual world and is referred to as an Estate.
Buying, Holding, Or Selling Your Land
Decentraland
Ripio Credit has partnered with Decentraland to offer mortgages. You can take out a mortgage on land by paying 10% of the parcel value. The “Request Mortgage” application is available by clicking on a parcel on the map. You can purchase properties in Decentraland in the marketplace from other users. Land sales occur in the same market.
Somnium Space
Somnium Space is a virtual reality world built on Salona and Ethereum Blockchains. All Somnium space parcels are NFTs or ERC 721 tokens. The land in this virtual space is available for sale on the OpenSea marketplace.
Land prices are affected by proximity to popular parcels, proximity to the waterfront and central waypoint, and of course, the size of the lot in question.
You can build something exciting on your land to cause appreciation and value should you decide to sell later. Each world is customizable and programmable to your liking. You can create portals to enter the world by dropping a blockchain token onto the parcel.
Somnium space assets can be purchased on the FTX marketplace. You can buy, sell and store Somnium space on the official market, Gemini, Uni swap, and OpenSea. You also have the option to monetize your land by renting parcels.
Cryptovoxels
Cryptovoxels land is currently selling for the lowest going rate of 3.03 ETH or about $9,792. The primary market of Cryptovoxels is available on their website, with a secondary market on OpenSea. Cryptovoxels also include the feature of renting land.
Like other worlds, each parcel of land is an ERC 721 token or NFT. You need a Metamask wallet to buy land in Cryptovoxels. You don’t have to own any land in Cryptovoxels to play. However, you officially own any land you purchase in the game.
The value of land is determined by build height, proximity to favored locations, and proximity to the center of the world.
5 Websites To Visit To Buy Digital Real Estate:
7 Ways To Make Money With Digital Real Estate
Owning digital real estate can give you several options for generating income. Here we expand on some of the more common ways to profit from your virtual land ownership.
1. Buy Land
If you believe that the value of your parcel will increase due to the popularity of the platform, you can always buy and hold. Land value can increase because large, well-known companies buy digital real estate.
Atari, Steve Aoki, the Smurfs, and other well-known companies & numerous celebrities have purchased land in the Sandbox, which stimulates the popularity of virtual worlds.
The country of Barbados will establish a virtual embassy in Decentraland in 2022. This is the first country to take this sort of action in the metaverse.
If you purchase land, it may naturally appreciate value as metaverses’ popularity increases. You can encourage the value of your land to go upwards by creating interactive virtual spaces where people enjoy spending their time and money.
The more foot traffic you have on your parcel of land, the more you may be able to charge for advertising on your lot. Every month, you can collect cryptocurrency from advertisers who want to market their product, service, or land coordinates.
Since the property you purchase is entirely yours, you can choose to sell at any time and collect your investment and hopefully profits too.
2. Virtual Jobs
It’s possible to get a job in the Metaverse of Decentraland. The company hires for many jobs, including casino hosts, part-time trainees, and technical support. Hours and rates vary for each position, with trainees making $200 per month.
Pay increases along with the responsibilities of the job. After being a trainee, you can move up to a part-time position which pays $700/month for about 24 hours per week. Full-time workers can make $1300-$1500 per month.
Hosts send prizes to players during casino and poker events, monitor Discord and Telegram, and other duties. There’s also a hiring section in the Decentraland Discord.
In addition, there’s a virtual hiring fair at coordinates 12, 51 in Decentraland.
3. Play To Earn
You can visit play to earn games in Decentraland, where you’re able to play games in exchange for points. You can then use the points to get NFTs or wearables to keep or sell to other players.
If you’d like to try your hand at blackjack or other casino games, you can visit the Tominoya Casino located at -120,136 in Decentraland.
By owning a casino NFT, you are entitled to 30% of all profits generated on that parcel of land every month. The money is sent to the crypto wallet that contains the casino NFT. The Tominoya casino offers blackjack, roulette, and slots.
4. Hold Tokens, Also Known As “Hodl”
You can generate some profit by holding the $DG token of Decentral Games, an online gambling license holder. All of the money generated by the casino goes into a treasury. Purchasing a governance token allows you to have some voting input on how the funds in the treasury are used.
For example, if the vote passes, the governance token holders could build a new poker room and redistribute the profits back to the token holders. By staking your governance tokens, you can earn 9.07% staking APR as of this writing.
5. Digital Property Management
Metaverse properties offer property management services of digital real estate. Managing a real estate investment by yourself may be time-consuming so they help facilitate potential income on your property by renting your digital real estate to clients and collecting the rents.
By investing in a real estate business, their services span across the metaverses, including Upland, CryptoVoxels, Somnium Space, Decentraland, and Sandbox. Metaverse Properties offers marketing services to get the word out if you have a digital plot of land that you’d like to advertise.
6. Buy The Index
If you’re unsure which metaverse you’d like to capitalize on, you can buy a little piece of all of them through an index.
The Metaverse Index (MVI) contains cryptocurrencies linked to several metaverses; MANA, SAND, ERN AXS, ENJ, WAXE, and many others.
The index allows you to purchase a broad assortment of the currency types used in the most popular digital spaces with the most active communities.
7. Create NFTs
It’s important to remember that to make money from creating NFTs, you want to make something useful and creative.
If you have artistic skills, you can profit from making buildings, art, products, and avatars for the metaverse of your choice. This is useful because it saves your customers time since they didn’t have to create and mint the NFT themselves.
Customized art and avatars make for greater self-expression and help landowners decorate and entertain people who visit their digital plots. Anything you can create digitally can be uploaded to a metaverse as an NFT.
Top Reasons To Invest In Digital Real Estate
Here we list some of the benefits of owning a piece of the virtual world.
Generate Income/Profits
The main reason many people want to invest in digital real estate is to generate a profit. Generating income is a goal of many since the cost of metaverse land has increased dramatically since the day it was initially sold.
However, not all real estate deals are beneficial. There are also extremely inflated prices in some areas of the metaverse so make sure you check around to get the best price for land possible without getting taken advantage of.
Build A Community
Owning tokens allows you to connect with the community in the digital space of a metaverse and enables you to vote on the outcome of that token.
Pros Of Investing In Digital Real Estate
- Increase diversification with a digital investment
- Tremendous income potential
- Potential for self-employment as a business opportunity
- Sound fundamentals
- Lower startup costs than buying physical land
- Easily scalable as an online business
Cons Of Digital Real Estate Investing
- Volatility
- Virtual and digital skills needed
6 Biggest Metaverse Worlds
If you’re unsure where you want to invest and explore, here are the largest metaverse worlds currently available to investors and users.
1. Somnium Space
Somnium Space is a blockchain virtual reality space where you can build structures and develop virtual lands. You can buy land from other players for development or flip the digital real estate investment for a profit.
Somnium Space operates on its in-game currency, the CUBE. The CUBE tokens are real cryptocurrencies that can be traded for other cryptocurrencies and tokens. The world allows for actual ownership of avatars, virtual land, items, and other digital goods.
The world can be entered on a desktop or more immersively through a VR headset. Somnium Space has a unique feature of programmatic VR advertising. It’s possible to monetize a space by analyzing engagement and implementing gaze tracking.
Somnium Space digital goods and land can be purchased in the marketplace or on OpenSea.
2. The Sandbox
The Sandbox initially launched in 2012 and has amassed 40 million users since then. It consists of 166,000 plots of land, which are ERC 721 tokens or NFTs. Parcels are typically individually owned, while two or more people own districts.
The SAND token is the in-game currency that grants rights to the holders. SAND can be staked to earn rewards. The Sandbox community has created at least 15,000 assets for the game so far.
In addition, the Walking Dead brand has partnered with the platform to bring this unique zombie brand to the digital world.
3. Revomon
Revomon or Revolution Monsters is a beta metaverse offering virtual reality, NFTs, staking/farming, and a DAO. Revomon operates on a play to earn protocol that allows you to turn your entertainment into income.
The DAO is made up of token holders who vote on decisions that need to be made about the game and platform. Farming or staking $REVO helps secure activities within the game.
Players earn rewards for depositing and holding their $REVO. The token is available for purchase on Gate.io, Uniswap, and Pancakeswap. To play, it’s necessary to create an account and download the game.
The Revomon are ERC 721 NFT creatures with fun names such as; Gorlit, Desuke, Zorelle, and Polluvern. The game’s purpose is to find, collect, and battle these Pokemon reminiscent characters. Many Pokemon VR players will feel right at home in this game.
This ethereal Metaverse allows you to collect rewards in exchange for game progression. Since the characters are NFTs, they can be sold for in-game currency. However, you can simply enjoy the game without engaging in any transactions if you so choose.
You have to be at least 18 years old to earn currency from this game. You also need to have VR equipment to enjoy Revomon.
After a short VR tutorial, you’ll be free to explore the universe. Once you encounter a cute little Revomon, you can summon your own to begin a battle. Since the game is VR-based, you can grab, throw, and shoot, among other free movements.
If you win the battle, you’re able to capture the new Revomon you just battled. Your Revomon gets to evolve and gain strength the more they fight. After you’re worn from fighting, you can visit a local town to heal. While this game doesn’t necessarily offer land ownership, it provides ownership of NFT digital assets.
4. Continuum World
Continuum World allows you to acquire your land with cute little human-like characters. If you like bright, cheerful, colorful cartoons, this may be the game for you. You can explore the world to gather resources or farm.
The main idea of the game is to farm and acquire resources such as land plots that are available for purchase, of course. Like many games on the blockchain, Continuum World has a DAO. Therefore, you can stake $UM to earn rewards and governance rights. In addition, you can level up your character and attend in-game events where you can socialize with other players.
5. Upland
Upland is a popular blockchain-based digital asset trading game where you can trade, buy, and sell virtual property. The game starts you off with around 4,500 points, and you have to get to 10,000 to be considered an Uplander.
Once you’re an Uplander, you qualify to purchase land on which you can build properties. By perusing through the map, you can see other players and their acquired assets. The game requires you to sign in daily or lose your EOS.
The world map of Upland is based on the real world. To begin the game, you get a player piece that you can “roll” across the board, which functions as a map. All parcels of land are mapped to real locations. So you can own a plot of land on your favorite street in San Francisco if you like.
You can purchase land in California, New York, and other renowned areas if you have enough points. To travel across vast spaces on the map, you’ll have to get your board piece on a train and pay the fare to travel.
Available plots of land are in green, while owned parcels are gray. You can make an offer on owned lands or simply purchase unowned lands. Depending on your status in the game, you may be eligible to participate in treasure hunts.
While Upland is not the most visually striking game, it’s still fun and an upgrade from your typical board game. The land is going fast, and prices are on the rise. Upland has a very low barrier to entry which doesn’t require any money to get started. However, you will have to engage in the game daily to become a citizen eligible to purchase land.
Unlike other blockchain metaverse games, you won’t be able to trade your UPX acquired in the game in exchange for fiat currency. There is no way to cash out; you can only reinvest your UPX for more properties. You can download the game on mobile or play it on desktop at Upland.me.
6. Mirandus
If you’re the seafaring explorer type, you’ll like Mirandus. Mirandus is a blockchain-based MMORPG digital world by Gala Games.
This Metaverse also offers land for sale in the form of Land deeds. There will only ever be 1,625 land deeds available on the game. Therefore, if it rises in popularity, the price of land may skyrocket. The game has exemplar avatars that can perform certain actions better than others.
The exemplars are called Elves, Halflings, Orcs, Dwarves, and Humans. You can purchase land deeds that allow you to control your part of the wilderness to set up farms or small cities. Each deed includes a home, plots for other players to place buildings, and walls to keep monsters at bay.
In addition, you can pay a lease to another landowner to build on their land. All of the land deeds are sold out in Mirandus and have to be purchased on the secondary market on OpenSea.
This article is originally on Arrest Your Debt.
