As the metaverse continues to grow in popularity, more and more people are looking to get involved. In this sense, the beginning of 2022 taught us that one of the most profitable ways to do so is to invest in virtual real estate and become a metaverse real estate entrepreneur. Buying and selling virtual property and renting it or leasing it to others is a growing industry, and there are many opportunities for entrepreneurs who want to get involved.
If you’re interested in becoming a metaverse real estate entrepreneur but don’t know where to start, here are the ten steps you need to take to get your foot in the door. But first, some basics.
What is the metaverse?
The metaverse is a term used to describe the growing trend of people spending time in virtual reality (VR), augmented reality (AR), and mixed reality (MR) environments. These include games, social media platforms, educational simulations, and more. The term was coined by science fiction writer Neal Stephenson in his novel Snow Crash and has been used to describe various virtual worlds since.
According to its original concept, the metaverse is an all-encompassing and interconnected virtual world that anyone anywhere can access using the right set of hardware and a fast internet connection. The idea was also popularized in Steven Spielberg’s “Ready Player One” blockbuster hit, where it was represented by the “Oasis” platform.
That metaverse isn’t quite here yet, but many proto-metaverses are beginning to take shape. These include Decentraland, SandBox, Fortnite, and Second Life, to name a few, but there are hundreds more under development. While these virtual spaces were primarily developed as gaming platforms, they are now being used for various other purposes, including socializing, education, business meetings, and more.
The metaverse is so much more than a buzzword.
With the rise of COVID-19 and the resulting lockdown measures worldwide, the metaverse has seen a surge in popularity as people are looking for new ways to connect and interact. This is especially true for younger generations who have grown up with video games and are more comfortable interacting with others online.
One of the things that lit the spark was Facebook’s rebranding to Meta Platforms, but many other companies, big and small, have been working for years on developing the metaverse and Web 3.0 using VR as a base. But VR isn’t the only core tech needed to make the metaverse a reality. There are other even more critical technologies for that.
Blockchain technology for the metaverse
Some of the most popular metaverse platforms today are powered by blockchain technology. This is because blockchain provides a way to decentralize the metaverse and create a trustless system where virtual assets can be bought, sold, or traded without the need for a central authority. Blockchain technology also allows the creation of an independent virtual economy that operates within each metaverse platform, which is crucial to these platforms’ long-term success.
Non-Fungible Tokens and how they power ownership in the metaverse
Non-Fungible Tokens or NFTs are digital assets stored on a blockchain. Unlike Bitcoin or other cryptocurrencies, which are all interchangeable, NFTs are unique and can’t be replaced by another token. This makes them perfect for representing ownership of digital goods such as digital art, in-game items, or virtual real estate.
NFTs use blockchain technology and smart contracts to verify ownership and prevent fraud. When you buy an NFT, it’s stored on the blockchain forever and can’t be altered or duplicated. This means that you have complete ownership of the asset and can do what you please, including selling it or trading it for other NFTs.
NFTs and phygital real estate
The power of NFTs and smart contracts don’t end in the metaverse. We can also use NFTs to represent ownership of real, physical objects, even physical real estate. In fact, an emerging trend is to blur the line between virtual and physical realities by merging physical objects with virtual ones. These phygital assets are usually twin copies of the same asset in the real world and the metaverse.
Some examples of real properties that are also becoming virtual real estate include a mansion in Miami which will be auctioned in 2023. This mansion exists in real life, and a digital twin was created in the metaverse, and they’ll be sold together as one single phygital property.
Pros and cons of investing in virtual real estate
Just as the traditional real estate business has its pros and cons, so does the virtual real estate business:
- There’s no need for inspections or any government compliance issues.
- There’s no need to develop the land physically, which saves time and money.
- You’re not bound to the laws of physics when designing buildings and adding assets to your property.
- You can lease or rent your virtual property to others who want to use it for their own purposes.
- You can sell your virtual property anytime without waiting for the perfect buyer.
- The metaverse is still a new and hot topic, so there’s potential for huge profits as it grows.
- Finding the right platform and getting started can be challenging if you’re unfamiliar with the technology.
- The price of virtual land can fluctuate greatly, so you need to be aware of market trends.
- You can become a victim of scams if you’re not careful and decide to invest in a new platform without proper research.
- The metaverse is still in its early stages and is subject to change, which could result in losses.
Ten steps to start a metaverse real estate business
Step #1 – Choose a crypto exchange platform.
Virtual land is bought and sold using cryptocurrency, so the first step is to choose a cryptocurrency exchange platform to buy the crypto you need to be able to pay. Each platform will usually accept its particular native currency, like Decentraland, which uses MANA, but in some cases, you can also use other popular cryptos like Ethereum.
You’ll also need a crypto exchange to convert the profits from your investments to your local fiat currency if you want to spend them because your earnings will also come in as cryptos. This means that you need an exchange that works with your local currency.
While this usually isn’t an issue for those who purchase goods and services in USD (all reputable exchanges will let you buy and sell crypto in USD), that may not be the case in other countries or with other currencies. For example, not all exchanges work with Indian rupees, so if you need to use that currency to buy or sell crypto, you’ll need to choose a good Indian crypto exchange or at least one that works with that currency.
Step #2 – Choose a crypto wallet.
Opening an account on a reputable crypto exchange isn’t enough to get in the game. You’ll also need to create a cryptocurrency wallet, where you’ll store the crypto you buy on the exchange. Choosing a secure wallet that supports the type of crypto you want to use is essential.
There are many options when it comes to crypto wallets. From offline hardware wallets for cold storage to online apps and extensions like MetaMask, you won’t find a shortage of features to choose from. You can even use a paper wallet to keep your private keys entirely offline, although, if you do, you won’t be able to buy virtual land with it.
The important thing is to ensure that the wallet you choose supports the type of crypto you want to use and that it’s compatible with the NFT marketplace you have to use (read below).
Step #3 – Choose the right metaverse platform to invest in.
With the recent popularity of the metaverse, there are now many platforms to choose from when buying land. Some platforms, like Decentraland, have been around for years and have established themselves as leaders in the space. Consequently, there’s more demand for plots of land in Decentraland than in other platforms, making prices higher. Others are newer but are attracting a lot of attention by offering unique features that make them worth considering.
What’s important is choosing something you believe will attract buyers later down the line, even if they aren’t so popular today.
Step #4 – Choose the best location.
As with physical real estate, location is everything. It’s not the same being in the middle of nowhere surrounded by complete strangers who rarely go online than buying a plot of land next to Snoop Dog’s virtual residence where you might even come across the famous rapper’s avatar.
Of course, prime locations will be more expensive, but they can also provide a higher ROI.
Step #5 – Assess the price of plots of land.
In the metaverse, plots of land are bought and sold using cryptocurrency. The price is often denominated in the platform’s native currency but can also be quoted in USD or other popular cryptos like Ethereum.
When assessing the price of land, you need to consider the current market value of the crypto being used and the future potential of the platform you’re investing in.
It’s also important to remember that the price of land can fluctuate just like any other asset (much more so than in the physical real estate business), so it’s crucial to do your due diligence before investing. Also, consider all the costs related to the purchase, including gas fees and other necessary expenses you’ll have to incur.
Step #6 – Open an NFT marketplace account to buy NFTs.
Now that you’ve chosen what platform (or platforms) to invest in, decided on the location, and assessed the purchase price and associated costs, you’ll need to find a reputable NFT marketplace where you can make the purchase.
Examples of popular NFT marketplaces include Opensea.io and Decentraland.org, and you’ll find most plots of land listed there.
Step #7 – Buy your first plot of virtual land.
It’s now time to make your first purchase. The process is similar to buying anything else online. You’ll need to fund your crypto wallet using your crypto exchange platform. You also need to check exactly how much you need and what type of currency. For example, purchases made on the Ethereum blockchain usually require you to pay a gas fee in ETH, which is different from the actual purchase price normally paid in the platform’s native currency (MANA, for example).
Step #8 – Develop your virtual land.
Once you own your plot of land, it’s time to start developing it. The process will vary depending on the platform you’re using, but in general, you’ll need to use a tool like Blender or Unity to create 3D models of the buildings and objects you want to place on your land.
If you’re not into 3D modeling or don’t have the time to learn, you can also commission someone to do it for you. Once you have the models, you’ll need to upload them to the platform so they can be placed on your land.
Step #9 – Profit from your investment by leasing, renting, selling, and other ideas.
There are many ways to make money from your investment in the metaverse. The most common is by leasing or renting your land to others who want to use it for their own purposes, be it for a virtual shop, an art gallery, or simply as a place to hang out with friends.
You can also sell your land outright or develop it into a more complex project like a virtual reality game or an online experience and then charge people to use it.
The sky’s the limit when it comes to making money from your investment in the metaverse, so get creative and come up with ideas that will make people want to visit your land.
Step #10 – Get involved in the community and stay updated with trends.
Finally, to make sure your investment in the metaverse pays off, it’s good to get involved in the crypto and NFT communities and in the community of your chosen metaverse platform. This will help you stay up to date with trends, helping you spot new opportunities and take advantage of them before everyone else.
An excellent way to do this is by following influencers and thought leaders in the space on social media, as well as reading blogs and articles about the metaverse.
The bottom line
With these ten steps, you’re well on your way to becoming a metaverse real estate entrepreneur! Remember to do your due diligence, be creative, and get involved in the community to make the most of your investment. If done right, this can be a very profitable venture, so go out there and make your mark in the metaverse!