The real estate market is booming as more and more people want to build or buy their own homes. Another popular real estate trend is the rising appeal of virtual real estate. If you have heard of it, but don't quite understand it well, read on. Here we have explained what virtual real estate is and why people are investing so much in it. We also make suggestions on whether you should buy it or not.
What is Virtual Real Estate?
As the name suggests, virtual real estate
is land located online. The land is located in a set of virtual worlds known as
the Metaverse. The craze for virtual lands has increased recently, especially
since Facebook said it would be going all-in on virtual reality and changed its
corporate name to meta platforms. According to some data, plot prices have risen
as much as 500% since then.
One way of thinking about virtual real
estate is buying a domain name or a social media handle. If domain names are
considered Web 1 and social media handles are considered Web 2, then virtual
real estate can be considered Web 3. You can build virtual real estate for
yourself however you want. It might mean earning income by playing games or
selling products for individuals. For brands, it might mean something more
interactive and active than their digital presence at this moment.
How to Buy Virtual Real Estate?
The simplest way to buy virtual real estate
is to buy it directly from the platform or through a developer. Investors can
build on the land and make it more interactive, decorate it, and change it
according to their preferences.
Risks Associated With Buying Virtual
Real Estate
Buying virtual real estate as of now is
very, very risky. Make sure you only invest that money you have prepared to
lose without breaking a sweat. The real estate market is highly speculative and
based on blockchain. So, it is also highly volatile. Sometimes it can be
massively rewarding too.
Some experts are also warning that virtual
estate could also be a bubble and might lose their money in something tied to
reality.
Why Do People Buy Virtual Real Estate?
Though most people believe that virtual real
estate can be quite risky, they still invest in it. Here are a few reasons why.
The first reason is that they want to use
it for something they want to do. For example, if they want to build a home,
they can show off their possessions and maybe have friends over to relax and
hang out.
Another reason is for investment purposes.
Some people are investing in virtual real estate because they want this
investment to pay off and give them a gain in the future. They are buying real
estate now at lower prices and will sell it off when the prices are up.
Some lucrative figures might also appeal to
people to buy virtual real estate. For instance, a report by Grayscale, a
crypto asset manager, has revealed that the digital world might grow into one
trillion in the future.
Celebrity craze is also a factor. Some
people only buy virtual real estate because their favorite celebrities like Justin
Bieber, Ariana Grande, and DJ
Marshmello have promoted it and invested in it.
We recommend our resource to contact a
financial expert before buying virtual real estate. Remember, do your research
and be smart about every purchase.
Sources:
https://time.com/6140467/metaverse-real-estate/
https://www.cnbc.com/2022/01/12/investors-are-paying-millions-for-virtual-land-in-the-metaverse.html
https://www.forbes.com/sites/bernardmarr/2022/03/23/how-to-buy-land--real-estate-in-the-metaverse/?sh=2f5e3ef7546e