Is Virtual Real Estate Worth Buying?
Virtual real estate has been gaining a lot of popularity lately but many people have no idea what it is! To be fair, many of the creators of virtual real estate may not know exactly what virtual real estate can do yet either. I think virtual real estate has a ton of opportunities and can be fun, but it is also hard to know what will happen in the future. We can see the virtual world evolve and get an idea of what the future might be like. Is it worth it to buy virtual real estate with prices skyrocketing on some platforms?
What is virtual real estate?
“Virtual” can mean many different things to many different people. When I talk about virtual real estate, I mean the metaverse. An online world that is backed by cryptocurrency blockchains where people can buy and secure their own virtual piece of real estate.
You may alternatively hear the word virtual used to describe virtual assistants who work remotely to help people in all industries including real estate. That is not what I am talking about. You may also hear the term virtual wholesaling which is used to describe wholesaling real estate in one state while the wholesaler is in another state. That is not what I am talking about either. In those cases, the word “virtual” is used to describe working in one area while residing in another. However, you are still working in the real world.
The meaning of “virtual” that we are using is in regards to the computer world: “Not physically existing as such but made by software to appear to do so.”
The virtual real estate that can be bought and sold does not exist in our physical world but it does in the online world. Many may think this sounds utterly ridiculous and useless, but many people said that about the internet, which was about virtualizing information.
Why buy virtual real estate if they just make more of it?
The tricky part with virtual real estate is there are many different virtual worlds. On Earth, we know that land space is limited. There are some ways to increase it by creating more land space in the oceans or wetlands, but for the most part, we are limited to a set amount of real estate. Maybe someday another planet will be colonized but that is a ways away. Because there is a limited amount of land, real estate becomes very valuable, especially in highly populated areas.
How can virtual real estate ever be valuable if there will always be a limitless supply? Well, the easy answer is that there is not a limitless supply in many virtual worlds. The Metaverse is what is used to describe the entire virtual real estate galaxy and there are individual worlds within that galaxy. Each of those worlds has different rules, types of real estate, and purposes. Some of those worlds have created a very limited supply of real estate. The rules that were set up for those worlds do not allow them to make more land. It is scarce and the prices have been skyrocketing in many of these worlds. Other worlds have no limit or much more land to sell and have much lower prices.
There is scarcity in the virtual world even though at first glance it appears to be limitless.
How does the cryptocurrency blockchain guarantee scarcity?
Many of you may be asking that is great that these virtual worlds have said there will only be a limited amount of real estate but how do we know they will not change the rules or create more? The way cryptocurrency works with the blockchain with most of these worlds, there are set rules used to create these worlds and police them from the very beginning. You cannot make changes.
There are no guarantees in life and some of these worlds are not set up as well or secure as others. We are seeing the money going to the worlds that seem to be set up the best, the most secure, and the most transparent. These worlds also know if they change things up, or lose the trust of the users, they have lost everything! In the real world, we see values vary greatly based on how secure and stable a country is as well.
How much is virtual land selling for?
The price for virtual land varies greatly depending on the world you are buying in and where in that world you are buying as well. Just like real estate on Earth, values vary greatly. One big difference with virtual real estate is the prices can change very quickly. Prices in the real world tend to go up and down relatively slowly. It can take months for prices to drop or increase even slightly. However, in the virtual world prices change very quickly and it can be tricky figuring out the value as well.
Just about every world uses a different currency, and many use different blockchains as well. Here are some examples of what properties are selling for in a few different worlds right now.
- Decentraland: Lowest price found: 4,300 Mana which equals $13,588
- Sandbox: Lowest price found: 3.07 Etherium which equals $11,847
- Upland: Lowest price found: 5,000 UPX which equals $5
These are the lowest prices found on some of the most popular Metaverse worlds. There has been a property that sold in Decentraland for more than $2 million dollars! These prices also change often because not only can the price of the property change but the price of the coin that buys the property changes! You can also invest in that coin and not buy property as well with crypto wallets like Coinbase.
Decentraland and Sandbox have a very limited amount of land whereas Upland is creating more land all the time. Upland bases their land off real-world lots on Earth where Decentraland and Sandbox have created their own world and own land parcels. There are more worlds but these are the most popular at the moment and all have had rising prices. Decentraland has sold all of their land and it is only available on the secondary market, Sandbox is still slowly releasing land and it is available on the secondary market and Upland still has land available in certain towns but most of it is only available on the secondary market. However, Upland recently released the Bronx as a new town and the entire city sold out in less than an hour!
If you decide to buy extra UPX in Upland make sure you use a referral link to sign up as it will double your first buy and the referring partner will benefit as well. This is my link if you don’t have another to use: https://r.upland.me/yioh
How can you buy virtual parcels of land?
Buying land can be tricky as well depending on where you want to buy it. Decentraland and Sandbox have their own cryptocurrency; Mana and Sand. You need Mana to buy a plot of land in Decentraland and an account set up in Decentraland as well. Crypto wallets like Coinbase allow you to buy, sell or transfer Mana. You can also use Coinbase to buy Sand as well, which is nice because Coinbase is one of the largest and most trusted cryptocurrency institutions. Many lesser-known coins are not traded on Coinbase and you must find other wallets, which can become cumbersome. The United States has strict rules on buying and selling crypto and not all wallets allow US citizens to use them because of that! I have gone through a lot of hoops trying to buy coins that were not listed on Coinbase.
You can also use Etherium to buy Sandbox, which is a well-known coin as well and available on Coinbase. You would need to transfer or deposit money into Coinbase or a similar wallet, trade for the coin you need to purchase the land, then you need to find where the land is listed for sale and transfer the coin to that marketplace for a sale. I have not bought Decentraland or Sand parcels so I will let those platforms give you the instructions for exactly how to buy their plots.
I chose to buy in Upland because it is cheaper and much easier. Upland is not as regulated because while they have a currency (UPX), it is not traded on the open market so it does not have the restrictions the others do. You can log in to Upland, create an account, get free UPX to start, and if you choose to buy more UPX with Dollars or other currency. With Google Play I was able to buy more UPX with one click on my phone. Upland also has a referral program that allows you to gain UPX when others join and fund their accounts as well which I do not believe the other worlds have. You find a property, click on it, and you can buy it very quickly. I go over the details on Upland here.
Can you make money buying virtual real estate?
Many people have made a lot of money with virtual real estate but there are no guarantees and things are very risky right now. For the most part, people have been making money by purchasing land low and selling high. They have also made money by holding coins like Mana or Sand that have increased in value as well (an advantage Upland does not have). It is also possible to rent your land and Upland pays a yield on all land owned.
The problem with Upland right now is the only way to take money out of the world is to sell land for US dollars. You can price property with a UPX amount or a dollar amount. If someone buys it for Dollars, you get those dollars in your account and can transfer them and spend them like any other dollar. However, if you have UPX in your account you cannot transfer that to dollars or deposit it into a wallet like Coinbase. It has to stay in the game. It is easier to buy properties in Upland but harder to get your money back out.
There also may be many other applications to make money with virtual real estate in the future. Many big brands are buying virtual real estate and planning to use that land for events and sales. There could be applications for artists to host songs, movies, paintings, digital art, and more on virtual real estate and collect fees from those who visit. Many think the future of virtual real estate is to cut out the middle man or middle company for things we do virtually now so that more money goes directly to the creator. This is why many big brands are starting to invest in the metaverse.
How or when that will happen knows one knows for sure!
Should you buy virtual real estate?
Investing in something that is new always has risks. There may be risks we do not even know about. A lot of people have made a lot of money with cryptocurrencies and the Metaverse, but a lot of people have lost money as well. I would never invest in something like this thinking I have to get my investment back in full by a certain time. Investments like this are high risk with a possible high reward.
I invested in the land that was the easiest to use and understand and the cheapest! But the other really cool thing about Upland is that it is fun! It is like a game and l love to buy properties in real life. Upland is a lot like Monopoly where you earn money, try to buy as many properties as possible, and build wealth. When Upland releases a new city it is a blast and highly competitive. People were taking days off from work for the new releases! They have it set up where it takes some skill and quick thinking to buy the best properties. There can be some huge gains in a short period of time but you can also get caught up in a buying frenzy and pay too much.
I think of it as a fun break from work that could turn into something big at some point. If it fizzles out and does nothing I am not out much money and I learned a ton about geography! I am thinking about buying land in other worlds as well but I need to learn more about them and really think about if it is worth considering the much higher cost to enter.
Conclusion
Virtual real estate is a whole new world and many waiting to see what will happen with it. Some are going full bore into that world now to take advantage as early adopters. Some worlds may become huge moneymakers and some may fizzle into nothing. For me, it is a lot of fun and could be a good investment down the road. For the moment, I can get in pretty cheap as well, at least with Upland.
This article originally appeared at InvestFourMore.
Category: Real Estate
