In recent years, the real estate market has experienced significant growth, to the point where physical properties are no longer sufficient for some investors in the sector. That is why the real estate market has found an opportunity to expand through investments in the metaverse. The vast potential of these virtual worlds in terms of available building space has led to a boom in virtual real estate sales, to the point that in 2021, these transactions totaled 475 million euros. Similarly, growth of 31% is projected by 2028.
That’s why this article covers everything you need to know about investing in the metaverse: how it works, the benefits, the risks, examples, and brands to consider, as well as the latest trends to help you make the best decision. If you’re looking for investment opportunities in 2023, we recommend you keep reading.
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We know that, before discussing potential investments in the metaverse, we need to be clear on what the metaverse actually is.
The term "metaverse" refers to a concept that integrates online virtual worlds where users can interact and participate in virtual experiences. It is a digital space that combines augmented reality (AR) technology with virtual reality (VR) and video to create a virtual universe in which users can move around and interact with one another.
The concept itself is quite old. It gained popularity starting in 1992 through Neal Stephenson’s novel *Snow Crash*, but the metaverse as a reality is much more recent, and in fact, there is still no widely accessible metaverse. However, there are platforms that aim to create a real metaverse, and the one that comes closest to achieving this is Meta with its Horizon Worlds.
Thanks to these platforms, which are already working to build this universe, it is now possible to invest in the metaverse. Below, we’ll introduce you to the brands that already offer this opportunity.
Some of the most popular metaverses (or metaverse-like experiences) available today are:
Most of these platforms offer their users opportunities to invest in the metaverse. In fact, the largest metaverse investments, in terms of capital raised, have taken place on Decentraland, with land purchases in its main city, Genesis City.
But the company with the most promising approach to investing in the metaverse is Meta’s Horizon Worlds. It is a virtual reality platform that allows users to create, experience, and share immersive virtual worlds using a virtual reality headset. It offers intuitive creation tools, security and privacy features, and numerous opportunities for investment in the metaverse.
Investing in the metaverse works similarly to investing in other markets, but with some unique characteristics due to the virtual nature of the assets available for purchase.
To begin with, properties acquired in the metaverse are NFTs. An NFT is a non-fungible token, a unique digital asset. Most often, these are digital art pieces (images, audiovisual files, 3D creations), but they can also be other things, such as land, virtual homes, avatars… To ensure these NFTs have value, their supply is always limited. For example, the real estate market in Decentraland has only 90,000 plots, each measuring 240 square meters.
These NFTs are available to buyers worldwide through companies specializing in metaverse investments. The products offered by these companies can be purchased using cryptocurrency.
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Among the investment opportunities available in the metaverse are various real estate investment options, as virtual worlds can replicate and enhance traditional real estate investment models. Some of these options include:
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To invest in the metaverse—including in the real estate market—you need a virtual wallet and must create an account and an avatar in the virtual world where you wish to invest. Then, simply contact one of the real estate agencies operating there and explore their listings. The company will provide you with a virtual tour of the property, after which all that remains is to finalize the transaction. The transaction is subject to the tax laws of the country where it takes place.
Investments in the metaverse are prompting several companies to rush to purchase land.
For example, the company Metaverse Group reportedly purchased a plot of land in Decentraland for nearly $2.5 million. Another real estate company, Republic Realm, purchased another plot of land on the same platform for $900,000. Even individuals are participating in metaverse investments: a plot of land in Snoopverse, the metaverse that Snoop Dogg created in The Sandbox, sold for over $450,000.
In Spain, there is a real estate platform called Metrovacesa that also facilitates the buying and selling of virtual land. However, given the global scope of investments in the metaverse, there is no reason to limit oneself to Spanish platforms. Other real estate companies with properties for sale in various metaverses include Metaverse Property and Metahood.
Although existing metaverses and the virtual real estate market they represent are still in their early stages, certain advantages of this type of investment in the metaverse are already becoming apparent:
Metaverses are still in their early stages and have not yet reached their full potential, which means there is plenty of room for growth. Right now, virtual real estate is more accessible than traditional real estate—and cheaper—which means more people can invest in it. Furthermore, since metaverses can be accessed from anywhere with an internet connection, there are no geographical restrictions on investing in them.
Virtual real estate can be much more flexible than traditional real estate, as investors can buy and sell virtual properties quickly without having to deal with issues such as repairs and maintenance.
Investing in virtual real estate can help diversify an individual's investment portfolio and reduce the associated risk.
Metaverses are driving technological innovation and can offer unique opportunities for real estate investment.
Therefore, investments in the metaverse offer a wide range of opportunities for investors interested in the real estate market.
On the other hand, it’s important to keep in mind that investments in the metaverse, like any investment, come with their own risks. In addition to these, there are a number of unique challenges that apply specifically to investments in the metaverse:
According to Janine Yorio, CEO of the real estate company Republic Realm, the company sold 100 private virtual islands for $15,000 each, and “today they sell for around $300,000.” In other words, investments in the metaverse can be highly profitable. However, this profitability can vary significantly depending on the type of metaverse investment in question.
When it comes to real estate assets, profitability depends on the type of asset, its location, and the level of demand—just as it does in the real world. But in the metaverse, there’s also an opportunity that almost never arises in reality: acquiring virtual plots of land or homes near those owned by celebrities at very reasonable prices . The case of the plot in Snoop Dogg’s private metaverse gives an idea of how to do business by capitalizing on the fan phenomenon.
Virtual reality is still a very new concept, and it is difficult to make accurate predictions about the growth of investment in the metaverse. However, some are already talking about creating an entire society within the metaverse that is equivalent to the real world, which would involve building all kinds of structures, from homes to cemeteries. The Seoul Metaverse project, for example, aims to recreate the city of Seoul by 2023 and make it fully accessible for virtual visits.
For this reason, interest in and investment in the metaverse are likely to continue growing in the coming years. Several tech and media companies are investing in the development of metaverse experiences, and many people are interested in exploring this new virtual space and using it to interact with other users and engage in activities. The metaverse is expected to have a significant impact on the global economy, with investment opportunities in areas such as content creation, virtual and augmented reality technology, network infrastructure, and advertising.
Investments in the metaverse therefore hold significant potential, and many companies—as well as individuals—seem eager to capitalize on this boom: more purely digital real estate properties will continue to be created, and as the capabilities of this virtual world improve, the price of these plots will rise accordingly.
Meanwhile, several companies are leveraging the benefits of investments in the metaverse to sell real estate. Metrovacesa, in partnership with Datacasas Proptech, is offering investments in the Málaga Towers project (located in Málaga) through a replica of the project in Descentraland.
Furthermore, it’s important to remember that investments in the metaverse can be complemented by investments in tokenized physical real estate. In other words, there is also the possibility of investing in the real estate market through virtual transactions. In Spain, Domoblock offers a broad portfolio of blockchain-based real estate investments through real estate crowdfunding, with investments starting at just 200 euros. These types of investments, which involve the tokenization of real estate, allow for investment diversification with lower risk and a guaranteed return.
In conclusion, the advent of the metaverse has given rise to an exciting new form of investment: the purchase of virtual property. As technology and virtual reality continue to advance, more people are venturing into this digital world to acquire land and real estate in the metaverse.
Although the idea of buying virtual real estate may seem strange to some, the exponential growth and economic potential offered by the metaverse cannot be ignored. Virtual properties can have intrinsic value in terms of location, design, and unique features, attracting investors and enthusiasts alike.
However, it is essential to address the challenges and risks associated with purchasing property in the metaverse. Regulation, security, and the protection of property rights are crucial factors that must be taken into account. In addition, it is important to thoroughly research online platforms and marketplaces before making any transactions.
As society continues to explore and embrace the metaverse, new opportunities and challenges are likely to emerge. Purchasing property in this digital environment is changing the way we think about ownership and investment, and will require an open mind and adaptability to fully reap its benefits.
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