After high inflation and the Federal Reserve raising interest rates in 2022, investors are reluctant to invest money into new businesses. With technology reshaping wealth and asset management, new business opportunities have arisen, giving investors new ways of making money. A such business opportunity would be digital real estate. Despite being around for a few years, we are just beginning to see its potential. Digital real estate could be a lucrative business if done correctly and doesn’t undertake the same risks as other industries.
Digital real estate is related to any property on the internet. It might include owning a website, starting a social media account, or even buying cryptocurrency. Ownership of these assets could be a great way of earning significant revenue in the new digital era.
Innovative digital investments are constantly developing and will likely be the way of the future.
A considerable investment opportunity
Nowadays, many skilled entrepreneurs invest in digital real estate due to offering stable recession-proof cash flow. Technology and Internet Entrepreneurship are the number one thriving market in California’s Silicon Valley. Savvy investors in the 21st century know the importance of owning a digital asset. It’s because they know the assets’ value will increase over time.
Digital real estate isn’t so different from traditional real estate. When you buy digital real estate, you purchase property online and let it appreciate before selling it.
Anyone can invest in digital real estate. But no one successfully invests in it without a clear plan or a strategy.
Even though it might not undertake as many risks as other businesses, investing in digital real estate requires effort and time. But the rewards can be huge for those willing to roll up their sleeves and work for months to years without pay to pursue an eventual profit.
How does digital real estate work?
If you’re asking what is digital real estate and how does it work, you need to know the term refers to owning virtual properties. According to Web 1.0, the email domains mainly represented digital real estate. In Web 2.0, social platforms. Nowadays, Web 3.0 is emerging, and virtual real estate comes in virtual parcels- NFTs and digital currency.
Metaverses are starting to raise interest among those seeking new innovative investment opportunities. They consist of several technologies, including digital currency and different augmented realities. In other words, the metaverses are three-dimensional simulated realities.
Frequently, digital real estate in the metaverse is listed as an NFT in a particular virtual world. They exist as pixels and plots, often with logos.
We can name Decentraland, The Sandbox, and Axie Infinity among the most popular virtual worlds with parcels for purchase.
These platforms create different events, shopping experiences, land parcels, and houses. Like in the physical world, these virtual platforms have limited supply and demand that influence the prices. Location is also a crucial factor that affects prices. For example, someone paid $450,000 to be Snoop Dogg’s virtual neighbor on the platform Sandbox.
While most are familiar with the most common examples of investing in digital real estate, like creating a blog or starting a social media account, few know which steps to take to invest in metaverse land.
How to purchase digital real estate in the metaverse
Buying land in the metaverse works similarly to buying traditional real estate. The higher the demand for land, the more expensive the area is. It’s essential to consider the technology, currency, and total land value when purchasing digital real estate.
Here are the steps to follow when learning how to buy digital real estate in the metaverse:
- Choose a platform: When choosing a platform, you should consider that each one has a different currency to use. For example, Decentraland requires MANA, an Ethereum-powered blockchain that cannot be replicated.
- Pick a storage method: To purchase digital real estate, you will need digital storage. The most popular metaverses, Decentraland and Sandbox, require the MetaMask extension to store your assets.
- Purchase your land: When buying digital real estate, choosing the right property is essential. Classify your metaverse of choice results to find parcels by newest, oldest, lowest, and highest price. After you select your parcel, buy or bid for a plot via OpenSea and wait for the seller to accept the purchase.
Benefits of buying digital real estate
The benefits of investing in digital real estate will depend on the investment you decide to make and the time and effort you are willing to put in. Some potential benefits may include:
- Diversification: Like any other investment, digital real estate could be a great way to diversify your portfolio. It includes diversifying the products you invest in and varying your risk level.
- Accessibility: One of the primary benefits of investing in digital real estate is accessibility. The market allows entry regardless of status, age or knowledge. Besides, since everything happens in the digital realm, you can invest from anywhere in the world. You only need a laptop or a smartphone and a suitable internet connection.
- Independence: Another benefit of investing in digital real estate is independence. Most investors start in trades free of agents and government control. They make their own choices while investing and enjoy the benefit of zero distractions.
- Profitability: Investing in digital real estate could allow investors to earn significant revenue. Demand always drives sales and profits. The internet is in great need due to more people coming online. Most profitable businesses advertise their products online, and the internet has become an essential part of our lives.
- Flexibility: Investors are surging digital real estate due to its great flexibility. It consists of diversity and the many options you can explore. Unlike the physical real estate market, you hardly need government intervention to buy or sell virtual properties. Also, there are several forms of virtual assets you can invest in, from social media accounts to digital products. Each is one-of-a-kind, offering flexible features and demands.
The Future of digital real estate
Digital real estate’s future is both appealing and uncertain. It’s appealing because the innovation potential is enormous. And it’s uncertain. After all, the market is still new. Also, it’s constantly evolving, and it’s pretty hard to predict which turn it will take. But, if we compare it to the last decade’s evolution, digital assets have seen significant growth. For example, the social media application Snapchat received an offer for 30 billion. It might be the case of well-established digital assets, but many renowned online businesses started from the bottom and strategically built their way to the top. Amazon began as an online bookstore in Jeff Bezo’s home garage. The idea of Facebook was born in Mark Zuckerberg’s freshman dorm room at Harvard. Microsoft cofounders Bill Gates and Paul Allen founded the company in a garage in Albuquerque. These are just a few examples of companies that started from scratch in the digital industry and became billion dollars businesses.
As with any other type of investment, nobody can guarantee a 100% success rate, but one thing is for sure, digital real estate it’s here to stay. We are just starting to see its tremendous potential, and if you want to start investing, now may be the right time. Ensure you have done proper research first to increase your chances of investing smartly.