While the metaverse is still an emerging concept, investors, companies, celebrities, and crypto enthusiasts are already shelling out thousands and up to millions for metaverse real estate, or digital worlds made up of pixels. In 2021, real estate sales in the metaverse reached over $500 million and it’s predicted that it could double in 2022, potentially reaching $1 billion.
Countries are also looking to build their own metaverses. South Korea, for example, is looking to develop a digital iteration of its capital, Seoul, in what would become a virtual world complete with facilities, tour buses, and recreations of cultural heritage sites.
Investing in virtual real estate comes with plenty of risks, one of which is the volatility of cryptocurrency. However, investors are keen on reaping potentially big rewards and cashing out. Aside from being able to do anything they want, from working and shopping to playing and creating, metaverse real estate lets investors get involved in the future of the internet, which is Web3 – a decentralized, more democratic iteration of the Web.
Who’s getting into this virtual land rush and what do they want to get out of their virtual properties?
What Investing in the Metaverse Currently Looks Like
Recently, Cinch Home Services conducted research in metaverse real estate, surveying 1,000 participants across the US, some of whom already had digital properties. The survey pool was made up of 68.3% of respondents who identified as women, 28.7% who identified as men, and around 3% who identified as nonbinary.
According to the study, 13% of individuals, US residents, already own or rent land in the metaverse or are planning to dip their toes into metaverse real estate. Around 25% of crypto investors, or 1 in 4 individuals, already have virtual property or are renting metaverse property.
Furthermore, these individuals are willing to spend an average of $1,743—that’s approximately $700 more compared to an average rental rate for a one-bedroom apartment in the country. Like its real-life counterpart, digital real estate is mostly about location, as indicated by 71% of the surveyed individuals who wanted to snag a good location for their metaverse real estate. This is followed by style (52%), lot size (34%), square footage (30%), and display of NFTs (12%).
Who Invests in Metaverse Real Estate?
You might be surprised to find out that baby boomers comprise 18%, or around 2 in 10, of those thinking of investing in metaverse real estate. Cinch’s study found that compared to 18% of baby boomers, or persons born between 1946 and 1964, 11% of Gen Z (born between 1997 and 2012) and 12% of Millennials (born between 1981 and 1996) showed interest in renting or buying land in the metaverse. Additionally, only 11% of Gen X (born between 1965 and 1980) respondents showed interest in investing in virtual real estate.
The study also found that more men are showing interest in metaverse real estate. In fact, 17% of men are planning to invest in virtual property, compared to 10% of women.
But what else are investors looking for in digital real estate? In the real world, people tend to look for features like location, neighborhood, curb appeal, storage, and lighting fixtures when planning to purchase a property.
When it comes to metaverse real estate, 44% of respondents want to have customized homes, while 38% would like to purchase a private island.
Other things potential buyers are looking for in virtual property include land with natural resources (33%), a digital version of their childhood home (32%), and an empty plot of land (28%). Additionally, more men, 39%, wanted to rent or own an empty parcel of land, compared to 22% of women who indicated the same interest.
Other factors that respondents were looking for include a property that has a virtual community, a property that’s close to a virtual version of a downtown area, and a virtual version of their current home. Around 16% of respondents were looking for an office space, while 19% were looking for a space where they could advertise their products or services.
The State of Metaverse Real Estate
While no one knows what the metaverse will exactly look like, you can get an idea of how this digital landscape will appear as virtual properties and platforms begin to emerge.
Metaverse properties can get very expensive and it has inherent risks. Knowing what other investors and potential buyers are looking for in digital property can help you make more informed decisions, especially if you’re looking to get into metaverse real estate investment.