The metaverse and its potential have become hugely popular topics of discussion among investors and tech enthusiasts alike. For the tech-forward, it's a universe where a whole new form of human interaction and connection can take place, ripe with promise. For real estate investors, the metaverse means something more: It's a chance to get in on the ground floor of some risky, but potentially very lucrative, investments.
It's not that all the disruptive stuff is off the table for investors. In fact, you are the very people who are going to have the capital to inject into this brave new world in order to make a lot of that disruptive stuff happen. In the meantime, you can and should be earning passive income with your metaverse real estate, and I've got a few ideas about how to do that.
1. Become a metaverse landlord
Although being a landlord in any place or time can be challenging, metaverse landlords tend to work with small to medium-sized businesses (and even very large corporations sometimes) rather than individuals. Instead of renting out an apartment attached to your home, for example, you're renting out a virtual building for an event or as a semi-permanent retail space.
Rental data is sparse, since most landlords are keeping these numbers close to the vest, but what we do know is that there are companies that do nothing but rent out metaverse land and structures to other companies, and that the clean-up and preparation for a new tenant is virtually nonexistent.
Often, you don't even need a structure (although having one can help attract specific types of tenants). Many potential tenants will prefer to bring their own buildings and artwork with them; your job will be just to ensure they have the right location for their project within the right metaverse platform.
Larger rental companies tend to have lands in many platforms, including Decentraland (MANA -0.04%) and The Sandbox (SAND 1.98%); it's their job to understand the differences between the metaverse platforms and how each can benefit a potential renter. But once rented, all you have to do is collect the checks -- there are generally no maintenance or other requirements on your part.
2. Construct billboards
Much like becoming a metaverse landlord, owning metaverse billboards or kiosks is a low-input game. The more billboards you build, to a point, the better your chances of renting them all will be, especially if you've spread them across multiple metaverse platforms. There is such a thing as saturation, however, so watch how many billboards you erect in any given area.
The platform you choose will determine the most important characteristics of a piece of land destined to become a billboard. In Decentraland, for example, users can either click on a point on the map and be taken there immediately, or they can wander around and walk across the map to find new things to see and do. In metaverse platforms built like this, billboards have a much higher chance of success when placed near popular areas and roadways, although it's hard to give precise numbers because traffic is difficult to measure at this time.
Your hardest job as a metaverse billboard owner is to find those spots and prepare them for billboards. Once you've got some solid billboards constructed and a sign on them explaining how to contact you to rent, your only job is to change the signage now and then.
3. Open a virtual gaming facility
"Gaming" is kind of an open word, especially in metaverse worlds, but for the purposes of this section, we literally mean any kind of games, from random token-operated horoscope generators to high-stakes Texas Hold'em tourneys. In the metaverse, you can build what you can imagine, and for a lot of people, what they imagine are ways of having fun. But, as an investor, you can also monetize what you imagine, and it helps pay the bills.
Online poker and sports betting, for example, are both legal in many states in the U.S. There are rules and regulations, but as long as your ducks are in a row, there's nothing stopping you from opening a metaverse poker or sports betting facility.
This is by far the most expensive way to create a passive income source from the metaverse, but as Decentral Games' ICE Poker virtual casino proved this year, a lot of money can flow back to you. In early February, it reported revenue for the prior three-month period of $7.5 million -- not too shabby for a place you don't even have to clean.
Of course, if gambling isn't your forte, there are also games of skill, like a virtual race course called "Knockout Game" (located at -29, 75 in Decentraland), where users can pay to play with their friends.
Passive income in the metaverse is real
Earning passive income from metaverse properties may seem like a fantasy, but it's a reality for a growing number of people who have various kinds of metaverse real estate-based passive income properties. As this space gains popularity, the limited nature of real estate will only increase passive income potential, since they aren't making more land, even in the metaverse's most popular platforms.
You can certainly wait to get in on this trend, but doing so risks your missing out on the best lots for whatever kind of passive income that's best for you and your investment budget. When you're done with the property as a passive investment, you can always install a more active business there, or even sell the real estate.
Profits aren't guaranteed, but land scarcity and a growing community certainly make them likely.