May you live in interesting times -- it's a phrase that isn't a blessing or a curse, but a daunting prescription to those who tingle with the entrepreneurial spirit. Interesting times for us can mean a lot of things, but they almost always represent exploring uncharted financial territory. "May you live in interesting times" apparently caused investors exploring the modern virtual real estate market to throw the gates to the metaverse open and lose the lock -- because times in the metaverse are getting absolutely wild.
On Dec. 17, 2021, MetaSpace Real Estate Investment Trust (MREIT) went live on crypto trading platform PancakeSwap. Its ultimate business goal? Collect up premium metaverse real estate, build high-value virtual structures, and rent them out for profit. Just like a physical real estate trust, MetaSpace, the first virtual real estate trust, aims to create a way for a group of people to hold shares in profitable real estate projects, but in the metaverse.
Of course, you don't have to be part of a virtual real estate trust to become a landlord in the metaverse. You could simply buy your own lots in metaverse platforms and rent them back to users or companies, depending on where the properties are located. This has worked successfully for people for years on platforms like Second Life, where most of the real estate listed on its marketplace is now for rent.
Image source: Getty Images.
There are massive benefits to getting into the metaverse as a landlord right now, whether solo or as a shareholder in a larger company. Here are three of them.
1. You can earn income while your virtual land appreciates
Although platforms like The Sandbox haven't been around long enough to really get a good idea what appreciation may look like, Decentraland certainly has. Data from NonFungible.com on Decentraland sales goes back to 2017, when the native Decentraland currency, a token called MANA (MANA -1.84%), was worth pennies on today's dollar.
A lot called LAND #115792089237316195423570985008687907819241747973546717693120123264736308494287, for example, sold for the $111.52 equivalent in MANA on Dec. 17, 2017. That same lot on Dec. 16, 2021, brought $13,703.49. Imagine if you'd bought that lot years ago and rented it out! That's a huge gain on your return.
But those value leaps are also creating a barrier to purchase for people who are merely "meta curious," or simply can't see the logic behind putting $15,000 up for a virtual lot in a virtual world, thereby creating a secondary market for renters.
2. Commercial tenants are easier to find than you might imagine
Landowners in Second Life constantly put their lots and completed properties up for rent, creating an income stream from a piece of virtual real estate that they acquired potentially deep in the past (Second Life opened in 2003) and continue to hold. They generally rent to individuals, but the beauty of the modern vision of the metaverse is that a lot of commercial players are also getting into the mix.
Rather than just renting virtual houses and apartments, you could construct virtual malls, virtual offices, or virtual event space and rent that out. Suddenly, you're a commercial landlord to real commercial ventures that you can reach out and touch in the real world. Mind. Blown. Brands are getting into the metaverse big time, and they need the space to spread their messages to anyone who happens to be nearby.
3. Input costs are low in comparison to real life
Even if you commissioned a virtual structure designer to help construct a metaverse property, the input cost is nothing compared to real estate in the real world. You don't have to deal with property inspections; there are no rules about what you can and can't build (and, in fact, gravity isn't even a problem, so that's pretty cool); and there are no laws about who can occupy what and for how long.
The lot may cost you a bit, but you have zero physical building supplies to deal with, no waste, and no worrying about supply chain hiccups. It's all built of the same stuff: pixels and electrons. And those can be manipulated as needed, even if there is a resin shortage and the color blue is out of stock until further notice.
Remember to keep an eye on the market
This isn't a benefit, but it is a caution from me to you. Although I firmly believe that the metaverse is in a phase where it's ripe for normal people to jump in and build a little nest egg because of the huge companies that are headed there to try to make a fortune, there's no promise with any given platform.
This goes doubly if you choose a platform in its early stages. You may make a ton of money when it takes off, or you may lose everything when it doesn't catch on and the whole thing implodes. Unlike the real world, where you're still left with some dirt and rocks if no one wants to rent your property, the virtual world can literally disappear under your feet.
