Digital Real Estate Investment: As Safe As Houses?

New investment opportunities are surging

Investing media always brings us more reports about exciting, new digital investment opportunities. Be it cryptocurrencies, Non-Fungible Tokens (NFTs), or, more recently, metaverse real estate, your news feed is undoubtedly filled with reports about record-breaking profits someone made on these new investment options. 

But as in any investment, you first need to deeply understand every risk before giving your savings to any choice. And even then, it is best to stop for a while. Then, think if an investment strengthens your chances to achieve your personal and family goals. 

Is it just like video games?

Let us examine digital real estate investing. First, the  “Metaverse” is a concept of an online, 3D virtual space that connects users to all aspects of their lives. Enhanced by augmented reality, the user would use a character or an avatar to connect with Metaverse elements or other users of the same space. 

So, for some of the readers that enjoy video games would think that, this sounds like their current experience. But the Metaverse is supposed to be more profound than a last-generation video game. Whole economies, currencies, governments, events, retail, and all that today we consider part of our lives will happen on the Metaverse. 

Is this the time to go into this market?

Assuming the Metaverse progresses to the point described above, is it the right moment to invest in real estate “there” to secure a promising virtual future? Unfortunately, it is not as simple as that. There are many differences between a real estate investment and a “virtual” real estate investment.

When you buy a home or property, that space is natural for you and others. It occupies actual square footage and pays a set of local and state taxes. In addition, the property is a tangible asset for the owner, a potential buyer, and the government. Thus, monetary value is possible to asses, and transactions are easier to manage. 

But in the virtual world, that value will depend on your chosen digital platform. If you invest in a well-known platform like Decentraland or a social media platform with billions of users, you will get high demand for your virtual “land”, if the land on that platform is finite. In the real world, land is a limited resource, and it is almost impossible to make more of it. Will virtual “land” be finite? Are the platforms going to limit the number of space available in their media? Will governments tax virtual “land” as they do real?

Who can help me?

You must keep track of these questions if you are thinking about becoming a virtual landlord. In The Cal Agents, we have a strong background in technology, allowing us to guide you through the decision of investing in real versus virtual property. We are ready to help customers make the best decisions.