6 Metaverse land rent use cases
The date was december 2017. You had bought this virtual land selling on Decentraland, the plot is number 3062541302288446171170371466885913903123, and it was selling for 5000MANA, an equivalent of around $500 at the time.
Your friends said you have gone nuts and certainly out of your mind. Maybe you weren’t so sure about it either, but you gambled on it anyway. Do you know that at today’s value (as of January 2022), that same parcel of land will fetch you $10,000?
You have effectively 20X your money in 5 years. This is the madness the market has been experiencing thus far.
As the price of virtual land continues to increase, it will create a scenario where not everyone will be able to afford to buy the land, and hence, they will turn to renting. This is all too similar to the real world, where people rent houses from their landlords because they can’t afford to buy one.
This article will describe the forms that renting virtual real estate will take and how you can profit from it.
1. Buying to hold value since it is an NFT
Even if you do not sell or rent your piece of land, that virtual land will continue to increase in value. As in our decentraland illustration, the value of your investment doubles every 6 months. This is, in itself, enough to make you get on the train.
But of course, this is not the main reason you are reading this article.
2. Building the land and renting
Anything that can be done in the physical world can indeed be replicated in the virtual world.
As with most people who buy a piece of land or a piece of apartment and rent it out, this exact template can be carried over to the metaverse with the added advantage that you don’t need to deal with inspections, building codes, and all the plethora of bureaucracy that is associated with traditional real estate.
You can even go on to have lots of real estate portfolios.
But what if you have some real money? How would you invest in the metaverse land? The next point addresses this.
3. Setting up businesses in the metaverse
In November of 2021, Republic Realm, a virtual real estate investor, splashed a staggering $4.3M to purchase land in the SandBox metaverse from Altari. The deal, which involve the acquisition of a 24 by 24 parcel with each parcel measuring up to 100m, is, as at today, the biggest virtual land purchase.
The question is, what do they intend to do with such a purchase?
A few logical answers come into play. The obvious one is that this virtual real estate space is on an upward curve. The prices of these NFTs will only increase, and they can flip them for a profit.
But Republic Realm is run by a CEO, Janine Sorio, a woman who has worked for a decade in the real estate space.
People like her know that the real value of a piece of land is not in flipping it, it is in developing it and renting or selling it out.
This, indeed, can be seen to be the long term vision of such a purchase. They intend to create an entire city and whoever wants to be allowed through the gates would either pay an access fee or be allowed to go in for free while they try to sell other products to such a person.
Perhaps, you do not have as much money as Republic Realm (just like me) but you could as well do it on a smaller scale. Individuals can as well buy a piece of land right now and build a shopping mall that they can later rent out to interested business people.
4. Renting to fashion houses and brands
Untimately, the biggest defining factor of any metaverse will be its ability to attract people. Brands like Nike or Victoria Secret are all in for the eyeballs. If people are spending significant time in a particular metaverse, brands will like to come in to display their products.
Think about Times Square in New York and all the massive screens plastered on those buildings. Those are advertisement gold mines for the owners of such buildings.
This exact thing will happen in the metaverse, where well positioned buildings will be up for some serious advertising dollars.
5. House tours
In Upland, if you take a tour of someone else’s property, the owner of that property will receive up to 150UPX.
This, of course, is a form of revenue for you, the landlord, and properties that are elegantly designed or are near special districts like a fashion or casino district, where people tend to flock, will receive a lot more tourists.
6. Virtual air b n b
Let’s say you rent a house on a metaverse for a month. You may as well sublet it in the form of an Air B n B and allow people to use it so you can collect rent.
Of course, this same model can be applied to a property that you directly own, and your house or apartment could be booked for days or months while the money keeps coming in.
The possibilities of this thing are just limitless.
Data from Nonfungible.com, Decentraland, as well as from Republic Realm has been used to compile this article.