3 Ways Metaverse Mortgages Will Affect Virtual Real Estate

If you were lucky enough to get into metaverse real estate in the first half of 2021, you might only need a few hundred dollars to purchase whatever lot you want. Boy, how things have changed since then. While there are certainly still platforms where this is possible, the more popular platforms with purchasable land, like Decentraland and The sandbox, now require thousands of dollars just to buy a small piece of land in a residential area.

With such a price appreciation, one of two things was inevitable: either prices would collapse with falling interest, or someone would find a way to provide a secured loan to encourage more of these purchases. And, as interest in the Metaverse seems to only heat up, what we got was the second thing. A few brave companies are trying different ways to take out NFT-backed loans, and as this spreads, it’s going to catch the metaverse on fire.

I can think of so many ways this will affect virtual real estate next year (and beyond).

Image source: Getty Images.

1. More interest in metaverse real estate will be generated

Right now, a lot of people are watching real estate prices in the metaverse and grimacing, not sure if they’re willing to part with that much money for real estate that they’ll never be able to visit. In the flesh. Despite the absolute speed of value growth, similar to a rocket, it may seem excessive to deposit $ 15,000 for a lot in Decentraland, for example.

But a mortgage on a $ 15,000 NFT might look different, especially to a curious user or an individual metaverse real estate investor. If you can borrow against your crypto coins or, better yet, your other holdings in the Metaverse, it will allow an investor to acquire more and more real estate faster, before the prices go crazy again.

Every day, new people interested in virtual real estate take a look at what is possible for them, their budgets and the worlds they explore. These mortgages would give them an easier path to homeownership now that their journey has already taken them there. They will tell their friends about it and develop the virtual world just by having experiences unique to the virtual world.

2. The more people adhere to the metaverse, the faster it will grow.

Just as having more affordable and achievable mortgages results in higher homeownership rates, being able to finance Metaverse real estate is another way to stimulate interest in the Metaverse itself. same. Property creates community even though that property is owed on a loan with monthly payments due. In a place like the Metaverse, building community can mean almost anything, but it definitely means one thing: growth. How does it work for you? And that’s good because the Metaverse is more than just a series of games; it’s a whole new environment for people to have new experiences and meet new people.

When people invest in neighborhoods – both online and offline – they attract more people with similar interests and wants, and the entire neighborhood increases in value, desirability, and amenities. Unlike the real world, there’s a lot less to worry about with things like crime in the Metaverse, but it’s still possible for a neighborhood to decline due to disinterest.

3. Young players can access the real-world real estate ladder

Stay with me here, I know it sounds like coocoo banana pants. But there are a whole bunch of people out there who can’t afford to buy physical real estate which is a terrible thing for them because they seem to want all the commitment that comes with it very badly. Not being able to purchase physical property also means that they are not enjoying the equity gains that tend to be natural for much of the real estate market.

However, if they can buy something more accessible that also gains capital, like a virtual house or even a metaverse mall, well, now they have something. These are people who are already spending their free time in some virtual world – they might as well buy one and see their money grow.

There is a certain pride of ownership that comes with owning real estate, real or otherwise, and it should eventually become an asset class that can help these people move up the real estate ranks in the real world. . Instead of a small two-bedroom starter house, the ownership ladder could potentially start with a small residential plot in a virtual world, offering younger people something they can invest in and sell for real money. , leading to more routes to the real world real estate property over time.

This article represents the opinion of the author, who may disagree with the “official” recommendation position of a premium Motley Fool consulting service. We are motley! Challenging an investment thesis – even one of our own – helps us all to think critically about investing and make decisions that help us become smarter, happier, and richer.

Comments are closed.