The world is going crazy about Metaverse, and many experts suggest that this virtual world could be the future. And the effect of it is already visible around us, thanks to the emergence of blockchain, NFT, and cryptocurrency.
One of the key aspects of the NFTs is the virtual and physical assets, and real estate is the new buzz in this regard. Yes, you have read it right. We are talking about real estate properties, including lands and houses that you can buy or sell in the blockchain market as NFTs.
It is termed NFT real estate, and it could be both physical and virtual real estate property. What’s more, the sale of real estate through NFT is seeing unprecedented acceleration. Similarly, the pricing for such NFTs is skyrocketing. For instance, The Sandbox, which also creates RPG adventure games, sold virtual land for $2.8 million last year.
This single piece of information highlights the progress and hype about real estate NFTs and looking at its speed and people’s interest in it, it is safe to presume that NFT real estate is the future of selling and buying properties.
Real estate in NFT, likewise mote NFT purchases, offers a high-security level for the owners, and it’s easily traceable. On the contrary, the valuation of real estate properties in the NFT world isn’t guaranteed since its value fluctuates faster than your imagination.
Henceforth, you must read our in-depth article on NFT real estate if you are considering investing in it to remain on the safer side of the road. Even newbies would find the following write-up useful to know about the virtual transaction of properties for their future.
So, let’s jump into it.
What Is NFT Real Estate?
The technological advancement and emergence of 5G and 6G networks have accelerated the pace of digital and virtual shopping. It has even boomed the blockchain sectors and the example ns real estates sold in NFTs.
But what does it mean?
Let’s check the answer-
The NFT real estate refers to buying and selling real estate properties such as businesses, lands, and houses through non-fungible tokens. Although the entire process takes place in the digital or virtual world, the real estate properties could be virtual and real.
Many people attach NFT property with real-world property to make the transaction easier and trustworthy.
You will find the NFT properties in different sectors. The list includes but is definitely not limited to:
- Virtual business
- Virtual property, including lands and houses
- Virtual gaming maps and lands
- Virtual countries created in the blockchain
- Cryptovoxel assets
- Decentraland assets
As the current trend continues, we will soon see the inclusion of real-world properties in the NFT market. In fact, many real estate giants are gearing up to sell their properties in the virtual world through NFT transactions.
How Does NFT Real Estate Work?
Although real estate NFTs may seem a new trend and appear highly complicated, it is quite similar to any NFTs you will find. Henceforth, you will need cryptocurrencies to buy or sell NFT properties such as virtual lands, businesses, or homes. Like other NFTs, the amount is held in the digital wallet of the buyer and seller.
Moreover, the NFT market for real estate is based on share or stock market principles. It means you can own a share of the virtual real estate project instead of owning the entire project. The profit follows the rule of any share-based investment principle.
Let’s simplify it. Suppose that you own 10 tokens of a virtual real estate company. When the company makes a profit from their selling or buying NFTs for real estate, you will get a 10% profit for your share from the transaction.
Nonetheless, you are paid in NFTs instead of the real money. But, you can always sell the NFTs to make a real profit from it. This right to sell your NFTs anytime you want is referred to as severability. However, some markets may tell you to hold your NFT shares for a specific period until you sell them. Although this forced rule is pretty non-existent in the NFT world, it could be a regular phenomenon shortly, just like the real-world shares.
So, you should expect to have a minimum hold-time to sell your NFTs after the real estate transaction as the market grows.
Who Buys and Sells NFT Real Estates?
The working process of NFTs and real estate is directly linked with who buys it. Also, you might wonder who buys the virtual ownership of non-existent properties?
You will be surprised to know it. Yes, thousands of people are truly keen to buy virtual lands, homes, or countries in the NFT world. In fact, millions of people have shown their interest in buying the first piece of their NFT real estate at a staggering price.
Nonetheless, the potential buyers’ list for the real estate in NFTs includes:
- Big investors
Even large companies are interested in owning virtual lands and homes with NFTs. But why are people going crazy about these virtual assets? It is because the future of these properties is indeed promising.
For instance, Dominos has opened a virtual storefront. And that’s not all. They are even selling pizzas from this virtual store.
Next up, Nike is also gearing up to set their first virtual store, just like NFT real estate.
A Few Examples of NFT Real Estate Sales
We have discussed the definition and working procedure of real estate NFTs. We have further discussed who buys these real estates in their right mind. But, have you ever wondered about how much fortune one may make with the sales of these NFT real estates?
The following information may awe-strike you.
|Property Type||Creator||Price (in US $)|
|Mars House||Krista Kim||$500,000|
|9 lots of virtual land||The Sandbox||$1.5 million|
|Virtual land||Axe Infinity|| $2.8 million|
This pricing table may grow your interest to create and sell virtual real estate and make a huge profit from it. However, you need to be aware that there’s no guarantee of always getting a high price for the NFT real estate you create. The pricing doesn’t follow any linear line, so it depends on the market craze and going trend. So, you must be aware of it when you try creating and selling NFT real estate properties in the blockchain market.
Advantages and Disadvantages of NFT Real Estate:
While the future of NFT real estate seems pretty promising, you mustn’t get overwhelmed by it. You need to understand the advantages and disadvantages of NFTs for real estate before you invest in it to make a fortune.
Also, it is crucial since real estate NFTs are pretty new, and it is going through massive experiments. Also, the market seems pretty unstable.
The main advantages of real estate in the NFT market include:
- The NFT real estates are easily and quickly traceable. Like any NFT transaction, you may track the ownership of these virtual real estate ownership pretty conveniently.
- The ownership of the different types of NFT real estate is pretty secure. Hence, you won’t need to worry about property security as a seller or buyer.
- The virtual selling and purchasing of NFTs and real estate have become the new investment frontier these days. The ability to sell and buy virtual properties using NFTs is a great option for many people.
- These days, virtual properties are even considered a mortgage option to take a bank loan. Although the concept is pretty new, it has already seen great scope. In fact, LoanSnap has already changed its rules to allow NFT real estate as a mortgage for real loans. (We will discuss it elaborately in the next section).
These outstanding advantages of real estate in NFT might prompt you to invest in it almost ASAP.
The main disadvantages of real estate in the NFT market include:
- NFTs for real estate, likewise everything in the crypto world isn’t guaranteed. One day the value can be a few thousand dollars for virtual land, and the other day it can be zero. What’s more, the market won’t alert you about the possible ups and downs of the value for these real estate properties. Thus, it would help if you depended on your speculation, and it’s not always 100% right. So, it always runs the risk of losing your investment instead of making a profit.
- The relationship between virtual real estate and NFT is bleak and complicated. It mostly leaves people—especially newbies, awestruck with these real estates in the NFT world.
Since virtual real estate is linked with investment risks, we offer you a quick solution. You can trust the NFT real estate that at least has a fraction of it directly linked with real-world real estate properties. It will reduce the risk of losing your investment due to a sudden change in the valuation of your NFT real estate.
NFTs Application for a Mortgage as Real Estate Property
We have mentioned that a few mortgage companies and banks have slowly but surely started to accept the NFTs as a mortgage for real loans. Of course, it is in a pretty early stage, and it is indeed difficult to predict the future.
But, looking at the trend, it is perhaps easy to say that NFTs will soon become popular as a mortgage medium, although it hasn’t been widely accepted.
In fact, LoanSnap has already issued their first NFT mortgage for one of their home equity loan. They used Bacon Protocol to allow the loan issuing for the virtual NFT as a mortgage.
However, the evaluation process of NFT real estate is a bit complicated. The minting amount of the NFT mortgage isn’t at a considerable stage yet. Moreover, the small amounts of NFTs for a mortgage that have been minted aren’t available for crypto investors yet. Fortunately, authorities are working out to sort out the problem.
For instance, LoanSnap, in a recent meeting, said that they would issue Stable Coin for the mortgage. This stable coin is named as bHome. This coin will represent fractional ownership of the NFT real estate property, and the bank will allow it to issue mortgage notes.
However, to date, this is not pretty clear. We will have to wait to see how the changes occur and how various banks see these changes.
Physical Vs. Virtual Real Estates in NFT
We have repeatedly been mentioning that the future of NFT seems pretty promising due to people’s interest in it. Also, it has incorporated both physical real estate and digital real estate for a futuristic plan.
Yes, you may even register physical real estate properties in the NFT and blockchain platform, although it isn’t a trend yet.
Nonetheless, experts believe that the difficulties registering physical assets in the NFTs will soon be solved, and people will be able to register their real-world and physical properties to sell using NFTs.
And as for digital real estate, aka virtual real estate, you should be able to register it easily. Since there’s no specific rule to register virtual real estate in NFT, you shouldn’t face any problem with it.
The Metaverse and sandbox are the two of the most popular platforms of virtual space where this digital real estate is found.
These virtual platforms are interactive. It means clients can indeed interact between them. Also, they can construct almost everything within this virtual world. Among these virtual spaces, “Minecraft” surely tops the chart.
The virtual platform for real estate truly functions like real-world real estate. The virtual space will allocate little parcels for the virtual real estate, just as with physical real estate. Various platforms have different limitations on how many real estate parcels will be available within the platform. It helps the market regulate their pricing and availability just like the physical world would do for their real estate.
Decentraland, for instance, has 96001 plots, and they marked these plots as land. You can own one land through an NFT called MANA. Isn’t it similar to how you would have bought land in New York City from physical real estate?
The Future of NFT Real Estates: Is it Promising or Bleak?
When predicting the future of real estate NFTs, we have to consider many related fields, such as NFTs value, blockchain security and progression, Metaverse and virtual world technology, etc. Even after that, the future of NFT can’t be predicted with 100% accuracy since it is pretty much in its infancy state.
Theoretically, NFTs will allow users to transfer the ownership of their virtual world properties with easy and secure transactions. But to date, the transferring process is limited to shares of properties instead of the entire property. We would also like to suggest you wait for a few years when NFTs in real estate are actually permitted to transfer the entire ownership.
Nonetheless, the future of real estate NFT is highly promising as different multinational and technical giants are showing interest in this sector.
For instance, Facebook has already changed its name to Meta Verse and predicts that people will become more engaged with virtual interactions with their interactive platform. Apple has already invented its virtual products, including VR, to interact in the virtual world.
Plus, the emergence of 5G and 6G technologies means that people will find a better opportunity and lucrative promotions to get involved with virtual purchases ever than before. Henceforth, it is perhaps safe to say that NFT in real estate will be a secure medium of transferring assets.
Some experts even estimate that exchanging physical real estate assets using NFTs will become normalized within the next few years. So, it is perhaps the best time to invest in the real estate NFTs as it is still in the early stage, and the pricing is relatively low.
But that leads to another question, “Where do you buy or sell your real estate NFTs?
The following discussion will surely help you in this cause.
Tips On Purchasing NFT Real Estates:
Although many people won’t believe it, you can indeed purchase real estate NFTs is as convenient as it gets. It is much like setting up your first crypto-wallet. You can purchase your real estate NFTs from the following platforms.
OpenSea is among the fastest-growing marketplace for buying and selling NFTs. The company is based in New York, USA.
The company has raised $23M as part of its ongoing ventures with different artists and investors for digital arts.
They also allow the purchase and sale of virtual properties such as lands and homes, aka NFT real estate. Ethereum is their main cryptocurrency for any transaction. You need to pay a nominal gas fee for each transaction to be completed, but it’s worthy of any investment.
You can use OpenSea software to create and build your marketplace. You can also set your fees in the marketplace. Hence, it offers you a complete package, and you also have full control over the NFTs you would spend for real estate.
Cryptovozoxles is growing steadily, and some people think it is actually a joint venture of Minecraft and Facebook (Aka, Meta Verse). Although we don’t know the platform’s origin, we can definitely say that it has serious potential for NFT real estate buyers and sellers.
The parcels in this platform have 6 dimensions, and it determines the location of your purchased land within the Cryptovoxels World.
The good thing about this platform is you can procure it using OpenSea, which we have mentioned in the previous part.
Another advantage of the platform is its growing market value. Already, users have developed 80% of their purchased land in the Cryptovoxels world. Thus, its land development process is faster than most people imagine. Plus, its speedy and steady growth means you can trust its market valuation and security for your NFTs.
Last but not least, users have found the platform truly intuitive and engaging to build their real estate properties. You can start with your browser, and the platform allows adding audio files, colors, and images for an excellent interactive experience.
Each transaction is processed through the NFT Ethereum blockchain and is highly secured.
Decentraland is another popular virtual world and has seen outstanding growth in the past few months.
It is based on Ethereum Blockchain, and its currency name is MANA.
You can visit their virtual shop to buy and sell your virtual product and even services in the Decentraland community. You may visit Decentraland without owning land in the virtual world. However, we would suggest you buy a small share of land in Decentraland since it is showing tremendous growth. A parcel or share of land in the community could make you a millionaire within a few years.
Also, it is the best time to invest in Decentraland since they are counting each land or parcel in the platform as NFT and the gas fee required for every purchase is relatively low to date. Since their lands are equivalent to the NFT blockchain, it is secured, unique and irreplaceable.
For selling and buying lands in the platform, you will primarily require Metamask, and you can purchase it in Ethereum platforms with ease. What’s more, it will let you rent your parcel or lands just like real estate in the actual world.
Is It Worthy to Buy NFT Real Estate?
NFT marketplaces and virtual real estate perform brilliantly, and its prospect seems truly amazing. But is it worth buying real estate NFTs now?
The answer is yes, it is worth investing in NFT real estate. In fact, experts suggest that, and even a report at BISNOW suggests that NFT could be the future of buying and selling real estate both in the virtual and actual world.
To be frank, many people have already purchased virtual lands, and the price of the remaining shares on Decentraland and Cryptovoxels are skyrocketing. Hence, the early you invest in the real estate NFTs, your purchase should be less expensive.
Yes, many people would argue that the future of these virtual purchases and NFT is pretty uncertain. Yet, the transaction process is secure, and your NFTs are sellable, which should prompt you to buy a piece of real estate property without hesitation.
So, here’s our conclusive idea-
You should invest in a small share of the NFT real estate without spending thousands on it. The secure payment method, promising future, and increasing virtual home and land price will be of huge benefit for investors, collectors, and even gamers soon. So, you mustn’t fall behind the trend as it will soon become another neo-normal scenario.
NFT real estate has tremendous potential to grow in the near future. If you think of investing in NFTs and blockchain, it could be your best opportunity. The payment methods are secure, and you will definitely find it worthwhile. Also, different platforms have a limited share of parcels in virtual homes, land, and countries.
Hence, the price will surely go up, and you could make a big fortune by selling real estate NFTs. Plus, different companies are investing heavily in virtual real estate and even connecting a portion of it with physical assets. Henceforth, it would be best if you didn’t wait to see the real estate pricing go beyond your reach. It’s high time you choose the NFTs for real estate.