NFT In Real Estate: Do NFTs Impact The Future Of Real Estate?
People tend to spend more and more time in the virtual world. In addition to studying and work done in this way, we can see lots of new ways the virtual world is used nowadays. One of them is listing NFT real estate properties.
Known as non-fungible tokens, NFTs have become a breakthrough in the digital art scene, but now they have gone much further. Nowadays people can buy NFT properties stored in the blockchain that are represented only in the digital world as well as ones that come with real buildings existing actually. What kind of real estate phenomenon is it and will it change the real estate business greatly? Let's find out now!
What are virtual real estate NFTs?
The first digital house in the form of NFT was a virtual artwork called Mars House developed by Krista Kim. It appeared back in 2020 and was purchased for over $500k at an auction. It became an encouragement for artists to work on new metaverses that allow people to visit popular destinations in the virtual world. Currently, these metaverses are divided into several types attracting people from different groups, but the most popular of them are still department stores and museums!
What has contributed to the popularity of NFTs?
The necessity to isolate brought about by Covid-19 pandemic encouraged many people to discover new experiences online first of all. One of them was metaverses where they could communicate and spend time with pleasure. It resulted in the development of digital worlds interesting for others and forced tech professionals to cooperate with real estate experts in search of interesting solutions.
The Mars House NFT has been opened to the public as a virtual tour destination. Krista Kim in partnership with Spatial suggested people to have self-guided tours around this digital property selling tickets for $200 each and even rent this space for special events if they like.
Virtual vs physical real estate
There is little difference between virtual and physical real estate with the only one exception: it is impossible to live in the metaverse physically. However, it doesn't prevent people from enjoying a variety of their favorite activities since many of them are available there too. It is possible to decorate homes, go for a walk with friends, and visit different places of interest there.
No wonder that such versatile examples of real estate can be considered for investment as well. Similarly to people who tend to invest in actual real estate, there are investors interested in metaverses too. So now virtual real estate is traded like real one and has been recognized as a comparable asset class too.
What's similar in virtual and real-life properties?
Though it may sound unbelievable, both these property types have much in common. It isn't a secret that downtown property in metropolises is always more expensive, and this concept works in the virtual world too. Nowadays, the most interesting and pricey metaverses are downtown districts with various content and more possibilities.
One more common thing about both of them is scarcity. Modern buyers have to choose homes and commercial property from a limited offer, and the same goes for virtual spaces too. There is a limited number of parcels that symbolize land acres in these metaverses, so it is not surprising why they are sold for big money. Being a hot commodity, not everyone can get such an NFT and some of them are even offered with mortgages!
The third similarity is rental properties of both property types. Like traditional apartments and homes rented by tenants, virtual homes can be rented too. The only difference is finances. These financial decisions with virtual properties are based on DeFi software so smart money decisions are made using automated workflow.
How virtual and real-life worlds merge
It's not a secret that real properties may get their virtual copies or vice versa. One of such examples has already been purchased in California where a real home has received a digital replica and become an NFT. The expert says that the main significance of such purchases is the possibility to sell property via a digital platform and being one of the pioneers who bought such an NFT home through a crypto platform.
Virtual real estate advantages
The main benefit of virtual worlds is the possibility to let many people gather in one place under any circumstances. Though they can't be physically in this space, a metaverse can be visited by people located anywhere on the globe and by a much bigger number of visitors. One of the ways it can be used by companies and advertisers is marketing possibilities making it possible to reach that audience that was usually missed. Probably, you have heard of IKEA that took advantage of virtual reality and arranged its furniture on one of the islands in a video game. This approach allowed the company to attract those customers who could not be interested in getting this furniture in real life.
One more way how these virtual homes have transformed the world is socializing possibilities. The necessity to stay at home because of the pandemic encouraged people to look for new ways of interaction as well as find new approaches to making purchases and doing shopping. It won't come as a surprise when metaverses will be used for this purpose too.
The main disadvantage of metaverses is their high cost estimated at hundreds of thousands of dollars, but even that isn't an obstacle for marketers looking to expand their audience.
What is the influence of the virtual world on the real one?
One of the innovations that Covid-19 has made traditional for people has become virtual tours that allow visiting any property for sale without actual visits of it. Everyone can appear in the property for sale feeling the comfort of his or her home and being in safety, but is it everything you can get from metaverses?
Of course, not. Nowadays it has become popular to develop realistic renderings of newly constructed homes. Such metaverses will make it possible to understand what tenants are looking for and what preferences they have. These digital projects may become collective ideas of properties that will be popular with buyers and may have a representation in the real world in the future. It means that NFTs can make a revolution in the real estate sphere since dream homes of some artists in metaverses may soon become popularized in the real world and become prototypes for massive construction.
What does it all mean?
It goes without saying that technology is a driving force of the modern real estate industry. Being one of the oldest spheres, it will remain popular in the future as well since there will be a constant need for real estate while humans inhabit this world!
How not to follow behind? Probably, it is time to learn more about property technology and start investing in it to adapt to these changes faster and keep up with the latest trends. One more way to stay up-to-date is to install proptech in your home and follow how it can alter your everyday life for the better! No matter what you will choose, it is time to embrace the future now if you want to be competitive in the modern real estate industry!