Founded in 1993 by brothers Tom and David Gardner, The Motley Fool helps millions of people attain financial freedom through our website, podcasts, books, newspaper column, radio show, and premium investing services.
Founded in 1993 by brothers Tom and David Gardner, The Motley Fool helps millions of people attain financial freedom through our website, podcasts, books, newspaper column, radio show, and premium investing services.
Motley Fool Issues Rare “All In” Buy Alert
You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More
Although things are starting to look up a bit across investment markets, it’s clear that the crypto winter has yet to thaw enough to put away our snow boots. Signs of thawing there are, though, and they point to an end of snow and ice — eventually.
There are still lots of opportunities to buy the dip in crypto assets like non-fungible tokens (NFTs), including metaverse real estate. Virtual real estate, unlike many other NFT assets, has utility far beyond its sticker price. Even so, who doesn’t want to score a bargain?
Here are a few reasons to buy the dip in the metaverse while you still can.
Although it’s true that on average, virtual land prices have been pretty depressed since about March, this single data point doesn’t really tell the whole story. The percentage of properties for sale in both Decentraland (MANA) and The Sandbox (SAND) have to dipped to serious lows since that time, with sales in Decentraland hitting 0.97% in July, and those in The Sandbox dipping to 1.01% in June.
Both Decentraland and The Sandbox have seen a similar drop in for-sale properties, indicating that speculators may well have exited the platforms for now, since the cash left to grab is no longer fast and easy. Simply put, the number of properties that are available for sale at this time is very few, as more owners seem to be holding on to their virtual real estate. But despite that, some properties are still bringing in more than their initial sale prices.
For example, The Sandbox LAND 152034 originally sold on July 22, 2021 for $2,290.93, and recently resold on July 14, 2022 for $5,540.70, a near 142% gain from the initial sale price. In Decentraland, EST 3723 recently sold for approximately $82,391, significantly up from its initial price on Jan. 24, 2021 of just over $23,000.
Whether you’re looking to buy metaverse real estate as a marketing tool for an existing company, or as a bigger investment in a metaverse real estate rental portfolio, spending less money on that property means significantly lower input costs for your project. That lower long-term investment can make your marketing costs far more affordable, or your rental units return even more dramatically than if you’d have bought in December.
In a recent interview with Fast Company, Sam Huber, the owner of Admix, a virtual real estate developer and landlord, explained that the properties his company had custom-designed and rented back to brands have been bringing up to $60,000 per month per property, with some returning profit margins as high as 70%.
Just like real-world real estate, rental rates are based on the market, not on the price you’ve paid for the real estate. Paying less today means more money in your pocket monthly, and more equity in the long run.
The metaverse is still a place that people are absolutely fascinated by and are interested in investing their time and money in. This has proven true across a variety of new projects, including Bored Ape Yacht Club’s Otherside (APE), which continues to see a lot of sales. For example, Otherside had 4,706 sales, worth over $30 million, for the 30-day period ending July 27, 2022.
The fact that new projects from brands like Keurig Dr. Pepper‘s (KDP) Snapple and Paramount Global‘s (PARA) CBS are still popping up in the metaverse regularly points to money that’s still pouring into this emerging realm of technology. As the metaverse continues to grow, there’s a whole lot of long-term potential for virtual real estate investors.
Kristi Waterworth has positions in ApeCoin, Decentraland, and Sandbox. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.
*Average returns of all recommendations since inception. Cost basis and return based on previous market day close.
Market-beating stocks from our award-winning analyst team.
Calculated by average return of all stock recommendations since inception of the Stock Advisor service in February of 2002. Returns as of 09/03/2022.
Discounted offers are only available to new members. Stock Advisor list price is $199 per year.
Calculated by Time-Weighted Return since 2002. Volatility profiles based on trailing-three-year calculations of the standard deviation of service investment returns.
Invest better with The Motley Fool. Get stock recommendations, portfolio guidance, and more from The Motley Fool’s premium services.
Making the world smarter, happier, and richer.
Market data powered by Xignite.
About Author
