Digital Real Estate | A New Era of Investing [Complete Guide]

by | Jan 18, 2023

In today’s increasingly digital landscape, exciting new ways of making money are constantly popping up. Last year, NFTs took the world by storm. In 2023, the attention is shifting to digital real estate. While the concept of owning digital property is nothing new, it’s evolved tremendously thanks to the introduction of the metaverse.

For anyone looking to earn money online by starting a digital real estate business or buying digital assets, it’s essential to educate yourself on the ins and outs of this new digital world. In this guide to online real estate, we’re covering everything from how to purchase digital real estate to whether or not it’s worth investing in. Let’s dive in. 

What is Digital Real Estate?

To understand digital real estate, you first need to know what digital assets are. A digital asset is anything that exists in the online world and holds value. Traditionally, the most common digital assets have been domain names, websites, smartphone apps, and accounts on social media platforms. Nowadays, it’s a little more complicated. 

Through virtual land that exists in the metaverse on blockchain technology, you can now purchase blocks of real estate. Think of it like buying land on another planet, except that this planet only exists online. 

After buying digital real estate, you can use your virtual property to open a shopping mall and lease to tenants, open a billboard business to sell ad space or host virtual events like concerts and parties. Alternatively, you can purchase digital real estate to flip it for a quick profit. 

All the reasons to invest in physical real estate could be reasons to invest in virtual real estate. The only difference, of course, is that everything you do with your land takes place in the world of virtual reality rather than in the physical world.  

How to Create Digital Assets

If you want to create your own digital asset, there are a few ways to do so. As we mentioned in the last section, digital assets can be any digital products that hold value. Creating your own could include a photo you took and own intellectual property rights to, an eBook you created, an online store you run, or music you produced.

For someone looking to start their own business from home, creating a website or blog is one of the best ways to create a digital asset. While building a website comes with quite a bit of upfront work, it can become a fantastic digital investment down the line if you’re willing to put in the effort. 

Take this website, for example. When I started The Pursuit of Passive Income, I put in a ton of work to ensure that my online business would succeed. In the blogging world, that means writing stellar content based on what people are searching for and building authority within a specific niche. 

The higher your site ranks on Google, the more website traffic you’ll get and the more money you’ll make. While running a website or blog requires consistency, it’s a great way to bring in passive income since you can make money from it while you sleep. 

Bonus: Check out our Beginner Blogger Free Course to get started with your own digital real estate business today!

How to Invest in Digital Real Estate 

Nowadays, savvy investors everywhere are investing in digital real estate. Much like purchasing a physical property, buying online real estate is a gamble. However, it’s worth noting that there’s significantly less risk involved in purchasing digital real estate compared to other investments like cryptocurrency or the stock market. 

As we discussed earlier, digital real estate comes in many forms. While you can buy land parcels online, you can also purchase other types of digital real estate like domain names, websites, social media accounts, and apps. For the sake of this particular guide, we’re going to focus more on digital real estate as it pertains to the metaverse.

If you’re interested in diving into digital real estate investing, now is the time. Here are some of the top marketplaces to buy online real estate:

  • Decentraland ($MANA) – Decentraland is one of the most popular virtual real estate marketplaces for internet entrepreneurs. Decentraland operates on the Ethereum network and allows users to buy and sell land, estates, and other digital assets.
  • Sandbox ($SAND) – A virtual metaverse that allows users to play, build, own, and monetize their gaming experiences. In December 2022 alone, Sandbox sold over $1.6 million in virtual land.
  • OpenSea – The world’s first and largest NFT marketplace, OpenSea is a massive platform where investors can buy, sell, create, and trade NFTs. 
  • Axie Infinity ($AXS) – Axie Infinity is the NFT marketplace for a popular crypto video game where users can buy and sell NFTs for the digital land, items, and creatures used in the game.

Pros and Cons of Online Real Estate

While we’re still in the early stages of NFTs and digital properties, many of the world’s most successful investors believe it will blow up. 

You could purchase digital real estate for pennies on the dollar compared to what it will be worth someday, so there is a significant upside. 

bitcoin, blockchain, crypto

But before you decide to empty your bank account, be sure to consider the benefits and drawbacks of digital real estate. 

Digital Real Estate Pros

  • Low initial investment 
  • Potentially high returns
  • Less risky than physical real estate investments
  • Fast appreciation
  • Flexibility and autonomy
  • Accessibility no matter where you are in the world
  • Allows for portfolio diversification 

Digital Real Estate Cons

  • High risk 
  • Few educational resources
  • Cyber insecurity
  • Lack of predictability 

As a general rule of thumb, you should never invest money you aren’t comfortable losing. You could make a bunch of money, but you could also lose a bunch of money. Like any other investment, it’s a gamble! Go into the digital real estate game with an open mind, but try to keep your expectations low to avoid disappointment. 

Digital Real Estate FAQs

Still have questions? I have answers! Let’s review some of the most common questions about digital real estate investing and the virtual world.

Can Digital Real Estate Make You Rich?

Sure! Let’s be honest, anything can make you rich these days. Does that mean there’s a high likelihood of digital real estate making you rich? Absolutely not. 

freelance, work, job

Like anything else, profiting from digital real estate investing requires knowledge, skill, persistence, and luck. If you’re looking for a passive income source, investing in the digital universe is worth considering, but it’s certainly not a “get rich quick” scheme. 

Is Digital Real Estate an NFT?

While digital real estate in itself is not an NFT, it’s bought and sold using NFTs. Think of it like this: When you buy physical real estate, you get a deed. 

In the virtual world, you get an NFT that contains your proof of ownership. If and when you choose to sell your virtual land, you would give the buyer your NFT in the sale.

How Do You Acquire Digital Real Estate?

You can acquire digital real estate by building it from scratch or buying it. Building your own digital real estate refers to creating digital products of value like a social media account, online courses, apps, and your own website (like an e-commerce website, for example). 

banner, header, monitor

On the flip side, buying digital real estate could mean buying domain names, pre-built websites, or land parcels in virtual worlds.

Is Digital Marketing Necessary for Digital Real Estate?

Digital marketing (particularly social media marketing) has been a valuable tool for traditional real estate businesses for years. As a business owner, it’s up to you to decide whether you want to create content to market your digital property to prospective buyers. 

If you want to be successful in the digital world, you should definitely be marketing your digital real estate just like you would with real-world real estate.

Final Thoughts: Is Online Real Estate Worth It?

Still wondering if you should buy digital real estate? Intangible investments like NFTs and digital assets can be difficult to wrap your head around, so it’s understandable to be wary. 

It’s important to remember that part of being a successful investor is staying up to date with the latest trends, adapting as new advancements are made, and knowing when it’s a good idea to take a risk. 

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About Michael Morris

About Michael Morris

Michael is a commercial real estate investor turned blogger. He founded Pursuit of Passive Income with the goal of helping its readers achieve financial freedom and create a life they love. Read more about Michael’s Story Here!