The sale of virtual lands happens daily in Decentraland, but a recent purchase by property investors took virtual land investment to a whole new level. According to Yahoo Finance, 259 parcels or 16 acres of digital land bought by Republic Realm cost more than $900,000, the most expensive purchase of NFT land ever. NFTs, also known as non-fungible tokens, have been a hot financial investment topic in the art industry. However, in recent months NFTs have become increasingly popular in the real estate investing sector. The ability to buy and sell property on blockchain-based platforms like Cryptovoxels and Decentraland indicates that blockchain is reshaping the real estate market. If you’re looking to invest in this blockchain-based real estate trend, read on to learn how NFTs could transform property investing.
Rise Of Virtual Real Estate
Oddly enough, many property investors are investing large sums of cash for virtual real estate property. As the name suggests, virtual properties are intangible plots or parcels of land that exist only in a blockchain. It’s worth noting that the price of virtual lands or fields depends on how much one is willing to spend. For example, Mars House, a digital real estate property sold at $500,000 on an NFT marketplace.
A few months later, investors completed virtual land sales worth $3.5 million in The Sandbox, a metaverse on the blockchain. If you’re like many people, you might be asking, why invest in NFT real estate? For many investors, the uniqueness and ease of property transfer from the seller to buyer provide added value to their investment.
Aside from making virtual real estate a reality, NFTs could change the mortgage industry by improving the home loan process. The current mode of obtaining mortgages is expensive and labor-intensive unless you are lucky to find a mortgage lender committed to providing excellent customer service. According to The Home Loan Expert, a customer-centered mortgage lending process should be streamlined from start to finish. This means the lender has the entire home loan process under one roof. That way, they can close your home loan quickly and efficiently.
As the real estate sector embraces NFT, borrowing home loans could be less stressful. That’s because tokenizing property rights makes the process of managing and trading homes easier. Ideally, you can buy an NFT real estate property and borrow against it immediately at a 2.4% interest rate using products like Defi and TradeFi.
Promotes Fractional Property Ownership
As an investor, you can use NFTs to tokenize your physical real estate to create a representation of ownership in the digital space. Doing so allows you to sell part of your property to a small or large group of investors. Since NFTs are sold in a decentralized marketplace, you have to issue tokens to property buyers. If the investors choose to hold the tickets, they can receive rental income or profits split based on value appreciation upon property sale. Ideally, NFTs could pave the way for many investors to consider fractional ownership in the real estate market.
NFTs or non-fungible tokens have become popular in the real estate industry, as they allow investors to buy or sell digital properties. This new blockchain-based tech trend will impact the property investing scene by promoting the rise of virtual real estate. Industry experts also claim, it will encourage fractional property ownership, and streamline the mortgage lending process.