Virtual Mortgage
Over the past year, it has been difficult to afford real estate. Reports have shown that housing prices have skyrocketed between 15-20% in the past year alone. And purchasing property is not only expensive in the real world, but it’s expensive in the virtual world too. Virtual property has gotten so expensive that you can now get a mortgage on it.
Large plots of land in virtual world platforms like Decentraland and the Sandbox are now worth millions of dollars, and you can now get a loan to purchase the land. A metaverse developer, TerraZero, claims to have provided one of the first mortgages in the metaverse for a $45,000 plot of property in Decentraland. People have been borrowing against NFTs for quite some time now, so I guess it was just a matter of time before someone started offering loans for virtual property.
TerraZero vetted the buyer’s creditworthiness and required a down payment, like a traditional lender would when issuing mortgages. However, compared to the physical world, where 30 or 40-year mortgages are typical, this loan is only two years long.
TerraZero’s CEO, Dan Reitzik, said “Everybody wins. Young people can’t own properties in the real world right now, but they can certainly own properties in the metaverse.” Would you be willing to purchase virtual property instead of real estate in the real world? Some properties in the metaverse are much cheaper than physical properties for now. Maybe this is because you can’t actually live in a virtual property–not yet at least.
I am not a financial advisor and my comments should never be taken as financial advice. Investments come with risk, so always do your research and analysis beforehand.
