Have you ever wanted to buy a house in the virtual world of the “Second Life” universe?
Well, now there’s a way to make your virtual residence appear real in reality. And it has a big enough payout that some investors are paying over the odds to get their virtual properties.
“For the people who do spend the money, it is a fantastic investment,” says Tim Lin, founder of CocoThink, a virtual environment company.
Virtual property investor Metaverse Real Estate is offering a virtual-world-like version of a deed for $90. “If you find that property, you can purchase it. You can then rent the property out,” explains Lin. “We had someone who put $100,000 down to get a three-bedroom place.”
Investors are buying property with “real money,” he says. “The only people who are in it for the investment are people like me, who have $90,000.”
Virtual worlds like “Second Life” are particularly popular among cyber gamers. But the form of investment comes with a few risks.
Before the launch of CocoThink’s new virtual real estate website, Lin says he witnessed five virtual ghost towns up for sale.
“You can imagine that, if a developer started renting them out, there are bad tenants who may not pay the rent, and the property is devalued,” he says.
In CocoThink’s world, which you can use to send friends, a “ghost town” is any building not populated by real people. These ghost towns are built “in the image of a city with all the road blocks that it would have in real life, but if it isn’t inhabited, we don’t make any money on it,” he says.
One of Lin’s biggest challenges is to convince people to become “portal users” — who have a login, but are not part of the CocoThink world.
“If you are an ex-Portal user, you have to buy a module that allows you to be in CocoThink,” he says.
At a cost of $3,000, the modules allow you to move to CocoThink. Buying a personal virtual residence can cost more. Lin has had people pay as much as $30,000 or more for their real-world avatar to live in his virtual world.
Lin was a software engineer before he started buying properties and offered real money to people to invest in CocoThink in 2006. Since then, he has bought over 50 virtual houses.
Lin has gone through an “interesting journey,” he says. “People have been very supportive. They say the reason why I am doing this is that I’m afraid of being screwed.”
Lin is confident there will be many other investors like him, if virtual real estate interest continues to grow.
According to Chang Kim, CEO of New Virtual Reality Solutions, there are over one million residents and over 8 million tourists on virtual worlds like “Second Life.” “The secondary impact of building property is the potential trickle-down to the real estate market. It is very likely that in the next 5-10 years, virtual real estate will impact the real estate market in some way.”