With real estate in the metaverse going for millions, investors can now take out a mortgage for virtual land. Canadian metaverse tech company, TerraZero, has just issued what it claims to be one of the first mortgages in the metaverse.
“We get hundreds of inquiries a day — ‘Can you help us buy property?’ At first, we thought, ‘That’s kind of crazy,’ and then we were like, ‘Why not?’” TerraZero 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,” he added.
The mortgage was for a $45,000 commercial land parcel located in the entertainment district of Decentraland. A five-storey structure can be built on the piece of land to lease out, generate revenue or for gaming.
Reitzik said that the plan for this commercial real estate ownership in the metaverse was to generate enough income that exceeds the monthly mortgage payment. He revealed that the customer is “planning to build some sort of game. There’s a concert space nearby and a golf game to the right that’s very popular.”
Before issuing the mortgage, TerraZero performed a check of the buyer’s credit score and finances, just like any traditional real estate financing company in the real world would. The company also requested a significant downpayment for the mortgage.
According to Curbed, Reitzik declined to disclose the exact amount of the downpayment or the interest rate as the company is in talks “several large financial institutions” and “didn’t want to publicize terms that may change in the future”.