Texas Man Puts His Savings Into Buying Virtual Real Estate

AUSTIN (KXAN) — Buying real estate is a big investment, but some people invest in virtual properties.

“I put in $18,000,” Justin Reed said.

That’s what he paid for the Khorum Coast, a piece of virtual land in the Entropia Universean online virtual reality game.

“I know it sounds like a lot, and it’s crazy to tell someone that, you know, I’m a virtual landowner, and I’ve put my savings into it. But I believe in Entropia,” said Reed, whose avatar name is David Joker.

That’s because Reed has been playing the game for nearly 20 years. Along the way, he cashed out $5,000 from the game to pay for his studies.

Now he hopes to recoup this investment in virtual land within four years.

“I get income based on everything a player learns there. If they start mining, I get 3% tax revenue on that. And that’s how I get my income,” he explains.

He said he pays $60 a year to keep animals on his land, but no land tax.

“It’s not like I bought a business or a property and all of a sudden the taxes and the value of the property go up, and I can’t afford it,” Reed said. “I will always own Khorum Coast, and all it will ever cost me is $60 a month for my creatures.”

Entropia calls itself the world’s longest-running metaverse. It was launched in 2003.

“If you like the risk and are willing to gamble, which is basically what’s happening in this digital world, you know it’s a good place to gamble,” said Paul Toprac, associate director of Game Development and Design Program at the University of Texas at Austin.

Toprac said these kinds of worlds get bigger as more companies buy in.

That could mean more non-gamers playing on all platforms, like Entropia. Or it could mean more people are drawn to the recognizable names, like Meta, formerly Facebook.

“Well, Meta is coming up with their thing, and Apple is coming up with their thing and Microsoft. And now the same users are all going to migrate to these other platforms, in which case you’re going to have very few people who can play in this space,” Toprac explained.

He said that eventually we’ll probably see virtual reality and reality mesh even more.

“If you have something that’s a realistic avatar of yourself, you might want to try on a pair of glasses and say, ‘Oh, yeah, I love… those sunglasses,'” Toprac said. “I order it here online, but online in this virtual world, and then it’s delivered to me.”

He advises starting small when investing in the metaverse.

Reed has made about $1,200 since he invested in late March.

“How often do you start a business and make money almost immediately in your first month?” he said.

He admits it was nerve-wracking at first.

“I had to make a transfer with so much money. It was stressful seeing that go away,” he said.

But he still thinks he made the right choice.

“I would say anything can be a bad investment. I could have started a bakery with my money, and no one could have bought my bakery rolls,” he said. “It just makes me feel like I have more control.”

Reed eventually hopes that money from the metaverse will allow him to retire from his retail job.

“I mean, as long as this game doesn’t eventually go under and get kaput, I’ll always, always have my country and I’ll never be unemployed for the rest of my life,” he said.

And he hopes others will join in too.

“I don’t want to keep myself quiet. I might want someone to see this interview here and say, ‘Man, I could do that too. This game could also be something interesting for me.’” he said.

Toprac reminds people that they still have to claim income from the virtual world with the IRS. That means once you cash in your virtual money for real money, you will be taxed.

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