How Investors are Cash-Flowing NFT Land for Huge Passive ReturnsReal estate has a new niche market that’s generating huge returns for passive-income investors — digital land. Savvy buyers are scooping up cash-flowing property in NFT projects such as Axie Infinity, Wolf Game, NFT Worlds, and Aavegotchi and achieving better returns than what’s possible with traditional real estate.The best part? Digital Land doesn’t come with any of the typical headaches of brick-and-mortar real estate; there are zero maintenance costs, no professional cleaners to schedule, or tenants to screen.Axie InfinityTake Daniel Maegaard, for example. Better known by his Twitter handle “Seedphrase,” he recently posted a screenshot of his daily revenue from investing in land from the Axie Infinity ecosystem, a play-to-earn game with financial backing from well-known investors Paradigm, Andreesen Horowitz, and Mark Cuban.His 91 plots of land bring in 149.24 AXS ($1,364) tokens every day, and a whopping $597,860 per year in passive income. Incredibly impressive considering he’s managed to accomplish this in an overall down market for cryptocurrency.The opportunity is still there for new investors as well. The least expensive Mystic Plot for sale today is $12,319 and pays out 1.64 AXS per day, good for a 44% annual return of $5,471, should the price of AXS maintain its current level.Not too shabby! Keep in mind, the AXS token has already gone through an entire market hype cycle. It topped out at $160 in the euphoria of November 2021 before hitting a low of $3.99 a year later in November 2022. Since then, it has settled at a price ranging between $9-$11. However, the figures do highlight a potential volatility surrounding the token.Wolf GameWolf Game is another NFT project generating enormous returns for investors since it launched in December 2022. There are 20,000 Genesis Plots of land in Wolf Game, and 2,577 of those lands have structures on them. Holders can upgrade these structures to either barns or bathhouses, then rent them out to other players for Wolf Game’s native token, WOOL.Bathhouses are in high demand, and the least expensive bathhouses in less popular locations currently rent for 15,000 WOOL for a rental period of 30 days. WOOL costs 1.5 cents today and bathhouses can be purchased for as low as 2.5 eth (right around $4,125).Here’s the math:15,000 x $0.015 = $225 every 30 days, good for $2,700 per year and a net ROI of 65% in the first year alone.NFT WorldsWe even have DAOs stepping in to act as the Web3 version of REITs, or Real Estate Investment Trusts. These groups pool money together to buy NFT properties in bulk and then split the cash flow as dividends to the DAO members. A DAO called WRLD TakeOver recently tweeted that they’re generating 18,000 $WRLD tokens per month for their DAO members, all thanks to a $9,352 purchase of 6 parcels of land in the NFT Worlds ecosystem.At 1.3 cents per WRLD token, that comes to $2,808 per year or a theoretical return of 30% on their investment. Pretty good!AavegotchiNot surprisingly, many NFT projects are also utilizing Layer 2 blockchains to help cut down on transaction costs and maximize ROI for holders. Aavegotchi is a leading project on the Polygon blockchain that allows holders to farm land in the “Gotchiverse” for four different tokens (FUD, FOMO, ALPHA, and KEK) collectively known as Alchemica. Alchemica can then be used to purchase in-game upgrades or sold on the open market through a decentralized exchange.One Aavegotchi whale, Dr Wagmi, recently tweeted that he’ll be making $3,000 over the next 8 weeks for farming Alchemica on his plots of land.Combined with other assets he purchased for approximately $80,000, Dr Wagmi stands to make a total of $16,000 during this 8-week period, and according to his calculations, should generate a return of 45% for the year.Going ForwardIt gets better– Axie Infinity, Wolf Game, NFT Worlds, and Aavegotchi are all designed to be played for years and the purchase of these income-producing assets is a one-time expense. Assuming these projects can stay afloat, there’s a chance these investments will pay insane dividends over multi-year timeframes, and if gaming does become the next meta in Web3, then there’s a strong possibility these returns could become even more lucrative if their tokens regain any of their price levels from the previous bull cycle.These types of opportunities for return on investment are unheard of in traditional real estate. An attractive property for a cash-flow investor would sell at around an 8-10% cap rate (the net income divided by the purchase price). So that if you were to buy a property in cash, owners would expect an 8-10% return on their investment after paying expenses such as taxes, insurance, maintenance, repairs, landscaping, vacancy loss, etc.There is a catch to the huge returns made possible by investing in NFT property projects, of course. Investing in real-world property is much more predictable than investing in anything related to NFTs. When you buy an apartment building in a good neighborhood, for example, there’s very little chance of seeing your property value decrease 90% in a year during a market downturn, nor do you need to worry about losing your private keys and control of your property.So, the question is:Is the upside of outsized returns of digital real estate worth the risk of investing in this new frontier? Many NFT investors are betting big that it will be, and even during a bear market, are enjoying fantastic returns on their investments without ever having to deal with a single clogged toilet. However, on the flipside, many also believe it is highly perilous venture, where the risks greatly outweigh the rewards. In essence, there is always the possibility that both the token prize and the Land value can plummet, leaving investments with little more than an NFT reminder of their escapade.Want more? 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