The real estate market is one of the world’s oldest and most established businesses. Along with being one of the most stable markets, real estate has also proven to be a lucrative investment opportunity. Real estate investors can expect a steady return on their capital invested and some tax benefits. Blockchain technology is disrupting real estate investing by providing opportunities for new market entrants with access to cheaper capital through tokenization and accessible marketplaces that remove friction from investing in real estate through digital currencies.
What is blockchain?
The blockchain is a decentralized and distributed ledger that stores data in encrypted blocks of information linked together and secured by cryptography. This ledger is accessible by anyone with the right credentials and can be used to store information securely. Blockchain technology has many applications and is most famous for being the technology behind cryptocurrencies such as Bitcoin and Ethereum. The real estate industry is one of the most suitable industries to use blockchain technology because of its need to manage an asset with a high value and many stakeholders. Blockchain technology offers transparent and trustworthy recordkeeping for real estate transactions that are often complex.
Real Estate Investment Through Tokenization
Tokenization is turning an asset into a digital token, or a representation of that asset, that can be traded and executed on a blockchain. A tokenized real estate investment allows a real-world asset to be divided into shares that can be traded and sold like a stock. There are many benefits of tokenizing real estate assets, such as increased liquidity and lower barriers to entry for investors. Additionally, tokenized real estate allows for fractional ownership of assets, which allows anyone to share in the upside of the real estate market and diversify their investment portfolio.
Tokenizing real estate assets allows owners to raise capital by issuing tokens for equity in the underlying assets. When a real estate company decides to tokenize their assets, they will conduct an initial coin offering (ICO) to distribute the tokens to investors. The company will decide on a desired token price and the ICO’s duration. Investors will decide if they want to purchase the tokens and pay with either fiat currency or cryptocurrencies.
Digital Asset Marketplaces
Real estate investment marketplaces are online platforms that allow investors to purchase shares in real estate projects using cryptocurrencies. These online marketplaces allow easier access to a wider variety of real estate assets and provide investors with an easier way to participate in the real estate market. These marketplaces are still in their infancy and are expected to grow significantly over the next few years.
One of the most well-funded marketplace projects related to real estate is Realty Token. Realty Token is a blockchain-based real estate investment ecosystem that allows individuals to invest in real estate projects and earn a passive income from those investments. Investors can use the Realty Token platform to invest in various real estate projects worldwide and earn returns on their investments.
Blockchain-Based Property Management
Another way blockchain technology will impact real estate is through the adoption of blockchain-based property management solutions. These types of solutions allow landlords to manage their properties remotely, track maintenance issues, and access real-time analytics on the performance of their properties. Blockchain-based property management solutions are expected to increase in adoption in the future. These solutions leverage blockchain technology to provide secure and transparent recordkeeping that different stakeholders can access. Property management companies that adopt blockchain technology will be able to provide better service to their tenants and allow for faster payment processing by customers.
Blockchain Isn’t Going Anywhere
Blockchain technology has the potential to disrupt the real estate industry by providing access to cheaper capital through tokenization and increased liquidity through digital marketplaces. Real estate investors will also benefit from blockchain technology by having more accessible access to investing in real estate, lower barriers to entry, and the ability to diversify their investment portfolios through fractional ownership.
To learn more about ProperT and how you can acquire tokens for your next real estate purchase, visit www.getpropert.com and receive a 5% token-back reward on all purchases.
