Anyone who has bought or sold a real estate property knows how expensive and time consuming this real estate transaction can be.
While the real estate market is the largest asset market in the world, it also has some characteristics that need to be improved due to the high cost, delay, or complexity of transactions.
Blockchain technology can change the way transactions are executed and completed in various sectors, and provides a secure, reliable and robust system. One of its most recent advances is the real estate sector, which is experiencing rapid digitization and innovation thanks to blockchain technology.
The global housing market is valued at $ 232 trillion, but it is typically the market for low-liquid assets. Asset tokenization can revolutionize this market through the transparency and immutability of the data recorded on the blockchain and can solve the liquidity problem that is one of the biggest problems in this market. Real estate tokenization will increase the liquidity of assets, which will be easier to trade with various real estate token brokers around the world. This process requires the use of DLT (Distributed Ledger Technology) technology, choosing a blockchain platform that works with smart contracts.
Currently, real estate investment funds (IFIs) are listed on exchanges and provide liquidity to the fund, but they tend to be expensive to establish and are limited to a few qualified investors. Some FIIs have a minimum entry fee for investors of R $ 5,000 or more. However, tokenization can give small investors the opportunity to invest at least R $ 10 through tokens of good properties around the world.
To tokenize properties, homes or commercial real estate, it is necessary to select a duly regulated blockchain platform with the right to store the property in its tokens through the competent authorities.
After that, it is important to make sure that the platform also provides the owner with the function of transferring these rights to someone and transferring full ownership to another person in an authorized manner.
How do investors benefit from real estate tokenization?
1. The main advantage of tokenizing properties or assets is that it eliminates intermediaries. This simplifies and reduces the cost of the process of buying or selling your real estate by investors. Here you can see the best results for real estate tokenization at https://digishares.io/real-estate-tokenization
2. Investors can exchange tokens immediately at a very low rate.
3. Tokenization allows real estate owners or developers to receive capital without financial intermediaries to subscribe to a project.
4. Real estate tokens are backed by real assets, so they carry less risk than cryptocurrencies or ICOs.
Stabilization measures can be included in the smart contract to ensure that the value of the token does not deviate too much from the base NAV of the property.
Successful real estate tokenization projects
Real estate tokenization is no longer a fad. We already have several cases of successful real estate token sales. One is a luxury Manhattan apartment located on East 13th Street in the East Village that has successfully sold $ 30 million in blockchain-registered tokens. In another example, a $ 65.5 million building occupied by We Work in downtown Miami, Florida, is open for sale using blockchain tokens. Even some resorts have been fundraising with real estate tokens and have successfully raised the required capital in less than an hour.
To be sure, the real estate sector has historically generated attractive returns, but it has entry barriers for more investors. Tokenization can be a great solution as real estate assets can get the best of both worlds: good returns on real estate investments and liquidity in the stock market.
There is no denying that blockchain is revolutionizing almost every area of our lives, and the housing market is no exception to this transformation. With the world getting smaller and more and more globalized real estate market, it is impossible to avoid tokenization of blockchain-based real estate.
If you want to take advantage of this small wave that is about to become a tsunami, all you have to do is make an appointment with us to help you in your digitization process. We look forward to helping you grow your business by finding an asset tokenization model that suits your needs.