The Future of Real Estate Ownership is Here, and It’s Incredible!
The way people buy and trade real estate has changed drastically over the last few years. With the emergence of the notion of digital ownership and trading, real estate owners, buyers, and investors now have a new and more efficient way to transact in the property market. It’s called real estate tokenization, and it’s the future of real estate ownership. In this article, you’ll learn all you should know about real estate tokenization, fractionalization, and digital ownership.
What is Real Estate Tokenization?
Real estate tokenization refers to the practice of turning a piece of real estate into a digital asset or token on the blockchain.
The common benefits of tokenization include ease of accessibility, increased security, effortless management, improved efficiency and transparency, asset divisibility, and fractional ownership. The last two benefits are particularly relevant to the real estate industry.
The real estate market has historically been suffering from problems like illiquidity, high cost of entry, affordability, accessibility, and high risk. Through tokenization on blockchain, these and many other problems of the industry can be solved, revolutionizing the way people buy and trade real estate.
Take the example of BitStake, which is a real estate tokenization and trading platform. It lets property developers and owners fractionalize their properties into NFTs and seamlessly sell them to a global audience for instant liquidity and quick profits. At the same time, it allows buyers and investors to purchase properties fractionally in the form of NFTs, which are much cheaper and can be seamlessly managed, stored, and traded online.
There are many benefits. You can diversify your money across multiple properties; can buy fractions of real estate; can put your property on rent and earn a steady monthly income; and can do away with the headache of managing physical properties with the convenience of digital ownership and trading.
Asset Tokenization: What should you know?
Non-fungible tokens are blockchain-based digital assets (tokens) that cannot be divided or replicated. Each NFT represents a specific asset, which can be real estate, music, photo or any other unique digital or physical entity. NFTs are used to represent and certify ownership of associated assets.
A large piece of real estate is divided into multiple smaller, equal fractions, each of which is represented by an NFT. These NFTs are stored and can be transacted on the blockchain. An individual looking to invest in a unique asset such as real estate can buy its associated NFTs representing fractional ownership.
Benefits of Digital Real Estate Ownership
Tokenization is indeed the future of real estate ownership and investment. It introduces liquidity in a market that has traditionally been considered illiquid. It makes real estate accessible to everyone, irrespective of their wallet size, by reducing the cost of entry. Furthermore, it improves transparency and security of real estate transactions.
Ease of accessibility : One of the best benefits of real estate tokenization is enhanced accessibility. Unlike the traditional real estate market, where only big players have access to major projects due to high entry costs, digital real estate is accessible to everyone with every budget. People can buy properties fractionally depending on how much they intend to invest.
Increased transparency and security : The inclusion of blockchain technology ensures all digital real estate transactions are recorded in a public ledger accessible to everyone on the internet. Each transaction is encrypted and added to an immutable database. This public ledger also stores ownership data for each asset token, thereby eliminating the possibility of fraud or malpractice.
Effortless management : Managing digital real estate is much easier than handling physical properties. You also enjoy convenient selling and trading as benefits of digital ownership.
Asset divisibility and fractional ownership : Tokenization allows real estate to be divided into smaller entities (NFTs), enabling investors to buy fractions of properties. This way, investors can also diversify their money across multiple properties, rather than putting all eggs into one basket, to reduce risks.
The Future of Real Estate Ownership is Already Here. Don’t get left behind.