Real estate tokenization:
Real estate tokenization helps to bind real-world assets with virtual tokens. Investing in real estate is one of the best ways to invest. Integrating a tokenization system in real estate widens the scope of business profits for the owners.
Tokenizing your real estate assets helps your asset attract a global audience. It also enables investors to diversify their investments across different real estate assets. Real estate tokenization also paves the way to invest in fractional real estate assets.
Tokenizing real estate assets not only helps you sell or buy physical real estate assets it also helps to back your tokens as securities for your crypto business venture and raise funds from potential investors virtually.
Benefits of Real Estate Tokenization
Real estate tokenization paves the way to sell your real estate properties in a quick time effectively. There are numerous benefits of asset tokenization. The core benefits of tokenizing your real estate are, mentioned below.
Futuristic Model
Using real estate technology and leveraging the advantage of blockchain technology helps you use the latest blockchain technology advancement. Real estate technology can be a game changer for the real estate industry and shape the future real estate transaction model.
Being a pioneer user of blockchain technology can definitely enable your business to acquire the maximum benefits of futuristic technology.
Liquidity
Real estate tokenization is one of the easiest ways to create liquidity. The tokenization process eases the process of investing in real estate assets and enables the seller to reach buyers from the global market. A partial investment option with real estate tokenization enables owners of commercial real estate to split the fundraising process among an extensive number of investors.
Fundraising
Fundraising is a possible outcome of real estate tokenization. It enables your business to raise funds by issuing tokens that are, backed by real estate security. This increases the trust between investors and fundraises and motivates the investors to put in the essential funds required to get the crypto business running.
Enhances The Transaction Speed
Real estate tokenization not only helps to generate liquidity but also helps to avoid the hectic paperwork in the traditional real estate trading process. The transactions can be automated on smart contracts which occur only when the determined conditions are, met.
In addition, the rental collection process and rent receipts can be automated with the help of smart contracts.
Fractional Ownership
Fractional ownership is the key benefit of real estate tokenization. It helps owners with huge commercial real estate property to put numerous crypto tokens for sale representing various parts of the real estate property. This gives the buyer an opportunity to invest in small amounts, which ultimately results in owners raising funds quickly from numerous investors.
The fractional ownership creates an opportunity for investors to invest with small funds and not require huge amounts to invest in the whole property.
Immutable Records
Immutable ownership records are one of the key features of using blockchain technology in real estate tokenization. Once the transaction between two parties is successfully completed and confirmed, The transaction records get stored in blocks which makes it impossible for anyone to alter or reverse the transaction.
No Intermediaries
Real estate tokenization helps you skip one of the biggest disadvantages of the traditional real estate transaction. Intermediaries who get involved in your real estate transaction more often charge a hefty commission from the owner and the buyer.
Thanks to real estate tokenization for helping eliminate the need for intermediaries and helping reach an extensive network of potential buyers.
Security
Blockchain technology is well known for its unshakeable security and transparency features. Leveraging the benefits of blockchain technology and tokenizing your real estate assets can help you prevent the fraudulent activities which happen in the traditional real estate market.
As the transaction records are stored in blocks on the network, it eliminates the chances of tampering or altering the transactional data.
Transparency
Transparency is another great advantage of blockchain technology. Each and eerie transaction which occurs on the blockchain network will be visible to each and evry user, which makes it impossible for any discrepancies and ensures utmost security for transactions.
Future Scope OF Real Estate Tokenization
All the benefits above make real estate tokenization seem worth every penny. The investors and the sellers can both establish a win-win partnership with the help of blockchain and real estate tokenization.
There are a few early adoptions of real estate tokenizations that led to successful sales of their real estate properties. To name a few of the early adopters, a 350 million dollars worth tower in Kyiv, Ukraine, has effectively raised 80% of the funds required to construct the building by creating 50,000 real estate tokens representing the building. This also enables the investors to earn rents on the real estate share they own.
Another classic example of successful asset tokenization is a commercial building in Zurich worth 134 million that was successfully sold purely through real estate tokenization on the Ethereum network. Another example is a Chinese Bitcoin adopter who got his own mansion in San Francisco, which was tokenized.
These real-life examples prove to us that real estate tokenization has the potential to change the way people buy and sell their real estate properties. Being an early adopter of asset tokenization can greatly benefit your real estate venture enabling you to earn high crypto profits.
How Real Estate Tokenization Can Benefit Your business?
Choose The Asset
Getting started with real estate tokenization involves deciding the type of asset, how the asset is going to split to represent the tokens, and where the asset is present. It is essential to check whether the jurisdiction supports tokenizing real estate or not.
Use Of Special Purpose Vehicle
SPV (Special Purpose Vehicle) backs your real estate asset in terms of calamities or when the token issuing company goes bankrupt. The SPV helps to carry on the obligations made by the company.
Choosing The Network
The desired blockchain network needs to evaluate whether it is the right network to develop your real estate token. Once the token is built on the best available network, the real estate token is ready to be issued to investors using primary insurance or using exchange platforms.
Real Estate Token Distribution
Once all the above procedures are, completed, your real estate token will be ready for launch in the market. During token distribution, it is essential to create a distribution plan according to the total number of tokens created.
Tokens are also essential to accept multiple modes of payment to ease the customer’s buying option.
Wrap up
Choosing real estate tokenization has got its own benefits apart from using futuristic technology to sell your real estate asset. All the benefits of tokenizing real estate can be availed.
If your business acquires the best tokenization service from a pioneering real estate tokenization company.