Almost everybody is familiar with investing in assets that will bring profits in the future. Real estate is one of the most popular profit-yielding assets around the world. This investment is proved to be the best as it guarantees a high return on investment. Lack of inflation of currencies boosts investments in apartments, villas, houses, and similar real estate properties.
Meanwhile, we are being introduced to new innovative technologies every day to enhance the existing real estate sector.
If you’re already aware of real estate tokenization and want to give it a try, contact the best real estate tokenization services providing company.
First of all, what does real estate tokenization mean? And how does it revolutionize the real estate industry? Let us find out in this blog!
Recasting The Real Estate Industry
Tokenization is the process of developing a token for a digital or physical asset. For a real estate property, a piece of land will be tokenized. Once the tokenization process is over, we can sell, lease, rent, and buy the real estate asset.
There are other exciting features such as fractional ownership — Cool, isn’t it?
With the help of fractional tokens, the property owner can provide the asset ownership to multiple buyers. In simple terms, instead of selling a real estate property to one person, the owner can divide and sell it to numerous investors.
Advantages of Tokenization in Real Estate
With real estate tokenization, the seller can exhibit his property to worldwide investors which is not possible in the conventional method. Apart from this, there are some other advantages real estate tokenization could offer for both investors and property owners. Let us get to know about each of them in brief.
Blockchain technology helps in eliminating the intermediaries. Smart contracts aid in performing secure transactions and also facilitate peer-to-peer communication between the sellers and the buyers.
As third parties are not involved in any transaction, unwanted expenses will be reduced. Most of the crucial processes such as transaction and ownership transfers will be performed by smart contracts. So, we can save money spent on the human workforce.
Also, there is very less or no unnecessary paperwork involved in transferring ownership. Thus, both money and time can be saved simultaneously increasing the efficiency.
Blockchain technology assures a high level of security during transactions. Additionally, the personal information of the buyer and the seller will be kept away from hacking or data theft. Every transaction will be verified by the network nodes and thereby there will be no counterfeit or data duplication.
No boundary limitations
One of the most important reasons to quicken the adoption of real estate tokenization is to get rid of boundary limits. In typical real estate, the seller can only focus on selling the property to the buyers located within a certain perimeter.
To overcome this limitation, tokenization allows the property owner to display their land to a worldwide audience. At the same time, the transaction can also be performed across the border using cross-border payment gateways.
Low entry threshold
Unfortunately, small capital investments cannot be performed in typical real estate. But tokenization introduces an interesting feature of partial ownership of an asset to multiple owners.
For example, a single real estate asset can be split into two and sold to two owners. This encourages small capital investors to fund a real estate property irrespective of their economic status.
Real estate tokenization provides transparency. So, the buyer can easily trace the complete previous ownership details of a property. There is no risk of manipulation of data because the data stored in the blockchain cannot be altered or erased.
Real estate tokenization is a new concept that has high potential to transform the existing industry completely. There is no doubt that tokenization is going to lead the real estate industry in the future.
Other than the physical world, real estate is also getting popular in the virtual world. There are still more exciting things waiting to revolutionize and redefine the real estate sector all over the world.