“Spain’s first Tokenized Real Estate sold for ETH to Investors. Criptan, a platform of Valencia origin for the sale of cryptocurrency, and real estate investment company Rental IT, took part in the purchase of real estate, paid for exclusively with cryptocurrencies. Earlier this year, the Barcelona apartment became the first in the country to be put up for sale, and the owner indicated that he wants to receive payment in Bitcoin (BTC) for the property. Experts in the country said last week that interest in cryptocurrency-related real estate transactions is on the rise.”
Real Estate Tokenization is an emerging platform in the blockchain world, representing the combination of real estate investment and blockchain technology. Tokenization in digital-world has helped asset-owners raise capital more effectively and gives them unrivalled access to real estate investments privately, transparently and promotes liquidity.
What Does Tokenizing Real Estate Mean?
Tokenization is a new term described as fundraising cryptocurrency for investors to exchange the tokens. It is simplified as tokenization is the only solution to securitize real-assets. The asset is securitized for dividing the shares to sell it to investors. Similarly, a real-world asset is tokenized for dividing tokens representing a predefined share of the underlying asset and called security-tokens. Many countries plan to make legislative changes to create a friendly ecosystem by tokenizing real estate assets along with regulatory bodies.
Why Is it Essential to Digitize Real Estate Assets for the Future?
- It improves the conventional process as digitized real estate assets renders more liquidity opportunities, maintains transparency, tracks ownership and allows real-time investment.
- The proper coordination from blockchain experts, lawyers and real estate professionals is needed to provide a successful token without any risk.
- Even if a commercial real estate asset is tokenized for higher liquidity rates, token holders need to be updated on the real-assets and be ready to overcome the risks that affect their asset value.
- DeFi real-estate tokenization has more possibilities to compete with other real estate fundraisers like private equity and venture capital in the marketplace.
- It is expected to bloom in the next five years; DeFi development in tokenization yields a profit of about $4.2 billion for the global real estate industry.
Cons to be Considered for Real Estate Tokenization:
- Property Developers are smart enough to gain more capital as they fractionalize an asset efficiently. It facilitates many investors leading to significant capital inflow in a project for reducing the barriers.
- Asset Prices are close enough to actual market value since the illiquidity discounts rapidly decrease. It benefits in trading more assets at low fees by investors in the secondary market.
- Real-time pricing Information is available in order books. The data to be shared asymmetrically using cumbersome paper-based systems to discover better trading deals by investors on a timely basis.
- Investors can experience high-level transparency since the blockchain-based system is updated regularly and makes them aware of their rights and restrictions related to the real estate-backed DeFi to know the underlying property’s value.
- The chances of risk and fraud are decreased while a transaction occurs in a blockchain network that allows none to make changes. It helps to gain trust and confidence in the minds of property investors.
- Instant checks and balances are done to maintain firmness so that the value of the security token does not drop below the net asset value (NAV) of the real estate asset.
- Real-estate tokens financially gain support from real-world assets and are less risky when compared to volatile cryptocurrencies.
- Wealthy Investors can diversify their investment towards the real-estate DeFi platform by investing in multiple properties across the globe and making high returns as benefits.
Summing Up :
The market conditions of tokenizing real estate are gradually changing, and access is no longer limited to elite investors. It is high time that investors can raise capital flexibly with more freedom and move their funds efficiently. The real-estate asset in the DeFi platform is powered by blockchain technology that provides a high-performance rate with secure transactions. Real estate is a trending sector for investors to gain passive income for future growth. Investors can get in touch with any blockchain company specialized in tokenizing real estate to provide hassle-free solutions for better assistance and generate more business revenue in less time.
