How Tokenization and Blockchain is Set to Change the Real Estate Face
Have you been eyeing a piece of pie in the real estate industry? Do you believe that technology can change the sector for good? Well, you need to get ready for a revolutionary technology that will transform the sector. Tokenization and blockchain transforming the investor experience in real estate.
Investing in real estate has always been seen as a complex undertaking. The complexity of the sector has kept a lot of potential investors away. It has always been perceived as inefficient, fraudulent and bureaucratic with the investor being exposed to unprofessional middlemen.
Tokenization and Blockchain
First things first; tokenization and blockchain go hand in hand. Unless you understand there two terms, investing in a tokenized ecosystem might not work for you. Real estate asset tokenization simply means attaching economic value to an asset. This allows you to invest in a property in bits; the token, which represents a fraction of the asset value.
A single token can represent a value of $1000 and translates a certain percentage of the asset value. A tokenized economy acts as the entry point for investors interested in real estate. You have access to your tokens and you can take a fraction of it and invest in a different property.
Tokens are managed and stored on a blockchain platform. This is a “Ledger” of transactions and cannot be corrupted or manipulated. The network is programmed such that all records are available to the public for additional transparency. These records are time stamped and digitally tied to the owner and cannot be accessed without the owner’s consent.
Simply put tokenization in real estate breeds democracy in investing. The security of the token transactions is ensured by the blockchain. Both the investor and property owner are protected. This prevents double spending on the part of the token and double ownership on the part of the asset or property.
Impacts of Tokenization and Blockchain on Real Estate
Tokenization and blockchain are not restricted to the real estate alone; they are disrupting many other industries as well. However, real estate investing will benefit greatly and its future is already being reshaped by the new technology. Here are some inevitable impacts:
Low Entry Point to Real Estate Investment
Traditionally, investing in real estate has been a preserve for investors with large amounts of money. This is changing thanks for tokenization and blockchain. Anyone can now invest in the lucrative sector and you can invest anywhere across the globe.
The technology is changing the complex real estate sector into a simple B2P marketplace. The token swapping environment is secure and the number of third parties reduced to a few clicks online.
Seamless Transactions in Real Estate
If you have ever bought or sold property, you know how complex the transactions are. They are slow, expensive and time consuming. Tokenization and blockchain is changing all that for the better. Real estate funding has also become seamless across the globe.
Transactions are fuss free, at almost zero cost and fast. This is a major boost in the sector and will see more investors’ onboarding. This has been one of the largest bottlenecks in real estate.
Elimination of Fraud in Real Estate
Tokenization and blockchain brings transparency in the market. The technology is immutable and participants can see transactions on the network. However, these cannot be altered by users not penetrated by hackers.
It is quite clear that real estate is headed the right direction and the future looks bright. A shift from the traditional system to tokenization and blockchain will see property owner and buyers benefit from the new technology.