Real estate is a highly diverse industry with massive human involvement. It is a commodity that is needed for living, doing business, entertaining ourselves, and also for recreation purposes in the form of shelters, buildings, theatres etc. In terms of investment, property in the form of land is always considered as one of the long term option which is associate with high profits. As the industry is expanding, challenges are being faced by the stakeholders of the industry. Problems never come alone, they are always accompanied by solutions. So, the Blockchain technology is intruding in the real estate sector to remove the hindrances and open the flood gates for potential fresh investments. In this article, let us discuss about one of the solutions of tokenization offered by blockchain technology to help in reviving the infrastructure sectors. And alseo suggest some tips to manage your Blockchain property.
What Is Tokenisation Or Blockchain Property?
Blockchain technology aims to change the experience for the real estate community from inside out. Tokenization or digital securitization of the assets of real estate is one of the concepts introduced by Blockchain technology in the real estate sector. Through the approach of tokenization, digital assets can be backed by real-world assets like real estate, real estate funds, revenue streams, governance rights, and more. These assets after getting converted to non-sensitive equivalent called tokens, could be made accessible to a pool of potential investors and being leveraged to raise capital. Once the project gets completed and launched or the tokens got listed on any blockchain technology, they can be traded or exchanged to earn profits.
Blockchain real estate startups tokenize assets to ensure sellers that they actually own property and buyers have the funds to capitalize on the project, sometimes this property is referred to as Blockchain property. In a way, tokenization does not only increase the liquidity of traditionally illiquid assets but also make those assets tradable. It is like owning the property by owning the tokens only.
Benefits of Tokenization In Real Estate
In present times, the real estate sector is staggering due to lack or limited capital available to the sector. But the tokenization with its several benefits aims to push the sector and to captivate the attention of investors.
- Fractional Ownership: Instead of buying whole property on your own, the property can be own by different investors depending on their financial capabilities. Tokenization made the fractional ownership possible where multiple can buy tokens and co-own the property. This increases the inflow of capital and allow the sector to complete their projects.
- Liquidity Improvement: Earlier one has to wait for ages to sell their property and earn the profits associated with it. But now, if the project had released the tokens, then you just need to login to the crypto exchange where the token is listed and just sell or encash it.
- Risk Reduction: Many of the investors remains skeptical for locking up the huge amount of money in a single property,. But tokenization offers them an option to lock up even small amounts of funds for long as they can, thereby reducing the risks related to investment.
- Reduce Intermediaries: To invest in any property, you always need the help of brokers or property dealers or someone who can help you in decision making, which comes with huge commissions. But when certain real estate venture release token, you just need to analyze their website and you can directly purchase without any intermediary.
- Hassle-Free Cash Flow: You need not worry about the cash or cheque, Paypal or debit/credit cards to complete your transaction, most of the times most of the mode of payments are available for investors.
After reading the benefits associated with tokens of the real estate sector or Blockchain property, if you are thinking to buy some tokens or wish to diversify your portfolio, then you must read the next section briefing the tips to manage your Blockchain property.
Tips To Manage Your Blockchain Property
You need to manage or handle your blockchain property or tokens backed by real assets with the utmost diligence. You can assure the efficient management by keeping certain things in mind:
- Wallets: After purchasing the tokens of a particular real estate project, do not forget to transfer them in your digital wallet, either hot or cold, desktop, or mobile. Keep private keys of wallet and recovery phrases of private keys safely with you.
- Calendars: Various sites provide the details related to launch date, expiry, or extension date of tokens which sometimes affect the market sentiments. Keep yourself updated with events of real estate and token related information to manage your Blockchain property.
- Social Media Websites: Social media platforms have been turned into a platform delivering both real and fake news. So, you must constantly keep an eye on authenticated platforms like Twitter or Reddit for the announcements or issues related to your Blockchain property. In this way, you can strategize for long term investment.
- Accounting Tools: The value of property fluctuates with various social, economic, and political factors, thereby affecting the worth of tokens. So, to stand in for the long term and gain the wishful profits, you must deploy some accounting tools which can help you in systematically organizing the assets on a single interface with needful information.
You can easily manage blockchain property in 2020 by deploying the few tools and educating yourself about the real estate industry and the revolution started by Blockchain technology.
Many startups in the real estate industry had already started giving opportunity to investors to build up their blockchain property. RealBlocks, issue tokens to create new avenues and let investors enjoy fractional ownership; Harbor, act as compliance platform to tokenize real estate funds and increase transparency; Slice, allow the small investors to own the part of the property and many more like Meridio, Reasi, etc, are deploying the blockchain solutions to expand the real estate industry. Blockchain implementation in real estate is the need of the present and future as it involves highly intense transactions, a number of stakeholders, contract formation, and unlimited capital to grow. Blockchain technology has the potential to reduce operational costs, downsizing the intermediaries, and encourage the flow of investments. So, don’t hesitate to buy some tokens and contributing to the real estate sector.