Real estate is a popular market that is around more than half of global wealth, and despite its endless benefits, investing in real estate is capital-intensive. The good news is that tokenization can diminish the entry barriers and make it possible for anyone to enter the real estate market virtually with much less money.
The advancements in the tokenized real estate platform have added a spark to its interest in its potential applications in real estate. While not many people are aware of the technology, its legitimate uses and application will become visible to everyone with time.Â
Blockchain technology is the best for transparency, security, and speed, and when you relate that with real estate, you invest in a secure, convenient, and frictionless space.
Let’s dig in to take a look at some benefits of investing in the tokenized real estate market.
Why consider investing in a tokenized real estate platform?
If you are new to blockchain, you need to know that it is a digital ledger that records and distributes copies of transactions all-around the computer network. Blockchain technology makes the entire transaction safer and extremely difficult to hack.
Implementing blockchain technology in real estate is among the most exciting of its applications. The truth is, the opportunities are huge when you invest your money in it, and here are some reasons that highlight the importance of tokenized real estate investing.
Transparent and secure transactions
Through blockchain technology, you can buy digital tokens that highlight an asset’s ownership because the entire transaction is privately highlighted on the blockchain. It is convenient to highlight the ownership of an asset and trade it with the different market participants. Doing so can add an unprecedented amount of security, transparency, and ease when it comes to making transactions.
Buying Fractions of a property
Buying an entire property on the traditional market is not always pocket-friendly, but real estate can be capital intensive, despite its wider range of offerings. It is where blockchain brings a different solution – you can buy a piece of real estate and grow your holdings to a wider extent. You don’t even have to worry about the maintenance costs or the leasing issues, allowing you to purchase properties using digital tokens representing asset ownership. If you decide to sell it, you can locate a buyer on the digital market and earn profits without any challenging process typically involved in the traditional real estate market.
Diversification of Properties
Traditionally, it was more likely that your capital was placed usually in one property, and growing a diversified portfolio was extremely expensive. A property with costly issues that are not profitable enough can drag you down, which even impacts your investment journey.
An impactful benefit of purchasing fractions of different properties or investing in a professionally kept portfolio of properties is that those can diversify your stake among different properties. It efficiently reduces your risk exposure.
Reduction of fees
Fees are endless in real estate, including legal fees, agent commission, registration fees, taxes, maintenance fees, and more. These can even add up very quickly, creating a significant entry barrier for an average investor.
When you are able to purchase small sections of real estate in the form of tokens can reduce fees and make real estate much more accessible to the average investor. It is not that the fees will be eliminated entirely, but they will be divided among the investors depending on the holding size.
