Blockchain is one of today’s top buzzwords. We hear it tossed around all the time, but few people understand the powerful potential it has to impact real estate investing. Blockchain and tokenization make real estate investments faster and easier. The technology also provides unprecedented access to the global market.
Tokenization
Blockchain effects real estate investing mainly through tokenization. In tokenization, assets are converted into “tokens.” These tokens can be traded, moved, or stored on virtual blockchain network. These tokens represent the value of a physical, tangible object. The tokens are easier to move and manipulate than the objects themselves.
Tokenization and Real Estate
Now real estate owners can issue tokens that represent their properties. Each token represents a number of shares in the assets. Investors can purchase these tokens and become partial owners. Once they buy tokens, they will join in asset appreciation and cash flow. Investors can also easily sell their tokens as they wish. They can even use an online market to complete such a transaction.
How Will Tokenization Impact Investing?
Plenty of people are interested in real estate investments, but most find the buying and selling process too daunting to start. Few people possess the knowledge, time, and resources to approach real estate investing with confidence.
Tokenization revolutionizes the process and it makes it more accessible to everyone, regardless of their level of experience. Thanks to tokenization, real estate becomes a liquid asset. This makes real estate easier to buy and sell.
Funding was another variable that traditionally kept some individuals from investing in real estate. Tokenization, however, includes fractional ownership. Now even ordinary investors have access to investments that they might not have been able to afford previously.
International Markets
Tokenization also opens up access to international markets. Traditionally, most investors did not have access to the global market. Investing abroad required extensive paperwork, rigorous regulations, and in-depth knowledge. Tokenization makes the entire process easier. Real estate investors now have more access to capital, which increases the likelihood that they’ll be able to find funding for a project.
Blockchain and tokenization are transforming real estate investments. Today transactions are easier, faster, and cheaper than ever before. Investments are accessible even to those with limited resources and experience. The global market is open to everyone. The impact of blockchain and tokenization is far-reaching, and only time will tell how the technology will continue to change the industry.
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