Tokenizing Real-Estate: What Are the Benefits?
The real estate market is very complex. The reason for this is that there are always multiple stakeholders involved, large amounts of money on the line, different people that specialize in different areas, and regulations that are dependant on jurisdiction. All these factors contribute to the complexity of the sector.
However, the complexities alone wouldn’t be such a huge issue, but the fact is that they create many different dysfunctions while the market keeps on growing. This is why a large number of companies, startups, individuals, and even government institutions are turning to new solutions, one of them being blockchain tokenization.
What is tokenized real-estate?
Real estate tokenization allows property owners to issue tokens through blockchain platforms. These tokens represent a certain amount of shares for some real estate asset.
Other investors can purchase these tokens, and by doing that, they become partial owners of that asset, which further allows them to be involved in cash flows and asset appreciation.
At the same time, they have the freedom to sell any amount of their shares whenever they want and they can do this even through some other online markets. Even though the whole concept seems pretty simple and straightforward, it raises a lot of interesting questions concerning the future of the real estate market, as well as blockchain technology.
What are the benefits of tokenizing real-estate?
There are a lot of people talking about many different kinds of benefits that tokenization can offer. However, a lot of those are still theoretical and they haven’t been proven through practice. Still, this doesn’t tell us whether they are definitely viable or not, we will have to wait and see.
So, let’s stick to what we know and talk about three general benefits that are evident:
1 Blockchain immutability proves ownership
We already know that blockchains have immutability and this feature transfers really well to tokenization. Having a digital history of transactions helps every stakeholder and investor prove their ownership. At the same time, this kind of structure also helps reduce the chance of fraud.
If a token owner tries to sell a certain token multiple times — trying to transfer a single token to multiple investors, this kind of structure will show the exact history of ownership and makes it impossible for someone to falsify transactions and trick investors.
2 Programmability allows automation, improves transactions, and share management
The ability of smart contracts to contain different business logic refers to programmability and it helps establish automated events when certain conditions have been met. This means better pre-established rules. Tokenization also makes investor management easier.
By relying on third-party exchanges, it is possible to track secondary transactions without any complications. Investors can also effectively use any other processes such as voting. This programmability can be very helpful at speeding up settlements, as tokens can contain built-in compliance.
3 Improved liquidity
On its own, tokenization increases opportunities for fractional ownership. A fiat like the US dollar can only go as low as $0.01, but tokens can have up to 18 decimals, meaning that they can go much lower unless some barriers are implemented.
This means that the investor entry is much lower and that there is more room for fractional ownership. For example, instead of having to invest $100,000 for a certain real estate, investors will be able to pay $5,000 for their tokenized fractional ownership.
However, tokenization is not a simple process and requires ample counsel and guidance from professionals with both legal, tax, auditing and technology experience.
C Estates is a Real Estate company that aims to offer a One-Stop-Shop solutions for all the Real Estate transactions by offering a Real Estate Technology powered by NEM Blockchain through Real Estate Tokenization process namely; the Platform and the Marketplace. With tokenization, C Estates will enable the users to:
- Buy the property in fractions or as a whole
- Earn income when the property gets rented out
- Sell the property in fractions or as a whole for a better price
C Estates is a real estate company backed by its 10-yrs experience in the business. It aims to create a global industry standard platform that uses the most robust technology that will revolutionize the way buyers, sellers and investors of real estate properties transact online. Anyone can use the C Estates platform for a more efficient, secure and faster cross-border online transactions.
C Estates connects people around the world to seamlessly transact and conveniently buy and sell real estate properties. Whether to verify a document, confirm notarization, validate asset’s ownership, buy or sell a property or finding someone to manage properties, C Estates has got everything you need to do your business in one place.
Bitcointalk profile: digimon6677