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Emerging Opportunities in Real Estate Tokenization


The real estate market has always enjoyed the reputation of being one of the safest and most stable investments, making it one of the most popular. However, there were barriers to entry that prevented a whole market of people with too little individual capital from accessing the privilege of owning land. The offers built on blockchain, notably the possibility to tokenize and then sell and exchange abstractions of value such as digital works of art, or fractions of investment, give the power today to small investors to access the real estate market while leaving them the control of their assets and the flexibility to resell or exchange them.


 

These solutions, developed under the name of security tokens, offer the possibility of owning a fraction of a property, but can also serve as a debt asset that automates the collection and exchange of rental receipts. Not only are these tokens used in their primary function of property rights, but they can also be used as a means of payment or many other applications.


As an example, let's take a real estate owner wishing to tokenize his property that is currently leased to an entity. After going through a procedure to make sure everything is in accordance with the regulations, the owner can make an STO (Security token offering), where the value of a token will be arbitrarily defined, like for example 1 token equals 1 square meter. The first buyers will acquire tokens during the STO, and will receive shares of the rental profits until they decide to sell them.


However, investing in this way is not only for the smallest of investors. The numerous advantages offered by this new system extend to all wallets.


The main advantage is the transferability of the asset which is frictionless and very fast. Digitizing assets existed before the arrival of blockchain technologies, but they now offer a clear advantage of flexibility to instantly shift ownership of an asset from one person to another.


This gain in versatility also impacts the diversification of investments. Investing in this way is less risky than buying a whole property or buying knowing that there will certainly be a delay and a procedure before being able to potentially resell. As a result, individuals can afford to invest in properties on the other side of the world where previously they would have had to research the regulations, and which would have represented a consequent risk.


In conclusion, the emerging real estate tokenization market offers many great opportunities, and it seems clear that it will have a bright future.



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