Real Estate Tokenization:
The advancement of blockchain technology is a game changer in the real estate industry, and it has opened new ways for investment and trading. Real estate tokenization paves the way for investors and real estate asset owners to have frictionless transactions in the digital space.
The real estate industry is one of the promising industries for investors to invest in, and with the innovation of blockchain technology, the real estate industry has become even more promising for investors with real estate tokenization advancement.
There are many real estate giants out there who have started to reap the maximum benefits from blockchain technology by adopting the real estate tokenization method rather than using the traditional platform to carry out real estate-based transactions.
This blog will further explain the scope of real tokenization and how it makes your real estate project lucrative to investors in the global market.
How Is Real Estate Tokenization Shaping The Current Real Estate Market?
Real estate giants have begun their pioneer journey in the crypto market by tokenizing their real estate property and selling them for a better profit in a quick time.
A 350 million dollar building in Ukraine’s capital city Kyiv has created 50,000 tokens and listed them on an exchange platform to successfully raise 80% of the required funds to construct the building.
The token holders of the building are also enabled to generate revenue from the portion they own in the building.
Another classic example of real estate tokenization adoption is a building in Zurich that is worth 134 million U.S dollars and was completely sold using real estate tokens. This is one of the largest real estate property sales which took place with the help of blockchain technology.
Benefits To Reap From Real Estate Tokenization
There are numerous benefits to reap from real estate tokenization, and I have mentioned the core benefits which you can benefit from opting real estate tokenization method.
Futuristic Approach
Adopting the futuristic approach of selling or renting your real estate property enables you to be one of the pioneers in the real estate field, adopting blockchain technology. This futuristic approach saves you from the traditional platform’s setbacks.
Global Market Reach
Global market reach is another benefit that no real estate property owner can resist. The real estate tokenization will enable you to put your real estate property for sale to a global market. Putting your property on sale to a huge crowd like this can help you sell the property in quick time.
Skip Traditional Market
The traditional market has its own disadvantages when it comes to selling your real estate property. The traditional market involves intermediaries who could charge high commissions for successfully selling your property.
Real estate tokenization eliminates the chance for intermediaries to charge the property owners with high commission fees, and it also enables the property owners to appeal global market without any commission fees.
High Transaction Speed
The real estate tokenization process helps you skip the hectic paperwork in the traditional platform, which is mandatory for selling or buying real estate property. But blockchain technology enables you to determine all the conditions in the smart contract and process the sale quickly.
Liquidity
Real estate tokenization empowers you to sell or buy your real estate project quickly. The real estate tokenization process enables you to create liquidity by providing global potential investors exposure to your real estate property, fractional ownership options, and high-speed transactions.
Seamless Rent Collection
The rent collection process can be streamlined with the help of real estate tokenization. Rent can be collected when the pre-determined conditions in the smart contracts are met. Tokenizing your real estate property will enable you to automate your rent collection and rent receipt generation process.
Immutable Ownership
Blockchain technology is known for its security, transparency, and decentralized nature. Ownership records of particular real estate property will last a life long on the blockchain network. It is merely impossible to alter or manipulate the ownership history of a property stored in the blockchain network.
Fractional Ownership
Fractional ownership feature, which the real estate tokenization process supports. This feature enables the owner to divide the property share and represent it equally with tokens easily. This feature can be very useful for commercial property owners who try to sell properties that are set at a high value.
Fundraising Opportunities
Real estate tokenization not only enables you to sell or buy real estate properties efficiently, but it also enables you to begin a crypto business venture. The real estate asset can be used as security to support your crypto project during the Initial Coin Offering Process. This way helps your crypto venture gain trust among potential investors and raise funds quickly.
How Real Estate Tokenization Works
Tokenizing your real estate property can work wonders. The below-mentioned process is how your real estate property can be converted into tokens and successfully listed on the exchange platform to attract potential buyers.
Framing The Project Overview
This stage involves strategic planning on how to promote your real estate property’s features and how many tokens should be created to represent your real estate project. The strategic planning process should be carried out, keeping the jurisdiction the property falls in, asset type, and shareholder type.
Forming the Legal Framework
Framing a strong legal base is the most important factor in attracting potential investors,
and the property owner can adopt a Special Purpose Vehicle (SPV) that fulfills the obligations made by the property owner
under special circumstances like natural calamities or when the real estate asset-backed token company goes bankrupt in the ICO process.
Choosing The Right Blockchain
Determine the best suitable technology which serves as the medium between the buyer and the seller.
This process involves choosing the right blockchain network
on which the token will be created and, deciding token standards, defining smart contracts.
It also involves KYC and AML processes to verify the investors regularly from time to time.
Distribution Process
Distributing real estate tokens according to the distribution plan
to potential investors in the market is the goal of this process.
This process involves having a dedicated strategy to release the tokens on the website.
Make The Token Visible
Gaining visibility for the real estate-backed token in the market is essential for your real estate to become successful.
This is a post-launch process that helps your real estate token gain popularity in the market.
Dedicated real estate token marketing services
help your real estate project have the limelight of potential investors.
Summing It Up
The real estate tokenization process has widened your real estate market scope.
The real estate tokenization process opens up your real estate project’s possible to reach potential global investors.
Cuts the disadvantages of the traditional real estate market, like intermediaries and high commission fees.
Real estate tokenization also enables you to go paperless on a secure and reliable blockchain network.
Hiring a pioneering real estate tokenization company after detailed research of the real estate tokenization company to experience the above-mentioned real estate tokenization benefits without any lag.
Choose an effective marketing company that provides tokenization and marketing under one roof.
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