Real Estate – The Evergreen Asset
Real estate is considered one of the most evergreen avenues of investment and is a reliable class of asset. The global real estate investments are estimated to hit around $79 billion in 2021, and the market is all set to be worth over $4.26 trillion by 2025. Even now, the value of global real estate is estimated to be at a staggering $228 trillion.
Bringing In The Blockchain For Crowdfunding Tokenized
While real estate itself has been a great asset class, it has also been positively impacted by the new-age trend of tokenization. The real estate tokenized market cap stands at a staggering $25 million with a trading volume of about $179,000 reported for December 2020 alone.
Real estate investment tokens or REIT has always been there but it had its own share of shortcomings. Blockchain-based real estate tokens are all set to solve this issue.
Why Go For Tokenization?
There are multiple advantages that real estate tokens bring to both real estate asset owners and investors.
The smart contracts and the self-regulated logic ensure that asset management is simple and straightforward. Buying and selling of tokenized real estate would mean that there are no intermediaries and associated costs involved in the entire process. The cumbersome paperwork will be eliminated and transfer of property ownership will become simple. The action would be made swift and efficient, making real estate trading a breeze.
Immutability is one of the most important and central attributes of the blockchain network. With data stored on the blockchain, there will be no discrepancy in the proof of ownership. When proof of ownership is irrefutable, it speeds up the process of buying and selling. The ownership is protected by the private key and it also makes it easy to access the entire history of ownership. It becomes almost impossible to falsify ownership information and trick real estate investors.
In line with immutability, you can also expect enhanced security and transparency. Both of them are innate properties of blockchain technology. Cryptographic encryption ensures that the tokens are protected. The private keys ensure that only the owners can access the data.
The real estate market has dubiously been known for lacking transparency and accountability for several centuries. When blockchain is introduced into the equation, the pricing, the past dealings, and the information on property ownership would be made more available for prospective investors. There is no possibility of unintentional and uninformed underpaying or overpaying for buying or selling real estate.
Since the extremely unaffordable real estate asset is broken down into smaller tokens, it lowers the entry barriers for investors. A direct consequence of this is enhanced liquidity. This also opens up lucrative avenues of investments for retail investors. All this can happen without diluting the value of the asset!
The Successful Projects
Tokenized real estate is not just a figment of the scientific imagination. It has become a reality today and its high reliability has been demonstrated by a good number of tokenized real estate projects.
The Aspen Coin – Harbinger of Real Estate Tokenization
The Aspen Coin is probably the first of its kind real estate tokenization project that facilitated partial ownership of a ski resort in St.Regis. It was considered quite a risky offering because of the possible shortage of liquidity and legal restrictions on transfers and resales of property tokens. However, defeating all these uncertainties, the coin was a massive success. The value of the coin was about $1.3 after a few months of trading and the coin sale managed to raise around $18 million worth of crypto assets. It is considered one of the most successful security token offerings.
Venn HomeSuite – Malaysian Tourism’s Blockchain Baby
Venn HomeSuite is a security token offering planned for an integrated property focusing on tourism in the city of Penang in Malaysia. It is a combined development project that includes residential properties and a managed luxury hotel. This is a wonderful example of how real estate tokenization has reached even the most unimaginable areas like Southeast Asia. This project is a consequence of the real estate boom of the past decade in Malaysia.
It also stays in line with the growing demand for urban properties in Malaysia. Combining the tourism industry, it is considered one of the best real estate tokenization projects to have been ever envisaged.
Elevated Returns – Solidifying Tezos Blockchain’s Stand
The question of which blockchain is best suited for real estate tokenization has been the million-dollar or rather the billion-dollar question that has always been in the minds of the proponents of tokenization. The answer lies in the Tezos blockchain network. Elevated Returns, a leading real estate tokenization company announced that it has quite some real estate in the pipeline for upcoming tokens and it endeavors to tokenize up to $1 billion worth of real estate.
They have stated that they do not intend to compromise on the technical capabilities of real estate tokens and that is one reason why they chose Tezos over all other competing blockchains. It is quite likely that Tezos will become the gold standard for real estate blockchain networks that will spring up in the future.
The Temporary Stumbling Blocks
Real estate tokenization will face a few challenges in the near future. People have shown an aversion towards this new age transformation of investments. As of now, tokenized or securitized real estate is limited to just the transfer of assets.
As you may have known, real estate is more than just a transfer of ownership. It will not be long before blockchain-based real estate tokenization evolves to accommodate all the aspects that today’s real estate ecosystem provides.
Tokenized real estate is all set to be the order of the future. If you are one of those aspiring entrepreneurs who would like to make a business by tokenizing real estate or by launching a security token offering for real estate, all you need to do is get in touch with an experienced blockchain development company that specializes in the tokenization of real estate assets.
They will completely take care to understand your tokenization requirements and STO (Security Token Offering) for real estate and build you a cutting-edge platform that will launch you into the lucrative space of securitized real estate.