The real estate industry is ready for tokenization
Buyers and sellers in the Real Estate industry will soon find the rules changing. With Tokenization, you can now represent these things and other items through blockchain, potentially changing the industry.
Blockchain has the potential to help shape a world of fractional transactions, alleviate liquidity problems in the commercial real estate sector and solve many other issues. Blockchain is revolutionizing the real estate industry, as such, there have been many successful projects with pioneers ready to lead the way in developing new ones.
In this article, we will explore the possibilities of tokenization in the real estate industry. This topic is highly relevant in 2021, as it will be a big trend. The future is digital, and Blockchain will offer potential for these properties to be allocated in fragments.
Tokenization is becoming a popular concept in the business world, and real estate tokenization is moving forward.
Blockchain is a large and decentralized database stored on many servers. If an update is made on one server, there is an update on all servers. Transactions are updated at the same time and can never be changed or deleted. Tokens are an asset, currency, or security that are connected to these transactions.
The real estate industry has been hindered by procedural difficulties and inefficiencies, which have led to the success of this market being jeopardized.
Slow and costly intermediaries have the potential to negatively affect economic activity. When there is not complete trust between them, red tape is required for compliance.
Blockchain, which is a peer-to-peer system, has the potential to improve our real estate process by eliminating intermediaries.
Blockchain technology creates trust between two contractual partners and guarantees a secure process through its technical. Blockchain also increases transparency and automation while enabling the international transfer of tokens in seconds.
Buying and selling real estate is a complex process because there are so many contingencies in place. Planning a new highway construction project may interrupt the sale of a house, for example.
Tokenization can break up a property into smaller shares, giving the opportunity to purchase less of the asset in comparison to owning a whole share in the case of traditional investments. Owners will be able to leverage the intangible assets of their property thanks to a new sales process that goes from static to an automated, dynamic process.
Tokenization helps institutions and retail investors diversify their portfolios.With tokens, you can now pay your rent with equity. Tokenizing 40% of the property and offering it on the secondary market, let’s you convert the portion into a mortgage-like system, where you then purchase more equity at any time.You can now invest in any type of asset with your crypto funds thanks to the use of smart contracts.
Potential of real estate tokenization
Blockchain-powered registrations can map ownership relations and make them visible in the digital world. This enables liquidity of real estate to be managed effortlessly, and all spectrum types of properties can be converted into digital assets with blockchain.
A good way to find liquidity is to pay back owners, which is mapped out accordingly. Real estate feeds are a great tool for asset managers in order to create liquidity efficiently and cost-effectively. In addition, there’s a door opening up for institutional investors to access capital that was previously tied up.
With Copymatic, you can avoid the costs of owning land — land transfer tax and paying high liquidity premiums. Most importantly, land ownership doesn’t require continuous maintenance anymore.
Using the blockchain and smart contracts, real estate dealerships can now be traded within some liquidity discounts.
Location costs and friction cannot restrict the ability to invest in remote assets. To comply with international cybersecurity regulations and to ensure technical security, Copymatic stores private keys. This key is necessary for the legal and safe custody of tokens.
The blockchain promotes the involvement of owners, investors and intermediaries.
