Blockchain brings several utilities into the real estate ecosystem. It brings a transformative impact on trading properties with more transparency between the seller and buyer of the asset tokens. The tokenization of real estate assets makes the process of investment more democratic, inclusive, faster and cheaper transactions.
These tokens are immutable and it can be traded in the secondary market via crypto exchanges. Real estate tokens, otherwise known as security tokens, are created to represent the shares of the property which are equivalent to the value of the asset.
The tokenization of property will increase the financial inclusions of the average investor, it gives broader access to illiquid assets to the huge investor base. Let us see the benefits of real estate tokenization.
The property tokenization addresses several challenges in the real sector.
Access to Capital:
Fractionalising the property through a blockchain-based system offers smaller investment denominations and opens the market to the more diverse group of investors.
Liquidity:
The illiquid nature of the property is a greater disadvantage for the investor. However, with the increased awareness about real estate security tokens, liquidity is highly feasible with trading accessibility in the secondary market. Though token trading is quite low, its scope is promising in the long run.
Cross-Border Transaction:
Any transaction across the border always comes with a lot of restrictions and even greater investment challenges.
With blockchain technology and tokenization, we can bypass the challenges and streamline the smooth transaction facility. Accessibility to the global market helps the investors to diversify their investment portfolio.
There is a huge requirement for seamless execution of this transformative technology in reality. If you are looking to build a platform, Blockchain App Factory will help you in developing legally compliant real estate tokenization platform.
