What is Real Estate Tokenization?
The tokenization of real estate can also be called fractional real estate investment. Real estate tokenization converts the value of a physical bricks-and-mortar property into tokens stored on a blockchain. The buyer of the token has digital ownership of the token. Each token represents a fractional share of the physical property.
Real estate tokenization is the process of dividing a property into hundreds or thousands of parts or tokens, where each token represents a specific fraction of the property.
The process is stored digitally on a decentralized database. This is a database that does not exist in one specific server or location; the decentralized database is spread over many servers and locations.
The technology that runs this process is called blockchain. There is no ‘one’ blockchain, there are many. The word ‘blockchain’ refers to the technology, not to a specific thing. For example, Optical Recognition Technology (ORT)is a technology for extracting data from images. There is no ‘one’ OTR – it is a technology that anyone can use.
The decentralized database is like a huge ledger that everyone can see. The blockchain network synchronizes and shares the transactions and information with all the network participants.
What are the benefits of real estate tokenization?
Real estate tokenization offers:
- Accessibility and ease of use.
Because tokens are inexpensive (usually $10 to $50) they are affordable and allow many more people to access the property market.
Real Estate tokens are easy and quick to buy and sell and are secure.
- Lower costs.
Blockchain technology streamlines and simplifies the tokenization of real estate, resulting in faster and cheaper transactions.
Information and transactions recorded on the blockchain are secure and permanent. It cannot be changed, deleted, or hacked. This means that your purchase or sale of real estate tokens is on permanent record.
- Spread your risk.
If you are investing in real estate, you can buy tokens for several properties, to spread your risk rather than putting all your investment eggs in one property basket.
Applications of real estate tokenization.
A property owner can use tokenization to SELL his property. Investors buy the tokens and become co-owners of the property. This was done by a company in France to sell a €6.5 million luxury development. They issued one million tokens at €6.50 each, and buyers snapped up anything from 10 to 1,000 tokens each.
A property owner could also use tokenization to raise cash by entitling the token owner to a share of a property’s income, but NOT ownership. This is tokenization for investment. You never own a part of the property, but you DO own a share of the income generated by the property, eg. rental income.
The Top Platforms for Tokenization of Real Estate
Vairt – Another blockchain company situated in Ohio is Vairt. The company is aimed at real estate investors who are interested in generating a secondary income as a part of the global real estate network. It’s a robust platform that provides a wide range of tools and resources, helping investors maximize their profits and make their plans a reality. Vairt sources and screens investment properties by using a 100-point screening tool backed by a third-party valuator for confirmation.
ReaIT – located in Boca Raton, FL. The company is actually an international one, allowing investors worldwide to explore and take a chance on investing in the US housing market. The RealT platform aims to assist investors in buying tokenized property, which allows them to access low-maintenance ownership’s and cash flows.
SMARTRealty – Located in Seattle. With SMARTRealty, the investors follow the protocols established by smart contract technology. The platform operates by relying on smart real estate contracts associated with rental agreements and property purchases. If the protocols aren’t met, it automatically leads to the termination of the agreement—which adds a layer of security.
Bricktrade has been reinventing property investment through tokenisation, which has made it possible for people from all walks of life to start building a property portfolio. By utilising blockchain technology, the company has managed to streamline the process of property investment, making it more accessible than ever before. Thanks to the unique brick-by-brick investment model, anyone can start investing in property without having to go through a traditional financial institution.
Would you like to interest investors in your company without all of the hassle? Consider tokenization with SolidBlock. Their TokenSuite platform makes it easy to issue, manage and allocate tokens. You’ll leverage blockchain for its decentralization, transparency and immutability and discover the benefits of automated Books and Records, KYC/AML whitelists, distribution of funds, and financial due diligence that’s integrated directly into the token. Tokenization creates a paperless way to manage investors compliantly. Give them a try today!
Why settle for a traditional investment like stocks or bonds when you can own a stake in a Honey Brick? Our platform offers a unique and easy way to fractionalize and tokenize ownership in commercial real estate, so you can buy, earn passive rental income, and sell your investment instant, low cost, and enjoyable. As an SEC-compliant investment, our Honey Bricks provide a great way to diversify your portfolio and earn passive income. You can easily fractionalize your ownership so you can buy as little or as much as you like, and our platform makes it easy to monitor and manage your investment. If you’re looking for a unique and easy way to invest in commercial real estate, Honey Bricks is the perfect solution. We offer a variety of properties to choose from, so you can find the perfect investment for your needs. And our tokenized ownership makes it easy and affordable to buy, sell, and earn passive income from your investment.
Block Square is a premier white label platform provider for the tokenization of real estate. Block Square offers a complete solution for tokenizing real estate, including a secure, blockchain-based platform and a wide range of support services. With Block Square, you can easily and securely tokenize your real estate assets, allowing you to raise capital, sell fractions of your property, or create a new asset class for investment. Well worth a look
Smartlands is a novel tokenization platform that brings previously unavailable investment opportunities to the market, with a low ticket size that makes it easy to diversify and create a portfolio. The fully digital, fast and secure processes are user-friendly, and the secondary market provides liquidity for the tokens.
Lofty is a real estate investment platform that makes it easy to diversify your investment portfolio. With Lofty, you can invest in a variety of properties without the hassle of traditional real estate investing. Diversification is key to any investment strategy, and with Lofty, you can easily add real estate to your portfolio. With low barriers to entry, Lofty makes real estate investing simple and easy. Invest in a variety of properties without the hassle of traditional real estate investing. With Lofty, you can: -Easily diversify your investment portfolio -Invest in a variety of properties -Get started with a low minimum investment.
Goldenbrix’s worldwide market place is coming soon, and will be listing tokenized properties for you to invest in from compliant platforms in the UK and around the world. This will provide investors with greater choice and flexibility when it comes to investing in property, and will also allow them to diversify their portfolios across different geographies and asset classes.
The BRIKbc platform provides investors with the opportunity to buy Property Tokens linked to high quality Real Estate Properties in Australia. Each Property Token represents an ownership stake in the underlying property, and can be traded on the BRIKbc platform. BRIKbc is focused on presenting luxury Real Estate Properties in blue-chip locations. By investing in Property Tokens, investors can gain exposure to these properties without the need to purchase the property outright. Each BRIK Token series represents one Real Estate Property Project. By investing in a BRIK Token series, investors can gain exposure to the property development process, from planning and construction through to completion. BRIKbc Projects provides investors with the opportunity to generate returns from the development and sale of luxury Real Estate Properties. By investing in BRIK Token series, investors can gain exposure to these high quality properties without the need to purchase the property outright.
The Bee Token – also located in San Francisco, and takes on a totally different approach to blockchain-powered real estate investments. The platform’s focus is on decentralizing short-term rentals. In that sense, it’s quite similar to Airbnb; it allows homeowners and investors to rent out their properties. But in the case of The Bee Token, they do so in exchange for cryptocurrency. So, in essence, it’s a housing-related crypto real estate business.
ManageGO – ManageGo is another NY-based blockchain business. The platform essentially leverages blockchain technology for owners of rental properties. To be more specific, ManageGo assists both owners and property managers in overlooking and processing payments, maintenance ticketing, and running credit checks.
Commercial real estate tokenization
Commercial real estate tokenization concentrates on commercial properties such as apartment blocks, condominiums, offices and retail centers. One prominent company in this area is RedSwan in Houston, Tx..
White Label tokenization platforms
If you are looking for a turn key solution to start your own tokenization platform for your property or investment business, their are a number of companies that give you this solution instead of hiring your own blockchain developers.
1.Digishares– Leading White Label platform provider that enables you to tokenize your real estate assets and get more control and flexibility over the process. We enable you to automate, reduce administrative cost, fractionalize and increase liquidity through trading. DigiShares is a white-label software solution for the issuance and management of securities and real estate investment on the blockchain.
2.Solulabs-Get a fully-customized white label crypto real estate tokenization solution with multiple blockchain support and redefine the experience of buying and selling the tokenized real estate.
Real estate tokenization is changing the way we invest. It brings accessibility, affordability and security. Real estate investment is no longer reserved for people with access to substantial funds. See all these companies here
You might also like to read:
White Label Real Estate Tokenization Platforms – The Future of Real Estate Investing
CyptokingOctober 22, 2022 at 1:36 pm
This is such a fascinating subject and if you are in the property business its well worth getting up to speed. This is already happening its not a pipe dream and is set to be the next big thing in property investment and raising capital without having to use traditional lending sources
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