In the present era, where blockchain technology is thriving, it enables one to tokenize both physical and digital assets like art, music, real estate, etc. One of the popularizing tokenization is Real Estate Tokenization; it removes many limitations and solves the biggest issues in real estates, like less Liquidity, low market visibility, fabricated ownership, high transaction cost & time, high capital requirement, legal restrictions, etc. With the right vision and motivation, it can be even more profitable. The future of tokenizing real estate is just blooming and some have began their flourishing journey.
In the coming years, Tokenization will revolutionize real estate investing and offer significant opportunities for high capital flow. This blog lets you know about the Tokenization of real estate, its great benefits, and the services we proffer to digitize your real estate asset.
What Is Tokenization Of Real Estate Assets?
Tokenization of the real estate property is the process of converting the ownership over the physical asset into digital tokens on a blockchain network. These distributed ledgers validate, synchronize, and share the real estate tokens with all the network participants, permanently recording the transactions and accessing them to the public. Real estate tokens are Security Token Offerings (STOs) that are similar to Non-Fungible tokens (NFT) and share the values like non-interchangeability, representing ownership, transparency, accessibility, etc.
There are 3 types of Tokenization of real estate like
- Commercial Tokenization: In this type of Tokenization, the commercial properties with legally compliant protocols are tokenized.
- Residential Tokenization: This type of Tokenization is where the fractional ownership of residential estate is tokenized for investors, asset owners, etc.
- Trophy Tokenization: In this tokenization process, the iconic buildings typically in popular real estate locations are tokenized.
- Individual Tokenization: Anyone can tokenize their real estate property in this type.
The Prime Advantages Of Tokenizing Your Real Estate
- Improved Liquidity: As Tokenization allows owners to make direct transactions from investor to investor, it increases the Liquidity of the asset.
- Proof of Ownership: This is one of the main perks of tokenizing real estate. The distributed ledger consensually shares and synchronizes multiple sites. This also facilitates the property owner with the unadulterated proof of ownership over the real estate property.
- Lower transaction costs: As the Tokenization of real estate uses blockchain technology, it decreases the transaction cost for exchanging these tokens. This also allows the investors to trade the token without incurring traditional closing costs.
- Eases property search: The quick and easy search of a property is another resolved issue by Tokenization. This lessens the investor’s job in finding the real estate token. This also enables the investor to search for potential investments in different geographical locations.
- Increased transparency: Real estate tokenization with distributed ledger technology has mitigated many issues like undeniable proof of ownership. Also, it has increased transparency and security in the real estate market.
- No Intermediaries: As with blockchain technology, the transactions are much cheaper and faster and involve no middlemen. Also, these intermediary-less exchanges have made trades easier for sellers, buyers, and investors.
- Low barrier to entry: The traditional real estate investment system wouldn’t encourage small investors. The Tokenization reduces the barrier for small investors. The assets are set in smaller amounts in tokenization. The transactions occur in a virtual environment and it encourages the participation of small investors.
Other Valuable Merits Include
- Easier Equity activation
- Efficiency through automation
- Additional capital source
- Fractional ownership
Our Real Estate Token Offering Services
- The initial step is to settle the deal of Tokenization after considering some vital factors. This includes asset type, jurisdiction, shareholders, and relevant regulations.
- The next stage is digitization, where the information in the traditional documentation format are uploaded to the blockchain network. The information is programmed into smart contracts to form a legal structure then the security tokens are issued. Also, we proffer various structures for the property owner to securitize their property like
- Special Purpose Vehicle (SPV) – The SPV is also known as Special Purpose Entity (SPE) and is used to secure assets and reduce financial risks. This structure is qualified only for institutional buyers or accredited investors and the tokens represent shares of the SPV.
- Real Estate Fund – In this structure, one can become a member of a real estate fund.
- Project Finance – Tokenization is an effective way to raise project funds.
- Real Estate Investment Trust (REIT) – The main benefit of this structure is its availability, and the investors can create digitized shares in REIT. The real estate token holders can participate in the REIT.
- In the next phase, the selection on which technology to utilize for Tokenization occurs. This stage includes the selection of a blockchain network, secure custody solution, KYC/AML, and Primary/ secondary marketplace.
- The real estate token creation and distribution to interested buyers or investors is the next phase.
- Next, our real estate token development company offers additional post support. This includes mortgage issues, formulation of corporate code, regular activity tracking of the token holders, dealing with legal issues, etc.
Why Choose Infinite Block Tech?
Infinite Block Tech is a leading Blockchain development company renowned for offering its services in developing the latest trends in the blockchain industry. Our indulging services supports and assists cryptopreneurs in their successful venture. Our Real Estate Tokenization Service enables the asset owner to gain the impeccable perks of tokenizing their property adeptly. We also offer prominent marketing services for your tokenized asset to increase its visibility and attract potential investors. Our experts provide 24/7 technical support.
If you are a real estate property owner looking for a potential path to utilize blockchain technology and digitize your property to gain its perks, then Infinite Block Tech is the right place for you.