Real estate is known to be a far-reaching, boundless industry. And blockchain-based tokenization thrives among potential investors because it creates an efficient business space with increased liquidity, globalization, and several other factors. The unique value of your real estate assets can be determined by tokenizing them to NFTs. The scarcity and uniqueness of NFTs will drive up the demand. These qualities are perfect for the real estate market, and digitizing opens several doors virtually. Represent your property in NFT and earn millions.
We have a checklist below that will guide you through the process of tokenizing your real estate assets.
NFT real estate tokenization means creating an NFT that can represent the ownership of a real estate asset in the virtual space. Take a look at the below steps to understand this better.
The type of assets, the place/jurisdiction, the type of shareholders, and the regulations under the particular place all play a significant role in finalizing the deal.
Becoming a Special Purpose Vehicle (SPV) lets you be a member of a real estate fund. With that, you can involve in project finance or participate in Real Estate Investment Trust (REIT).
Create the token using a suitable blockchain. Investors will require a custody solution to store their tokens safely. The securitized tokens are offered to investors through primary issuance or trading on the leading secondary exchanges.
After creating the NFT, a distribution plan needs to be developed for the created NFT. Then look into the various payment options available to the potential investors. The cap table updated on a real-time basis helps you view the total funds raised for your token.
Real estate tokenization is a win-win situation, beneficial for both the property owner and the investor. The volatility and demand of token assets are a boon for this industry.
You can expect a high-volume liquidity inflow upon tokenizing your real estate assets. Tokens can significantly convert property values into cash, and their liquidity helps in efficient buying and selling.
Multiple owners of a property can split the value of shares. It also eases your burden to endure challenges when the market is not feasible.
The most prominent highlight of the virtual real estate market is its geographical representation. Anyone from anywhere in the world can buy/sell without barriers and gain ownership of assets.
Tokenised real estate transactions take place through decentralized blockchain-based exchanges. Tokenisation reduces the cost of intermediaries and mediators like brokers. The owner can directly conduct peer-to-peer transactions with the buyer vis-a-vis.
Records are non-interchangeable with the security of blockchains for transactions. Immutability gives the users of your marketplace and you complete anonymity while transacting.
Real estate tokenization reduces the time needed to execute a land deal. You are also free from time-consuming paperwork. It guarantees efficient peer-to-peer transactions with anyone, anywhere.
You can divide your real estate assets into many parts after tokenization. You can sell them at lower prices, which is called fractionalization. You can onboard many investors and have a diverse group of investor portfolios.
NFT marketplace has equal distribution among every user. No one entity has significant control. The real estate assets are also safe and are accessible with advanced cryptographic technologies like private keys.
It allows simplified governance of investor rights. Any secondary transactions placed can be easily tracked in real-time by partnering with third-party exchanges. Investors will get the returns delivered on time, and they also get to participate in the governance process via voting.
Creating a digital asset as an NFT token based on the real estate using distributed ledger technology is known as NFT real estate tokenization. An owner can claim fractional ownership of the real estate asset based on the token percentage they bought.
Assume that you have 500,000 sq foot land with a market value of $150 million. If you decide to tokenize the property, each sq foot gets divided into tradable shares. Then you will have 500,000 shares in total, with each share priced at around $3000. Tokenizing an asset lets you fragment it and put it out for investing. Fractional owners of the tokens can split the vast property value based on the token percentage they’ve bought. Tokenizing a real estate asset can enable small investors to enter the market and own shares without restrictions.
The entire foundation of crypto-based crowdfunding and tokenization is built on blockchain. Using a blockchain network eliminates the need for brokers, banks, or lawyers from the system. Blockchain takes care of property management, payment receiving, and legal documentation. The complete transparency offered by the distributed ledger eliminates the chances of fraud. It makes investing in real estate more secure and equitable.
The features and integrations you choose for the token will decide the actual cost of the NFT real estate tokenization platform. However, to save your time and cost, the best option would be to hire a real estate tokenization company and avail the benefits of their ready-made solution.
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