The Role of Blockchain in Commercial Real Estate
When the Wright Brothers made their first historic flight in the year 1903, they had undertaken a monumental endeavor that would change the very nature of human civilization. Their prototype aircraft would go on to change how mankind would travel and fight its wars. It is a known fact that the outcome of any military undertaking depends on the quality and the number of military aircraft possessed.
Similarly, blockchain technology is set to become the linchpin of change for multiple industries, from banking to logistics. It is in the realm of real estate will this change be all the more visible.
The next big thing in real estate: Blockchain
With blockchain having been recently been adopted in commercial real estate (CRE) industry, CRE executives are finding out that blockchain-operated smart contracts can play a crucial role in the industry. It has the potential to transform core CRE operations from property transactions like purchase, sale to management transactions. Any information that has been entered into the blockchain system cannot be corrupted thanks to its ironclad security, which allows for safe and secure transactions. It is these specific characteristics that make it useful in real estate transactions
Thus it can be said that the way handling of money and transactions are to change, a change which is inevitably underway. Soon brokerages will need to adapt and enhance their business models to understand and enable smart transactions which can thrive in the era of the blockchain.
It can be noted how blockchain’s use could have the potential to revolutionize rental property payments by introducing cost-efficiency and better decision-making in leasing transactions which is sure to be achieved with a shared database, where a whole vertical of stakeholders including owners, tenants and service providers can interact with ownership information, or transaction history in an open, secure way.
Combining it with new models of house ownership that can span the global market, decentralized payment projects could be used to facilitate low-cost, high-speed transnational micropayments which would distribute payments among every stakeholder. With regards to payments, introduction of smart contracts into blockchain real estate ledgers and transactions while connected to IoT has a good potential in streamlining various processes earmarked in real estate, such as releasing apartment ownership, or important rental documents upon the completion of a payment transfer. The benefits of this aspect of blockchain use cases, when applied to real estate, are already being recognized by a variety of private institutions and governmental bodies.
But aside from the safe transactions, blockchain is also addressing a fundamental aspect of the CRE industry — the need for transparency.
The advantages of using the blockchain
There is no doubt that the blockchain can make some solid headways into the real estate industry, here is some way the technology can be used:
1. Title Deed
Imagine having the title deeds on the blockchain database.
Anyone can access the data easily. No permission will be needed to access the information because it will be available digitally.
For those who won a piece of land, they can rest easy as they are sure that their title deeds are secure. Since title deeds can be verified by the system, the authenticity of the deeds can be assured. Thus to a considerable extent, illegal land grabbing will be dealt a decisive blow.
When someone buys a land, they are given a token, as proof of ownership, together with the title deed.
2. Smart Contracts
A smart contract is made by the seller and the buyer.
When the seller wants to sell a property, they can put all the necessary details of the property on the Blockchain system, kind of like putting up an ad for the property on the net. The information will be available for all the buyers who are part of the blockchain system who are interested in buying the property.
Likewise, the seller(s) will have all the information they want about the buyers by accessing the system. Because of this transactions can take place at the drop of a hat without any unnecessary friction.
In a rental market where, after a certain amount of time, when it is time for the tenant to vacate the property and asks for the refund, the Blockchainsystem can automatically sort the shares of between the tenant and the property owner.
3. Digital Currency
When a transaction is completed, you don’t have to wait for the cheque to be cleared or the funds to be transferred.
The exact amount will be automatically moved from the buyer to the seller’s bank account. Because there are no middlemen, you don’t have to pay for any intermediary. As the use of digital currencies reduces the chances of theft and fraud.
4. Cross-border Transactions
The use of blockchain technology can grant a wide array of geographical freedom(s).
How can this be profitable for the CRE industry?
Currently, there are many foreign nationals or expats who find it difficult to apply for rentals and in buying properties outside their home country. However, the Blockchain system does not discriminate buyers and sellers based on their location, transactions can be done seamlessly and without stress no matter where you are in the world.
In a world with shifting technologies, it is easier to come up with solutions that can improve different industries.
The key is to keep up with new trends.
OLM Real estate has a tremendous vision of solving the housing crisis in Sweden and as the technologies advances and make human lives better, OLM real estate wants to provide every person to have smart houses so thus carry a vision to build 15,000 affordable, environmentally and socially sustainable apartments in the key areas of demand before 2023.
To know more about us, kindly check our website: https://www.olmrealestate.io