The dilemma of whether to invest in real estate as a residence or to speculate on a return has always torn potential investors. At Ouibild, we believe that blockchain is the opportunity to bring these two aspects to their paroxysm by capitalizing on the Web 3 tools
Investing in real estate has long been a popular way for individuals and institutions to diversify their investment portfolios and earn passive income. There are a number of different ways to invest in real estate, including through real estate investment trusts (REITs) and exchange-traded funds (ETFs) that track REITs, as well as through digital tokens that represent ownership stakes in real estate properties.
REITs are companies that own and operate income-generating real estate assets, such as office buildings, apartment complexes, and shopping centers. REITs are required to distribute at least 90% of their taxable income to shareholders as dividends, making them an attractive option for income-focused investors.
REIT ETFs, on the other hand, are investment vehicles that track the performance of a basket of REITs, allowing investors to easily diversify their real estate holdings. These ETFs trade on exchanges like regular stocks, allowing investors to buy and sell them easily.
In contrast, digital tokens that represent ownership stakes in real estate properties are a relatively new way to invest in real estate. These tokens are created using blockchain technology and can be bought and sold on digital asset exchanges. Tokenization allows for the creation of digital tokens that represent small ownership stakes in a property, making it possible for investors to easily purchase fractional ownership in real estate.
One of the key differences between REITs and REIT ETFs on the one hand, and tokenized real estate on the other, is liquidity. REITs and REIT ETFs can be illiquid, with investors often having to wait for lengthy periods before they can sell their holdings. Tokenized real estate, on the other hand, allows for the quick and easy buying and selling of ownership stakes using blockchain technology, making it a more liquid investment option.
Another difference is the potential for higher returns. Because tokenized real estate allows for fractional ownership, it opens up the market to a wider range of investors, potentially increasing demand and driving up prices. This could lead to higher returns for investors compared to traditional REITs and REIT ETFs.
Additionally, tokenized real estate has the potential to make the property management process more efficient. By using smart contracts and other blockchain-based tools, property owners and managers can automate many of the time-consuming tasks involved in managing a property, such as collecting rent and handling maintenance requests. This can save time and reduce the potential for errors, making the property management process more efficient and effective.
Overall, while REITs and REIT ETFs are established and well-known ways to invest in real estate, tokenized real estate offers a number of potential advantages, including increased liquidity, the potential for higher returns, and more efficient property management. As such, it is worth considering for investors looking to diversify their real estate holdings.
We have offered as first product tokenized real estate, your wait to invest in REITs on chain should not be too long ;)
Kreez, Find me on 0xadvisory and https://twitter.com/Kreez___
