Bundling rental agreements with NFT Art
A story on how we ended up renting our apartment as NFT Art Poster collection “52 Weeks of Aleksanterinkatu 8”
Half a year ago I didn’t know how much I didn’t know about blockchains. Cryptocurrencies, blockchains, Bitcoin, mining, Ethereum, Dogecoin, Elon Musk, Tesla,… Most of us have probably heard something of these topics, not fully understanding what it’s all about. So this year, I finally decided to look into it myself. Here I sum up what I learned, and how me and my wife ended up renting our apartment as NFTs.
Learning about crypto and blockchains
The first and the biggest learning to me was how vast amount of money investors, companies, and people in general have invested into Bitcoin and other cryptocurrencies! Bitcoin has the 6th largest market capitalization amongst all the largest companies in the world, Ethereum being the 14th. Even Solana, which has just lately received a lot of attention, has a market cap of a huge 52 billion euros. This really had me thinking there must be a reason for all of this.
The second biggest learning was the fact that blockchains like Ethereum, Cardano and Solana, are not just cryptocurrencies, but development platforms which enable software developers to write actual program code / applications, aka. ‘smart contracts’ into the blockchain themselves. To me, as a software engineer, this opened up a whole new interest into understanding what kind of applications could blockchain technology be used for.
Introduction to NFTs (Non-Fungible Tokens)
In the year 2021 NFTs (Non-Fungible Tokens) have been a massive trend. The first half of the year NFT sales amounted to over $2.4 Billion. Most expensive NFTs have been priced at tens of millions. So what are they? NFTs are unique items stored in a blockchain. They represent ownership of things such as art, collectibles, game items or even real-estates. NFTs can be enabled to function as agreements that automatically take action when something happens— such as automatic royalty payments at resell of an NFT.
Time to rent out the apartment as NFT
A few months back at the same time as we were learning about this whole new world of blockchains and cryptos, we faced an issue with our tenant moving away.
We have a mortgage to a lovely spacious old 1929 two bedroom apartment at the center of Tampere, Finland — our very first own home. The nostalgic red brick house with high ceilings and original wood doors was a great home for a small family. However, as our family grew, we moved out and have had it rent out ever since.
Now at this time our very first tenant was about to move out to another city. We considered between options of finding a new long term tenant, and Airbnb. However, our heads filled with all these new blockchain ideas, we thought “why not think outside the box and do things differently!?” And that’s when the idea for our very first NFT collection was born— “52 Weeks of Aleksanterinkatu 8”.
“52 Weeks of Aleksanterinkatu 8” — An Art Poster collection backed with 52 rental agreements in the year of 2022!
The idea of our collection is laid out here:
- 52 Art Posters as collectibles, each unique with different themes and styles. Some relate to international celebration days such as Moon day or Valentine’s day. Some relate to ongoing events in Tampere on that week, such as Ice Hockey World Championship at Tampere on weeks 19–21, or Blockfest on week 33.
- Each poster comes with 7 days of free accommodation at our apartment at Aleksanterinkatu 8, Tampere, Finland
- All you need to do, is buy the Art Poster NFT, and own it while checking in and using the accommodation week.
- All weeks are auctioned. The idea is that the events or seasons would better match to actual price, defined by demand.
The collection is up on the largest Ethereum NFT marketplace — OpenSea. OpenSea allows creators to add unlockable content to their NFTs, which is visible only for the NFT owner. For this collection, each week includes an A2 print sized file of the Art Poster as unlockable content.
Here’s the collection at OpenSea:
https://opensea.io/collection/52-weeks-of-aleksanterinkatu-8
We believe this is a one of a kind project with a novel idea, living in the Ethereum blockchain. There has certainly been interest and use cases for NFT rentals and real-estates before as seen in these articles: Forbes article about real-estate and NFTs, and The Verge report of ‘the world’s first actual house being up for auction as an NFT.
However, backing up NFT collectible art with a year’s worth of accommodation is something new. And we believe this is only the beginning of what NFTs could do to shared economics, affecting more on what people can do to share and benefit from what they have, building blockchain enabled communities and experiences around their small scale Airbnb type of home accommodations, or other shared economics services.
Following are some more detailed points on why NFTs are a great fit with rental agreements:
Why to choose NFT rental agreements over using some short-term accommodation services? (like Airbnb)
Bringing your short-term renting agreement to a blockchain as NFT can have some benefits over services such as Airbnb. First of all you won’t be tied to any external renting service —NFT agreements you create can be sold via any NFT marketplaces. If you’re renting more than just one place, you could even build your own marketplace at your own website.
Here are some other key benefits:
- Maximize your profits with auctioning
NFTs can be easily auctioned at marketplaces such as OpenSea or Rarible. You set the minimum that you’re happy with. For high demand seasons, such as public events or holidays, you could get much more profit than expected. At the times when clients are rivaling for the best available accommodation, you can maximize your profits with auctioning. This is not possible with alternatives such as Airbnb. - Royalties of secondary sales
NFTs can be resold, just like physical movie tickets or discount coupons. In physical world ticket reselling may be disapproved, but with NFTs you can turn reselling to your advantage. NFTs allow you to set a royalty percentage for all secondary sales, which causes automatic payouts to you each time the NFT is being resold. - Receive the money well in advance
Auctioning your NFT rental agreements well in advance may entice resellers in hopes of making profit in secondary sales. This way you’ll be able to get the money well in advance. Plus you’ll still get royalties for all the resells. This will also ease the pressure to actively advertise your apartment to keep it ‘fully booked’ just in time.
Taking it further — Bundle up your apartment with a unique and exclusive NFT collectible to build a community of collectors
NFTs backed with some real world physical value can be called ‘asset-backed NFTs’ (for example NFT is tied to a redeemable item), whereas ‘utility NFTs’ are NFTs that can be used for example as a VIP-pass for a membership club, accessing a voting, or used as part of a game.
Here are some reasons why you would want to bundle short-term rental agreements (or any other services) with a collectible set of NFT art:
- Demand for digital collectibles.
There are a multitude of companies who are making millions with releasing their own NFT collectibles, such as Bored Ape Yacht Club (BYAC), NBA Top Shots, CryptoKitties and CryptoPunks. These are similar to any collectibles you might have (physical art, basketball cards, records etc.), but they live in the blockchain. With big social media companies such as Meta (Facebook) building the future of metaverse, you can be sure the awareness, interest and demand for digital goods and collectibles will but increase in time. - Building a community
Backing up your rental agreement with a collectible can create a real community with all the clients you’ve had. You could even create a virtual membership club for the NFT holders, such as what Bored Ape Yacht Club (BYAC) made. Maybe you own another business running an e-commerce? Why not give your community (aka. NFT holders) discounts on your products? Maybe evolve your community into a Decentralized Autonomous Organization (DAO), investing and owning their own properties? The sky is your limit at ways you can leverage blockchain technology to build your community. - Clients may view their holiday as an investment
Clients are more inclined to rent your apartment knowing there is a chance that their investment (the collectible bundled with the rental agreement) could potentially keep their value even after their rental agreement ends. - Something to remember by — Spread the word
If you do your homework and create collectibles that are aesthetic and meaningful, your customers are more likely to put them up on their wall, let it be physically printed, or in the digital realm. This will help them remember the good experience they had at your place, have them return back, and help spread the word.
Last words
Blockchains are the natural evolution of web 3.0. In the future blockchain technologies will have a huge impact on a variety of fields such as health tech, finance, IoT, logistics, secure identification and already mentioned real-estate and shared economics (just to name a few).
With our NFT Art Poster collection “52 Weeks of Aleksanterinkatu 8” — all backed with a free 7-day accommodation at our owned apartment — we want to inspire and spark people to rethink NFTs and NFT Art. NFTs can be much more than just digital art —NFT art collectibles can be combined with digital utilities or physical real world assets or even services, to bring them added value. In our case, with our Art Posters we’re telling a story of the whole year of 2022 with varying themes and styles, and wish it’ll be of a value for the NFT owners and tenants spending their weeks at the apartment, holding on to their NFT Art Posters as the memories of good times.
— Timo Onnia
Author of the NFT Art Poster collection “52 Weeks of Aleksanterinkatu 8”
{ Disclaimer — I am not a professional invest advisor and nothing here is an investment advice. }
