Blockchain Tokenisation; The Key to Disrupting Real Estate Investment & The Student Housing Market

BenchCoin: From The White Papers, Clip 2

Blockchain Tokenisation of Real Estate

“The blockchain allows for the ’tokenisation’ of the real estate into tokens, which can be distributed to practically anyone and anywhere in the world to participate in the ownership of the real estate.​ The tokens are backed with the physical real estate. Hence the values are maintained by the underlying asset. It also​ involves the process of securely storing pertinent asset information onto an immutable distributed ledger. Tokens can then be traded in trustless peer-to-peer (P2P) markets,” — REIDAO

Perfect, let’s do just that!

Bringing Mobility to an Immovable Market

To best understand the significance of blockchain tokenisation to the real estate industry, and specifically the student housing market, we should first look at some of barriers and downfalls of real estate investments.

Common Real Estate Challenges;

• High Capital Requirements
• Low Liquidity
• Excessive Paperwork
• Government Regulation
• Time Consuming
• Fraud

These challenges can be multiplied when related to Student Property investments.

For example, investors cannot obtain mortgages or traditional financing for student pods, so the high capital requirements become much more difficult as the investor must have the full investment amount in cash. Because most average investors do not have $50,000-$150,000 or more in cash to invest, this limits these investments to the wealthy, which in turn, makes for a very thin market.

Due to the nature of student property investments, the property is single use which means the investment can only be sold to other investors. With a thin market and no existing marketplace, liquidity is practically non-existent.

With no open market, pricing is left up to the developers, who commonly overprice the units and overstate returns to subsidise their own profitability. In addition, management of the property is run by the developer with very little transparency.

The Blockchain Tokenisation Solution

Tokenising the property allows for fractional ownership with properties broken into small, affordable units where many investors can own a single asset.

Tokens may distributed to practically anyone and anywhere in the world and traded through decentralised P2P exchanges.

By putting the pertinent asset information onto an immutable distributed ledger and implementing smart contract technology, investors can easily and quickly make transactions without the heavy due diligence required of traditional real estate.

Tokenising the property can eliminate high capital barriers, provide significant liquidity to an immovable market, offer transparency to reduce fraud and furnish investors with a smooth, easy, trustless transaction process with access from nearly anywhere in the world (and from the touch of a smart phone!).

With so many benefits, it is easy to see how blockchain tokenisation will disrupt the real estate market and the positive impact it will have.

What’s up next…

In the next part of our series, “BenchCoin: From The White Papers”, we will take a look at the Online Marketplace Industry and current Global Trends.

BenchCoin Project on Medium: From The White Papers

BenchCoin ICO Website: http://hfbbenchmarkico.com/