For a long time, people have associated traditional real estate investment with high capital requirements and prolonged, costly transaction processes, which makes it one of the most illiquid asset classes.
Yet, a significant transformation is currently taking place as the notion of tokenization gains momentum, generating a keen interest among real estate developers, investors, fund managers, and entrepreneurs. This approach is changing the way people invest in real estate and offering many benefits that were not possible before.
Tokenization’s Impact on Real Estate: A Game-Changer for Investors
Until recently, the notion of establishing precise financial stakes in real estate investments appeared impracticable. Legacy options for fractionalization of property, such as paper stock certificates, over-the-counter (OTC) trading, and brokerage firms, lack the liquidity, configurability, accessibility, and efficiency that security tokens now provide. The rise of blockchain technology has disrupted these traditional methods, leading to a new era of efficiency and accessibility.
Smart Contracts and Automation:
We at RealT use smart contracts to automate processes such as compliance checks, investor whitelisting, and post-issuance matters, including dividend distribution. A smart contract can also provide unique characteristics for each share class and customizable fee structures for tokenized assets with a low operational cost.
Enhancing Liquidity through Secondary Trading:
The true value of tokenization becomes evident in the realm of secondary trading. After the initial token issuance, designated networks or marketplaces enable easy and quick trading of fractional ownership interests. Automation of procedures, including Know Your Customer (KYC) and Anti-Money Laundering (AML) checks during the tokenization process, reduces the cost of secondary trading compared to traditional property transactions.
Beyond Borders: The Growing Acceptance of Tokens, Challenges, and Solutions for U.S. Adoption
As the landscape evolves, legal frameworks will likely adapt, fostering a more conducive environment for the broader acceptance of tokenized real estate investments.
Clear guidelines for token issuers and exchanges to report activities and follow regulations are also imperative in countries like the United States. The ultimate goal is to seamlessly integrate token transactions into the existing property ownership system, minimizing disruptions.
It’s evident that the landscape of homeownership is undergoing a crucial shift, largely driven by the tokenization of real estate. As we move forward, we can anticipate continual expansion and further advancements in this captivating domain. Ultimately, the efforts of companies like RealT are democratizing real estate investment and making it a reality for many who may have previously found it unreachable.
RealT has been working hard since 2021 to open the way for U.S. citizens to be able to buy RealTokens. It is our expectation that in the near future, which we anticipate to be next year, average Americans will finally be able to buy tokens. And what does that change? Plenty of possibilities.
Imagine that, in the near future, Jake, for example, an American citizen who rents an apartment in which he lives, decides to buy RealTokens for that same property. RealT’s weekly cash-outs allow him to choose between receiving his rent distribution in USDC or XDAI, or he can even reinvest it into smaller portions of that same property (or others) to increase his income week after week, allowing him to get even more fractions of the property he rents.
What does that mean? Jake will receive reimbursement for his monthly rent, and he will gain ownership of the same property. And who knows? Year by year, if he continues investing in those tokens, he could end up being one of the majority owners of his property!
Although Jake is not a homeowner right now, the landscape of homeownership is rapidly changing thanks to tokenization.
The future holds fascinating possibilities for individuals and families across the world to engage with real estate in entirely new ways. This innovative process, pioneered by companies like RealT, allows for fractional ownership of properties. This means that Jake and other average Americans like him could soon have the ability to invest in the property market despite not owning a home outright.
In conclusion…
The future of homeownership looks promising with the advent of tokenization in real estate investments. As this technology continues to evolve and become more widely adopted, it has the potential to reshape how we invest in properties while offering increased accessibility and efficiency in the market.
Join us in breaking down barriers.
Join the global set of RealT users who are receiving rental payments from U.S. real estate properties every day.
Take a look at the properties available on RealT on our website: https://realt.co/ and our social media below.
The information in this communication is for informational purposes only and shall not constitute an offer to sell or the solicitation of an offer to sell or solicitation of an offer to buy securities. No offer of securities shall be made except by lawful means of an Offering Memorandum meeting the requirements of the relevant jurisdiction(s) and securities regulations. This communication shall also not constitute a solicitation of a proxy, consent or authorization with respect to any securities or in respect of the proposed business initiative.
