Most investors consider the real estate sector the most significant “pillar” among the three pillars of wealth creation. Statistics indicate that the leading real estate asset, the family home, makes up 2/3 of the family patrimony. Considering these numbers, imagine, what if you can generate money selling a piece of your property that is not being used? Well, let us briefly look at how real estate tokenization works.
Real Estate Tokenization
Tokenization is basically a modern innovation that is dependent on blockchain technology. It is the process of converting ownership rights in a particular asset into digital tokens on a blockchain network. Each token represents a fractional share of the underlying property. Unlike utility tokens, asset-backed tokens derive their value from the underlying property.
Tokenization has created new channels to access the real estate industry in a way like never before. It has given investors new investment channels and given property owners methods to get the most out of their assets.
How Homeowners Can Benefit from Tokenization
Fractional Ownership of Assets
In the modern age, it is almost impossible to sell portions of a single property. The real estate sector lacks practical tools that can enable property owners to make additional income sources by renting or selling out fractional shares of the property.
However, tokenization presents the necessary mechanism for homeowners to sell shares of their properties by listing them on secondary marketplaces. You can convert fractional shares of your asset into blockchain tokens that are tradable on global exchanges.
Access to a Wider Pool of Investors
Jurisdictional regulations and geographical limitations bound the traditional real estate industry. This makes real estate deals complicated for both sellers and buyers. For example, it may take you several months to years to sell your property. This hinders the liquidity of real estate for both homeowners and investors.
Luckily, tokenization offers a platform that can entirely alter the dynamics of selling a property. It avails the possibility of selling digital tokens on a global marketplace, which is not limited by geographical and jurisdictional aspects. Besides, it eases the complex procedures of selling or buying properties.
Real estate investments require high liquidity, be it purely for investment purposes or buying a house to live. Furthermore, real estate investments remain blocked for a lengthy period, making it hard to extract instant liquidity from this ‘pillar of wealth.’
Tokenizing properties can instantly free up liquidity by buying or selling fractional ownership on global markets. Investors can choose from various properties globally and buy asset-backed tokens on global markets. This ensures that homeowners instantly gain access to the liquidity that was previously blocked.
Elimination of Brokers
The traditional real estate markets rely on intermediaries to facilitate transactions. Many intermediaries charge heavily from the purchase of property to the completion of regulatory requirements, making the whole process lengthy and tedious.
Blockchain enables peer-to-peer transactions without the need for brokers. Through smart contracts that run on a blockchain network, tokenization eliminates middlemen from real estate transactions.
Property owners do not need to pay hefty charges to brokers to connect them with investors. Enlisting their assets on a global market that supports tokenized real estate requires minimal transactional charges compared to the traditional stock markets.
Access to Premium Investments
The real estate industry is often limited to premium investors. By enabling fractional ownership of property, tokenization breaks such investment barriers. Additionally, homeowners enjoy a wider pool of investors.
Tokenizer Blockchain Banking Platform
Tokenizer is a blockchain investment banking system that champions accessible, transparent, and safe financial services. We believe that everyone deserves equal access to investment and fundraising opportunities. That is why we are democratizing access to capital for investors and fundraisers by making investing and fundraising efficient, safe, and accessible to everyone.
Are you in need of raising funds or investing in security tokens? Apply to raise funds through Tokenizer by filling this application form. If you want to invest in security tokens, sign up for a Tokenizer Investment Account today, and if you want to liquidate and trade-in Asset-Backed Tokens, we have a decentralized exchange designed for you! You can also contact us to order a metallic crypto card at $149 only.
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