Cryptocurrency really changes the game for cross-border real estate
transactions allowing people from all over the world to invest in
fractional real estate. With as little as 2 ETH people can benefit from
income producing properties along with capital appreciation. Because
it’s built on the Ethereum platform with over a $50 billion market cap
there are plenty of traders willing to purchase security tokens making
it a liquid environment. Not only do you have more cross-border access
through cryptocurrency than ever before, but you also have a lower
minimum investment amount required. The Evolution of Real Estate Investing
Many
people believe that real estate investments are only a game for the
rich. That use to be the case, in the past you did need the right
connections to get access to real estate deals. Not only did you need
the right connections, but you also needed massive amounts of capital.
Those barriers to entry limited who could get involved with real estate
and convinced most that it would never be an option. In the last few
years there have been many changes that now provide real estate
opportunities for everyone. Here is a timeline of some of the
significant changes that have been made in the last few years.
WHAT IS REALTY RETURNS?
Real estate is a 217 trillion-dollar market and it’s largely illiquid
for 95% of the world today. In the past, you only had access to real
estate if you were already rich, or had rich friends, meaning that most
people weren’t able to benefit from the passive income and capital
appreciation it provides. 10 Advantages of Investing in Real Estate Through Blockchain
There are many advantages associated with investing in real estate through blockchain technology, and here are the top 10.
Greater Accessibility
Real estate has been an investment vehicle of the wealthy for a very
long time, they have known the power of passive income and capital
appreciation. The problem is that it’s never been accessible to regular
people, the barriers to entry have always been to high, especially when
it comes to commercial real estate and multifamily housing. Some of the
barriers are accessibility to the right sponsors and fund managers,
financing, cash requirements, and accreditation. It use to be that you
had to no someone who knew someone to get involved. Today platforms cut
out the expensive middle man and provide global access for investors to
browse properties and invest in shares of real estate using
cryptocurrency.
2. Cross-border transactions
Residential and Commercial Real estate investing abroad has always had
great appeal to investors but many haven’t been able to enjoy the
returns real estate provides due to not being able to find the right
investment property, high cost of purchase, difficult transferring funds
across border, Immigration laws and visa issues, financing, prohibitive
U.S tax laws, exchange rates, and loss of home country benefits to name
a few. Blockchain technology bypasses these major challenges and
creates a smooth streamlined process through tokenization. With global
access investors can truly diversify their portfolio based on geography,
country, region, and economy. It opens up access to the US real estate
market which has been steadily increasing in value since 1963.
3. Liquidity
One of the biggest drawbacks traditionally with investing in real estate
is the illiquidity. You may want to take advantage of the cash-flow and
capital appreciation but also want some liquidity for a rainy day.
Blockchain technology through online real estate platforms has made this
a reality. Through ERC-20 smart contracts on the Ethereum platform you
can buy and sale real estate tokens through the exchange, creating more
liquidity than ever before. Because the cryptocurrency market is in the
hundreds of billions of dollars an exchange provides an easy accessible
place to buy and sale with ETH. You can now reap the benefits of real
estate ownership and have liquidity at the same time.
4. Tokenization
By tokenizing real estate assets on the blockchain it’s easier for
property owners to offer a fraction of their asset to the masses, and
it’s easier for the masses to invest in real estate around the globe, a
win-win. Each security token represents a stake or share of the asset
that has been divided into small portions making it affordable to the
recent college graduate, single parent household, and retiree. This
digital ledger on the blockchain contains the history of each real
estate transaction time stamped and immutable. Platforms like
RealtyReturns embed compliances at the token level and allows for
decentralized trading of across any platform that supports ERC-20
tokens. This significantly increases liquidity in comparison to
confining trade to a single centralized exchange. It gives the average
investor an opportunity to convert their ETH into real estate and reap
the rewards of income generating assets and capital appreciation, and
stability for those that made a fortune in ETH that are seeking to
protect their recent gains from the volatility of the crypto markets.
5. Greater Diversification
Global real estate investing through blockchain not only allows you to
diversify by region, but also allows you to spread your money into many
different types of real estate whether it’s residential, multifamily,
commercial, or cash flow properties. It also gives you the ability to
invest in different classes of commercial real estate around the globe.
Whether you are looking for brand new class A office space in a thriving
community, a triple net lease retail property with little oversight, or
a rehab class C project with significant capital appreciation, this
type of diversification will be available. With a minimum investment of 2
ETH you can spread your money regionally into different classes of real
estate. Some platforms offer commercial triple lease opportunities that
are the Crème de la Crèmeof investments in real estate.
6. Quicker Transactions
Real estate transactions are notorious for being slow in nature, it
could take you at minimum six months to purchase an international
property if you are lucky. One study finds that 56% of Chinese investors
spend over 1 year finding their ideal US investment property according
to Juwai Chinese Consumer International Travel Survey 2018. There are
missed opportunities and lower returns when it takes that long to invest
in real estate. Companies like RealtyReturns have an easy
point-and-click user friendly interface allowing you to invest in real
estate through cryptocurrency in a matter of seconds.
7. Less fees
Investing in real estate internationally is going to cost you a lot of
money in fee’s. A few that are worth mentioning are exchange fees,
transfer fees, broker fees, attorney fees, taxes, and investment fees.
It can be an expensive process that cuts into your bottom line, making
it less appealing to invest abroad. Tokenization removes you from the
process above and doesn’t require expensive third-party intermediaries
to increase your costs. Less fees means that you get to bring in more
income and improve your overall return.
8. Lower Investment amount
In the past if you wanted to invest in real estate you would expect to
spend thousands of dollars to get in the game and leverage yourself to
the hilt. If you wanted to invest in commercial real estate that wasn’t
even an option, as it’s one of the most expensive assets on the planet.
With fractional real estate through blockchain technology It doesn’t
matter what your income or social status is, you could be a single
parent, college student, recent college grad, or starting your 1st
career, if you have roughly $1,000 in ETH value you can have the
opportunity to invest in fractional real estate abroad and enjoy the
benefits of income producing properties as well as capital appreciation.
9. Prevent fraud & human error
Millions of dollars are lost every year due to real estate fraud. And
although it’s not common to experience real estate fraud, when it does
happen it can bring down the house. A quick google search of real estate
fraud or scams will give you a good sense for how much irreparable
damage it can cause. Blockchain creates an immutable digital ledger that
prevents fraud from happening in the first place. All transactions and
records of the property are time stamped in the token preventing anyone
from changing the facts. Changes and updates on the blockchain can only
be accomplished by consensus between participants and new data can’t be
erased. 10. Transparency
Anyone that follows politics can understand and appreciate transparency,
after all it keeps us honest, and it creates more trust; which
ultimately benefits the economy as a whole. Stephen M. R. Covey wrote an
entire book called “The Speed of Trust” where he makes the case for
building trust as a means running a more productive and profitable
business. The fact is that lack of trust creates friction, and friction
slows transactions and delays productivity. Real estate tokens provide
visibility into a digital ledger where all pertinent information is
stored including income generated by the property.
THE GREAT TEAM
Our Team Has More Than 100 Years of Real Estate Investment Experience
and Our Team of Blockchain Programs are Some of the Best in the World.
