Technological revolutions succeed each other at a speed that scares even experts. If we have barely begun to understand what the metaverse is and we are facing a great business opportunity, which is real estate tokenization .
We are facing a business model that can revitalize the civil construction and real estate markets, which are thermometers of the economy, showing warming or recession according to their numbers.
In Brazil, home ownership is the biggest dream of Brazilians , there is a great repressed and tight demand between economic crisis, official real estate credit with too many rules and bureaucracy and private real estate financing with high interest rates.
As an investment, properties have always been safe, for future use or rent, but they progressively lose liquidity due to the scenario we showed above.
As we can see, there is a large growth space that looks for alternatives, but how can blockchain technology with tokens and smart contracts become an alternative to reheat the real estate market?
How can turning real estate into tokens attract more customers and investors? Let’s talk about tokens in the real estate market and the possibilities they provide!
HOW DOES PROPERTY TOKENIZATION WORK?
- The process of tokenizing a property begins with analysis and joint approval between the interested party – which can be a company or individual – and the tokenizing company ;
- An encrypted file will be created – the token – that will represent the main characteristics of the property. This token will be divided into as many parts as are interesting to offer the asset and increase the attractiveness for investors with different levels of capital.
- In addition, smart contracts are also created – electronic contracts, also in the form of tokens and encrypted , where all the conditions that are laid out in physical contracts will be.
- All these elements are stored, offered and traded through the blockchain defined with the tokenizer , which also governs the process;
- All transactions are electronically controlled, as the block network and all blockchain computers must attest to the integrity of the issuer and the buyer. Everything is done electronically and guarantees security and transparency;
- At the end of the deadline defined for raising funds with the tokenization project , the blockchain executes smart contracts to deliver to each buyer the tokens of the fractions he has acquired and deliver the capital earned to the token issuer.
Want to know more in our article about the tokenization process and benefits?
WHAT CHALLENGES DOES PROPERTY TOKENIZATION HELP YOU OVERCOME?
REDUCE SECTOR BUREAUCRACY
Undoubtedly, the excessive bureaucracy in the real estate sector is the biggest obstacle to growth and the debureaucratization is slow (and for many, uninteresting).
Real estate tokenization helps to solve, as all document certification can be taken to the blockchain, optimizing three essential factors:
- Integrity: with digital files – tokens and contracts – encrypted and immutable for each closed transaction;
- Security: Blockchain is immune to cyber attacks and fraud;
- Time: eliminating physical bureaucratic processes and actors that lengthen deadlines and costs.
With this, it is easier to break the bureaucratization barrier that keeps away those who want to buy or invest in the real estate market .
It is true that real estate tokens cannot escape a part of government regulation – land use rules, municipal requirements and aspects that concern the physical aspect of the property.
However, blockchain technology makes the road to real estate much better.
AVOID LOW LIQUIDITY
Real estate liquidity reaches low levels for known and combined reasons:
- Crises in the economy putting a brake on purchasing power;
- An almost prohibitive installment plan for the majority of the population;
- Investment bubbles in real estate construction and delivery generating excess supply without expected demand.
The fractionation of a property allows you to negotiate several parts of it, reducing the amount that each person invests for each one. The attractiveness is not restricted to those who buy to live or for large and medium investors.
People with smaller savings can own a percentage of an apartment worth 20 thousand reais when the whole property costs 1 million.
This property tokenization advantage increases and accelerates demand, reducing fundraising time.
REVITALIZE THE REAL ESTATE MARKET
Here comes another advantage of offering real estate with tokens ; by negotiating small parts, the democratization of access to goods increases demand and reheats the market. This will cause more visibility and credibility, in a virtuous and extremely dynamic cycle.
WHAT ARE THE POSSIBILITIES OF EARNING WITH PROPERTY TOKENIZATION?
See some ways to increase the value of invested capital that, for example, a land tokenized in 1000 shares can provide.
- Buy to rent and earn from the lease revenue and property appreciation;
- Investing as an opportunity to resell at a higher future value, making a profit;
- Build houses or condominium buildings, profiting from the sale or rental of the units;
It is important to remember that the gains are per token (quota), which reinforces the idea that more people can benefit and not just an economic group.
TOKENIZE PROPERTIES PARTIALLY
The potential of real estate tokenization is not just in future trades and use of entire real estate; it is possible to generate tokens of physical fractions within real estate.
- Facades of buildings for advertising;
- Idle parking areas;
- Commercial spaces within residential or commercial condominiums.
It is possible, for example, to tokenize a gym to be exploited by third parties and earn rental revenue, which returns to each shareholder of the venture that owns the space.
We know that the possibilities shown here are common in the traditional market. However, they can be more efficient with tokenization by sharing gains (and risks) and capitalizing projects faster.
In addition, the relationship of blockchain with the dynamics of the sector is positive, as it combines high technology with the language of business and benefits the acceptance of real estate tokenization .
It is the union of day-to-day business with high technology , with more security and agility.
BLOCKBR Digital Assets is a fintech that combines technological innovation and digital knowledge to transform physical assets into digital ones, in the asset tokenization process.
The offer of tokenized physical and financial assets, both current and new, is democratic and decentralized, which makes investing safer, simpler and more efficient.
We enable, structure, issue and offer tokens on our platform and beyond. Be aware that tokens depend on feasibility and regulatory factors.
Do you want to tokenize your business or part of it? Do you have a business solution and does it make sense to issue your own token ?
Fill out our form and we will contact you.
BLOCKBR : digital assets driving results and dreams!
