Guest Post was written by Sean Mortberg, an aspiring tech writer and a student at the University of Louisville in Louisville, Kentucky.
According to a survey, 71% of Americans wish real estate investment was easier and 48% of Americans would be more likely to invest in the real estate market if the technology was available to make it easier. Through crowdfunding and tokenization, the technology is changing real estate investment, too. While the industry is mainly in the hands of larger firms, the merging of cryptocurrency and real estate is opening the door to more people than ever before.
Cryptographic technology can determine which properties will profit the most from fix-and-flips, store MLS property records safely, and make real estate investment a passive, hands-off process. In the tokenization process, a home acquired by a real estate firm will be split into shares. Those shares are put on proof-of-asset tokens with an equivalent value on the blockchain. After the house is fixed and flipped, investors rake in profit without the need for a lawyer or physical paperwork, while buyers receive deeds in the form of a private key.
For investors looking to diversify their portfolio, the tokenization of properties offers lucrative benefits. Investors don’t have to buy whole properties, opening the door to a more financially diverse investor base. They can buy shares in as many properties as they want through fractional ownership and democratization. Transactions are published on the distributed ledger and decentralized to keep records safe from tampering. It’s the first time a cryptocurrency has been backed by the largest asset class in the world.
With fix-and-flips at a ten-year high and ICOs entering real estate, it’s important to see how technologies like cryptocurrency will change the game for the better. Giving greater access to the world’s largest asset class to a larger group of people will help keep investments in this space moving forward. Learn more about real estate on the blockchain with the infographic below, provided by Property Coin.