PROPERTYSPARK ARTICLE

 

Blockchain Real Estate | How To & Applications

 

How Crypto Will Shape The Future Of Real Estate

 

Author: Nate Tauferner

I hope everyone has heard of it as of now, especially since some high profile figures like Elon Musk have been dropping those words. But, are they just words? Or do they actually affect other things in the world? Today we are going to be talking about the way bitcoin and blockchain can actually impact real estate. 

The first thing I want to talk about is something called fractional ownership. Instead of a single investor or a group of investors needing a large down payment to purchase some type of investment real estate property, it actually brings that ability to the masses in the way of tokenizing properties and being able to purchase fractional shares.

You really kind of want to think about it like crowdfunding, and a cool thing you can actually do. Mind you, your property has to be completely free and clear paid off, but you can tokenize your own property for other people to purchase fractional shares of it. Now, what does this do? Well, it gets you liquid cash, pretty dang quick, by just selling fractional shares of your property.

Side note: If someone purchases fractional shares of your property, that doesn’t mean they’re going to show up on your doorstep and move into your kitchen. It just means that, later down the line, whenever your property does sell, they will get paid a percentage of what that property is being sold for.

Second thing I want to talk about are smart contracts. Basically this is a specified part within a contract that, if it’s not met or it’s not correctly done, the contract will automatically terminate. This gives you peace of mind because buying real estate whether it’s your personal home or an investment property is a pretty big deal with a lot of money, and a lot of moving parts, but this makes sure that everything is double, triple, and quadruple checked. So it’s a pretty awesome application for blockchain within real estate.

Third, let me actually ask you a question: The last time you purchased a property, you remember having to gather up a bunch of papers, financial statements, tax documents to give over to the lender and bank so they could verify and pre-approve you for the actual property? Well, with blockchain it makes that process a lot easier. 

If there’s a way to digitize a mortgage or loan, it can actually keep all of that data, so you don’t have to go looking around for it, and I’m talking about ownership history, payment history, credit, everything, and it can be available instantaneously. Makes it a lot easier for lenders and banks to give the go-ahead, especially in the market that we’re in right now, where it is crazy with multiple offers, and just trying to get a pre-approval can actually knock you out of that multiple offer situation pretty quick.

Last thing I want to mention is actually not purchasing a property directly. Here’s a bitcoin to purchase your property, it’s actually leveraging your cryptocurrency in the form of a loan. For example, there’s a service called nexo.io, where I could deposit some cryptocurrency and they would loan good funds for purchasing a property, dependent on how much I have deposited with them.

Think about it like a personal loan that you can get through a bank, but only with crypto. Now be aware to check the interest rates of the loans. I’m not saying they are low, and I’m not saying they’re astronomically high, but always do your due diligence to make sure that, whatever situation, or whatever route you’re going, that it fits your needs in your wants, and is not putting you in a bad situation.

Crypto and real estate together they’re a pretty new kind of situation to dive into, but the applications are pretty exciting, and we’re going to expect to see some awesome stuff in the upcoming years. Now I try and stay on the cutting edge of all of this. If you have any questions as far as using or different applications for crypto in real estate, you’re always free to reach out to me.

I’m Nate Tauferner, thank you so much for reading. We’ll catch you on the next one.

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