What does real estate tokenization mean?

Highs and lows are common for any business. Currently, one of the industries that are going through a phase of disruption is the real estate industry because of the challenges involved with it. “Tokenization” is said to be the hope that can uplift the real estate business and remove the hurdles that exist along with it.

What is tokenization?

Real Estate Tokenization is the process of converting the ownership of your real estate assets into digital tokens that represents the value of a single property or shares of different properties. The tokens are sold to potential investors to maximize profits. And the tokens are backed by blockchain technology that protects and secures the asset information with a chain of blocks encrypted with cryptography.

What are the benefits of real estate tokenization? How does it reduce the challenges of the real estate industry?

Tokenization removes almost every major challenge involved with the real estate business by providing the following benefits,

➼ High-volume liquidity
➼ High-programmability
➼ Elimination of third parties
➼ Dividend shares
➼ Fractional ownership
➼ Immutability
➼ Low costs transactions and elimination of transaction fees
➼ Easy access
➼ Cross border transactions
➼ Transparency

The above mentioned are the most significant advantages you obtain from tokenizing your real estate, which ensures a quick, smooth, secure business process and enhances your business among investors. Tokenization also breaks the barrier of geographical restrictions and allows global transactions, thereby gaining huge profits. Let’s see below, what are the essential components to be included to create a legitimate and immune tokenized real estate asset.

Essential components for a tokenized real estate:

⇝ Decentralization
⇝ Automated Legal compliance
⇝ Multi-currency and multi-language support
⇝ Automated, Globalised KYC/AML
⇝ Multi ledger asset token/ coin development
⇝ Blockchain technology integration
⇝ Smart contracts integration
⇝ Secured, multi-currency wallet
⇝ The ratio of tokenization- Dividing the shares according to the ratios
⇝ Automated investor verification
⇝ Automated reporting
⇝ Enhanced security integration

Related: End to End Asset Tokenization - The Emerging Trend in Investment Strategies

Evolution of real estate tokenization- A quick stat:

• Research says the global real estate market expanded from $7.4 trillion in the year 2016 to $8.5 trillion in the year 2017.
• Experts say the USA and Europe have already proven real estate tokenization feasibility in economic and technological aspects.
• Real estate tokenization business is said to have been huge in Asian countries and has been the biggest global market over the recent past years.
• RBS and Barclays conducted a trial of property tokenization with blockchain technology included and the trial involved more than 40 participants. The trial was completed successfully, discovering huge benefits through tokenization by more secure, quick, efficient transactions.
• It is predicted that the demand for real estate tokenization will keep evolving enormously, and by the year 2025, the global real estate market will attract $4.2 trillion in revenues, through tokenization.

Final thoughts:

Thus, the scope for real estate tokenization keeps evolving with each passing day. If you are looking to tokenize your real estate assets and gain huge potential for your business, you must choose a legitimate platform. Conduct extensive research, get in touch with market experts for reliable solutions. The best choice is to choose a well recognized real estate tokenization company, who will offer robust and a feature-rich platform with cutting edge blockchain technology for tokenizing real estate assets. This will ensure a more secure, quick, and efficient real estate business, attracting global customers. So, reach out, tokenize your property real quick and at cost-effective prices, become a real estate pro!