The Future of Real Estate Investing
Real estate has always been considered one of the most evergreen avenues for investment. However, it cannot be denied that high-value real estate is out of reach for the most common investors because of the sheer magnitude of value. At the same time, they also represent lucrative investment opportunities that are well poised for great returns. This presents us with a situation, where the market has to arrive at a balance between making the asset liquid, but at the same time, not compromise on the value of the asset.
Blockchain and Tokenization – the Panacea
Today, blockchain is mostly used in context with the fourth industrial revolution. It is quite an epithet to be qualifying a technology because all of us know the paradigm shift that the industrial revolution introduced. What makes the new technology great is that it is equally employed both by big financial institutions like JP Morgan and technology companies like IBM and at the same time, used by small enterprises as well.
In most cases, Blockchain finds its relevance in agricultural supply chain management, food safety, foreign exchange transactions, immutable voting, health data, and land registry.
One of the greatest signs of technology becoming mainstream is when people start using it even without realizing that they are involved! The same can be said about mobile phone applications and mapping and navigation systems. With the increased adoption and manifestations, blockchain is at the brink of this breakthrough.
Investment through Digitisation
Digitization is the process of converting a real as it with tangible values into discrete elements that represent a part of the asset. These discrete elements are generally called tokens. They can also be represented as coins. One of the most common as it to be digitized is real estate. There have been records of over $1 billion raised through security token offerings (STO) and the number is expected to double in the next year.
The key to digitization is the token. It is to be understood that a token not only represents a part of the asset but is a breakthrough from a financial engineering point of view. It is embedded with data that includes the regulatory compliance requirements.
This fractionalized ownership method brings the advantages of new technology but at the same time, does not compromise on the security offered by the regulations of SEC and FINRA.
- In addition to making the investment availability more democratic, digitization also helps in making the investment portfolio global.
- It gives an extremely high liquidity to assets that were considered traditionally illiquid.
- In addition to that, the swiftness in the process also means that a lot of time-consuming activities can be made exceedingly simple.
- After all, blockchain is a digital ledger, and any process that depended on ledgers can be made more efficient with this new technology.
- It has made the process of buying and selling homes simpler by eliminating the need for mediators and the associated delay in the process.
- It has even managed to grab the attention of repeated stock markets like those of Malta, Gibraltar, and Australia.
There is no question that the future of financial transactions lies in technology, and it has led to the evolution of this new tab called fintech. One of the greatest factors that will lead to the boom of fintech in the future is blockchain. It will not be long before digital investing becomes the order of the day.