Traditionally, real estate has been one of the best investments out there. And yet, its high cost is a huge barrier to entry. Tokenization could completely revolutionize real estate investment. Has anyone invested this way? Have you come across any articles that point out drawbacks I'm missing?It opens the door to the possibility of democratizing asset classes through blockchain technology and peer-to-peer investment, creating a highly liquid decentralized market for property investment that is open to all.
2 posts • Page 1 of 1
This Medium article offers one of the best overviews and summaries of real estate tokenization that I've come across. This statement is one of the most exciting aspects of blockchain technology that I've come across:
Yes, I've done some reading on real estate NFTs and it sounds like it could be the next big investment opportunity. Earlier this year, Forbes had an article about it and they addressed some of the challenges that need to be solved before it can really take root. Here's what they said about it:
Fortunately, it looks like they're working on a solution for these problems. It's only a matter of time before they've figured it out and we're all buying slices of $1 million Manhattan apartments, etc.The issues that crypto tokens face such as hacks to smart contracts or lost passwords/cryptographic keys (if you forget your private key to bitcoin when you don't use custody wallets like Coinbase or Abra, then you lose bitcoin forever). Potential rules for NFT transfers in real estate should consider locking the money but not the asset itself to avoid unclaimed property rights.
Crowdfunding via NFTs is one of the exciting use cases but it triggers the need of filing with SEC, so either secondary trading of NFT securities will become more user friendly or regulations will need to change before the fractional ownership via crypto becomes commonplace.