Tokenized real estate has been gaining traction in the US market over the last few years as the surge in tokenization and blockchain technology has revolutionized the way businesses operate. Tokenized real estate offers a host of advantages to both buyers and sellers, including more efficient and secure transactions, transparency, and the ability to fractionalize ownership of real estate assets.
How real estate tokenization works
Tokenization involves taking a physical asset, like real estate, and digitizing it on the blockchain. We can break this process down into three steps:
1) breaking up an asset into tokenized shares;
2) creating digital tokens that represent the shares;
3) putting those tokens on a blockchain, thus creating a digital ledger. Investors can buy, sell, exchange, or collateralize the digitized asset.
Benefits of tokenized real estate
1. Tokenized real estate removes geographical and political boundaries, allowing investors worldwide to invest in real estate without traveling or being physically present.
2. Transparency–The blockchain system allows for greater transparency, providing buyers and sellers with a single source of truth that you cannot alter or manipulate.
3. Cost-Efficiency–Tokenizing real estate eliminates many costs associated with traditional transactions, such as legal fees and paperwork processing fees.
4. Liquidity–Unlike traditional investments, tokenized real estate can sell quickly and exchanged on the open market, creating liquidity that was previously unavailable to investors in physical properties.
5. Fractionalization–Tokenized real estate allows buyers to purchase a fraction of a property, making it easier for investors of all sizes to get involved.
6. Security–The blockchain system is secure and encrypted, providing a layer of protection against fraud and theft that traditional investments lack.
7. Automation–You can automate transactions using smart contracts on the blockchain, eliminating the need for lengthy paperwork processes and allowing for near-instantaneous settlements.
Considerations in choosing companies selling tokenized real estate
1. Regulation: Ensure that the company complies with the applicable local laws and regulations. This will ensure that your investment is secure and that it protects you from potential legal risks.
2. Security: Check whether the company has taken steps to protect investors’ funds, such as implementing two-factor authentication or using cold storage wallets.
3. Fees: Make sure that the company’s fees are reasonable and transparent before investing in their tokenized real estate investments.
4. Liquidity: Investigate how liquid an asset is so you know what type of return on investment you can expect.
5. Reputation: Research online reviews or ask other investors about their experiences with a particular tokenized real estate company.
6. Technology: Evaluate the technology that the company is using to ensure that it’s reliable and efficient.
7. Team: Investigate the team behind a project and check their credentials, experience, and track record in order to judge the quality of their work.
Companies selling tokenized real estate in the US market
There are several companies that have offered tokenized real estate in the US. Some prominent examples include:
Roofstock
Founded in 2015, Roofstock is a San Francisco-based real estate investment marketplace with a mission to make real estate investing radically accessible, cost-effective, and simple.
Led by an impressive team of lawyers, crypto enthusiasts, and graduates from the Wharton School’s Cypher Accelerator program, it has come a long way since its inception. Today, the platform has made significant leaps forward by introducing a tokenization model that provides even greater accessibility.
Already the platform has seen splendid success, with $5 billion in transactions since its launch. This puts Roofstock in a prime position to become the world’s leading real estate investment marketplace.
HoneyBricks
HoneyBricks offers investors a unique opportunity to gain exposure to the commercial real estate market in a new and exciting way. Through its platform, it allows investors to tokenize investments in approved projects, thus providing fractional ownership of assets backed by the Ethereum blockchain.
With its team of experts in diverse industries such as crypto, capital markets, and compliance, HoneyBricks is an ideal option for people interested in diversifying their real estate portfolios who want to move away from residential investment. HoneyBricks manages all investments with transparency and accuracy, so investors can feel secure about their contributions.
Arrived
Arrived is out to revolutionize the way we invest in rental homes and vacation rentals. Founded by Ryan Frazier, the company seeks to make wealth-building through real estate more accessible to its streamlined and intuitive platform.
Not only does the platform simplify the process and lower the cost of investing in these assets, but it also offers a unique browsing feature with pre-set filters like “appreciation focused” or “newly built”, making it easy for users to find exactly what they are looking for. Whether you are a first-time buyer or an experienced investor, Arrived puts you in control of your purchasing decisions and introduces new possibilities for building wealth.
SolidBlock
In 2018, a team of investors developed SolidBlock to end the limitation in accessing real estate investment opportunities. Their goal is to make the sector more accessible, liquid, and clear to give everyone an opportunity to invest in real estate.
To help achieve this goal, they also focus on educating their partners and clients on tokenizing assets and transitioning into a digital technology-driven environment. SolidBlock has shown strong progress since its infancy, allowing anyone with the goal of investing in real estate asset access previously inaccessible to them because of its private nature. This paved the way for greater financial inclusion, where even the smallest investor now has access to better deal terms usually reserved for sophisticated investors.
RealT
RealT is a revolutionary company founded by real estate and blockchain experts besides a strong team of marketing, e-commerce, and technology professionals.
The goal of this venture is to transform the way businesses in the real estate industry by introducing tokenized real estate ownership. With a minimum investment requirement of $50, it is one of the top choices for those who are looking to invest in the property market with affordable ease.
RealT’s mission to develop traditional property markets through innovation truly makes it stand out as an industry leader seeking to change the future of investments.
Republic
Republic is revolutionizing the investment industry with its unique platform. By providing customers access to private markets such as real estate, gaming and crypto, investors no longer need to be restricted by traditional public market investments.
With no platform fees and flexible minimum investment requirements, the Republic presents an accessible way for investors ages 18 and up to diversify their portfolios. In real estate investments, the Republic goes a step further by putting in place a rigorous vetting process. This ensures that every option on the platform meets customer expectations as far as risk level and interests are concerned. If you’re interested in investing in private markets but don’t want to worry about being taken advantage of, the Republic is a great option for you!
Vairt
Cincinnati-based Vairt is revolutionizing the way people can supplement their income by investing in real estate. Using its proprietary platform, users have all the resources and guidance they need to make informed decisions while creating their real estate network.
The support includes market overviews, neighborhood insights, and thorough property analysis to evaluate any fractional investment. Plus, Vairt implemented the use of blockchain technology to guarantee the utmost safety when making transactions and managing your portfolio. Discover how simple it can be to maximize your financial future with Vairt today!
RealBlocks
RealBlocks helps revolutionize the real estate investment industry by using blockchain technology to allow investors to purchase fractions of assets instead of entire portfolios.
Based in New York, RealBlocks eliminates fees associated with traditional investment models, streamlines processes, and provides more liquidity options than ever before. By applying tokenization through blockchain technology, RealBlocks opens up doors for investors worldwide so they can access more opportunities and make more informed decisions.
Owny
Based in Palo Alto, California, Owny has revolutionized the real estate investment game. It uses blockchain technology to facilitate investments in real-world assets and provides a host of features and services to make the process easier. Signing up is simple; users can create an account and get verified in less than a minute, freeing them up to focus on their investing efforts. Once they’ve started investing, they can track their progress using the dashboard. Owny’s innovative approach has caught Coinbase’s attention and resulted in the company becoming an investor in Owny.
Martelturnkey
Martelturnkey’s innovative investment model allows investors to generate a strong passive income by tokenizing a portfolio of rental properties in areas with promising economic indicators.
The company handles all the due diligence, purchase, and management of the assets, while investors benefit from spreading risk across multiple portfolios.
A minimum investment is required; however, this service is only available to accredited investors. It gives non-accredited investors access to potentially lucrative returns that would be hard to find elsewhere. With this unique combination of experienced property experts and efficient use of innovative technology, investing in tokenized rental properties has never been easier or more attractive.
Redswan
Redswan is a marketplace that allows both US and non-US investors who meet the accredited investor’s requirements to invest in institutional quality real estate like multifamily, office, and hospitality property.
With a minimum investment of $1000-$10000 per project, Redswan not only offers individual investors the chance to own a slice of commercial properties but also helps property owners to tokenize their equity for secondary market transactions like sale or lease.
Furthermore, Redswan facilitates the creation of funds that help investors who are more interested in diversification and passive management of their investments instead of analyzing individual projects on its platform.
When investing with Redswan, they disburse income quarterly or annually in a one-year holding period. Redswan provides small investors with valuable opportunities for wealth generation through secure investments in real estate projects.
Harbor
Harbor is leading the blockchain real estate compliance space—as a platform headquartered in San Francisco, it specializes in the technical details of dealing with private securities and also provides tokenization services for various assets such as funds, real estate, and private REITs. As they aim to improve liquidity and transparency while managing complex investments, investors can leverage their flagship Digital Subscription Platform, Investor Portal and Dividends feature, or Marketplace as a Service to facilitate the process. This comprehensive suite of solutions allows for a more holistic alternative investment experience.
Conclusion
Blockchain technology is revolutionizing the real estate industry, making it easier than ever for investors to get in on profits. Through tokenization, companies like Owny, Martelturnkey, Redswan, and Harbor are bringing more accessible options to investors of all types, enabling them to make smarter decisions with their investments. With the right platform and research, investors can access the lucrative returns that real estate offers. So if you’re looking to make your money work for you and invest in real estate, now is a perfect time!
