Real estate democratization
We all know real estate investments aren’t for everyone, primarily because of the industry’s high entry barriers. For example, according to MiamiRealtors, the median price of apartments in Miami is $390,000, with homes already over $550,000.
We all know the benefits of investing in this market, including stability, protection against foreign exchange risk, long-term appreciation and returns protected against inflation. However, the fact remains that only a few have enough capital to get into the industry.
Real estate democratization removes all those barriers for investors across the globe and allows them to invest in fractional properties in the United States. This is where the real estate market, Blockchain and Security Tokens meet. By buying them, you will own a percentage of the property they represent. And with BRET Real Estate Tokenization, you can invest from only $100!
You will also be able to liquidate your investment much faster than the traditional way since you do not need intermediaries, paperwork, or other processes that transform it into a long and inefficient transaction. Instead, all you have to do is offer your token on a secondary market and wait for another investor anywhere on the planet to buy it.
Real estate decentralization
Blockchain transforms all information into encrypted and protected data in the real estate market. Furthermore, Blockchain will store all data on a platform that prevents its manipulation or modification.
Decentralization allows buyers and sellers anywhere in the world to make transactions with their security tokens without being intermediated by a central authority. They don’t need a third party, such as a bank or a government entity, to negotiate, but they can do it directly.
Since US real property backs our security tokens, they represent a fraction of it. Therefore, they work as digital shares, and owners can trade them in the blockchain ecosystem.
Just like traditional securities, security tokens are regulated by the SEC (Securities and Exchange Commission). The United States Congress created the securities act during the Great Depression to prevent fraud in this market. This act requires that this entity regulate all securities traded in this country.
ADVANTAGES OF REAL ESTATE TOKENIZATION
Let’s talk about how to invest in the real estate market. There are two ways to invest in the real estate market: buying a title, which makes you the owner of the entire property, or purchasing a share. Investors can do either through REITs, investment funds or security tokens.
Blockchain and security tokens allow digital ownership transfer of assets and automatically send dividends in seconds. In addition, asset management is easier since you do not have to worry about tax payments, property damage, or any other inconvenience. Usually, the entity that issues the tokens is in charge of property management.
Investment through security tokens backed by properties in the United States has a lot of benefits, such as allowing foreigners to invest in this market without the need to have a US visa, companies or a bank account in this country. In addition, it will enable you to invest with just $100, have personal custody of the asset and generate liquidity in the investment since it is a digital process which makes it more efficient. In this blog, we better explain the advantages of investing through this alternative.
In addition, investing through security tokens is excellent for people who want to enter the real estate industry. However, it is also for people who want to get out of it. For example, suppose the owner of the property decides to tokenize it. In that case, he will be able to finalize the sale in less time, paying fewer transaction costs since the brokerage commission is lower and won’t require so many intermediaries, paperwork or delays in the process.
If you want to know more about the tokenization process, go to our website and contact us today for personalized advice!