How Bengaluru builders can harness the power of Real Estate Tokenization/ How fractional ownership can be a game-changer in the Bengaluru Real Estate Industry
The traditional Real Estate sector must innovate to survive the cut-throat competition in the market. Fractional ownership is a new concept that ensures accessibility and affordability in property investment for all.
It refers to the division of property (commercial, industrial, and residential) into tradable shares on a robust blockchain network. These tokens are typically launched on Binance Smart Chain (BSC), Cardano, Ethereum, Stellar, and TRON blockchain networks.
Furthermore, Blockchain technology can remove cumbersome paperwork. It will digitize all the deeds, land records, and mortgage documents by storing them securely on an immutable network. It will assist in other aspects like the collection of rent, due diligence, implementing marketing campaigns, leasing, and property management.
Investors need not spend several lakhs or crores to buy their dream home. Real Estate Tokenization helps retail investors to purchase lucrative crypto tokens representing real properties at just a few thousands of rupees. Interested homebuyers will receive huge returns when there is a rise in the price and trading volume of the tokens in the market.
Generally, interested homeowners will purchase tokens backed up by the value of Bitcoin (BTC) and Ethereum (ETH). The potential for appreciation in their investment value is high. This is because the global cryptocurrency industry has an enormous market capitalization of $1.42 trillion as per CoinMarketCap.
How will property developers benefit by adopting Real Estate Tokenization?
- Before selling their apartments and flats in the form of fractional ownership, developers can conduct Anti-Money Laundering (AML) and Know Your Customer (KYC) verification on all the investors. This boosts credibility as there is no chance of frauds or scams.
- They have full freedom to launch their own native crypto token. Real Estate developers can offer their valuable token for sale on secondary marketplaces. Investors can buy and sell a variety of properties by purchasing these precious tokens.
- Builders can track all their cash flow and investments using the distributed ledger on the blockchain network. They will get real-time data about their financial dealings.Hence, Real Estate tokenization will automate the sharing of information related to issuance and post-issuance. This will help property developers as they reduce operational costs by eliminating the intermediaries.
- Real estate developers will receive high liquidity as their crypto tokens are easily tradeable across any exchange or secondary market. Additionally, tokens can be utilized for conducting crowdfunding campaigns.Developers can raise huge amounts of money in emergency circumstances for launching new projects. Hence, there will not be any cash crunch if they are not able to sell many housing units.
Wrapping Up
The concept of Real Estate tokenization is quite new to the Indian market. But, it has been very successful in European regions, Hong Kong, Singapore, and the USA. However, property is the biggest asset class ($300 trillion) in the world (more than gold and stock markets). This makes it highly apt for implementing tokenization.
Property investors can invest in any commercial or residential unit according to their choice. They get advantages like the elimination of barriers to entry and greater transparency as every deal occurs in the open market. The prices of crypto tokens will fluctuate depending on the market conditions and the value of the specific real estate.
Housing units sold in the form of crypto tokens will be a big hit in Bengaluru. It will democratize property investment as everyone gets an equal opportunity to purchase lucrative tokens.
Besides that, landlords, promoters, and property developers can also easily list their tokens on crypto exchanges like Bitbns, CoinDCX, WazirX, and Unocoin.
Investors like Non-Resident Indians (NRIs) and Ultra High-Net-Worth Individuals can utilize fractional ownership and invest in multiple properties simultaneously.
Hence, builders should get ready for the future of Property Dealings by kickstarting the revolutionary mechanism of Real Estate Tokenization now.
