Blockchain technology has influenced many sectors and started to be widely used. One of these sectors is real estate investments. With smart contracts implemented on the blockchain platform, real estate assets are tokenized, used in the digital environment, and trading transactions are carried out.

Blockchain Technology and Real Estate

Blockchain technology provides a secure, decentralized way to transfer real estate assets and record ownership. Blockchain can shorten the time it takes to buy and sell and make it easier. Together with smart contracts, it automates many real estate transactions by eliminating third parties. In traditional property ownership, fraud and mistakes are often unavoidable. The blockchain ecosystem helps to prevent all these incidents, protecting bad scenarios and property ownership.

What Are the Advantages of Real Estate Investment?

Real estate investments have many advantages. We can list these advantages as follows: 

• No Intermediary
• Liquidity
• Fractional Property
• Decentralization
• Costs

No Intermediary

Transactions carried out in the real estate sector with Blockchain technology exclude intermediaries from the transaction process. By excluding intermediaries, the costs of transactions are reduced. Blockchain technology has also legalized the implementation of partial ownership of the real estate.

Transactions such as listing and payment can be carried out on real estate platforms. By excluding intermediaries in real estate transactions, commissions from buyers and sellers are automatically eliminated. As a result of cost savings in transactions, buyers and sellers are more likely to benefit from their assets. Excluding intermediaries is also beneficial in terms of faster execution of transactions.

Liquidity

Real estate is considered an illiquid asset. Real estate is easy to buy and sell. Sellers do not have to wait for a buyer who can buy the entire asset when they want to realize value from it.

Fractional Property

With Blockchain technology, barriers to real estate investments are eliminated. Blockchain technology allows fractional property transactions to take place. Blockchain technology acts as an intermediary for investors to acquire or sell fractional properties or entire properties. It also helps investors avoid transactions such as the maintenance or leasing of fractional properties.

Decentralization

The decentralized nature of blockchain technology promises users security and trust. With the transparency feature of blockchain, all nodes have access to the data, so that no changes can be made to the transactions carried out within the network. Transactions or information within the network can be verified by nodes.

Costs

Blockchain technology eliminates the need for intermediaries in the real estate sector. The elimination of the need for intermediaries results in the elimination of commission fees charged by intermediaries in transactions. Costly transaction fees such as registration fees, loan fees, and tax fees are also saved during the realization of real estate transactions.

What Is the Importance of Tokenization in Real Estate?

The main goal of investors is to protect their investments against inflation. The capital required for real estate is unaffordable for individual investors. Tokenization was created using blockchain technology to solve this problem. The low liquidity of real estate, the expectation of more transparency on transactions, the expectation of increasing efficiency, and the expectation of new capital channels have led to the realization of tokenization transactions.

Tokenization Increases Liquidity

To increase the value of an asset, the lack of liquidity needs to be solved. The liquidity problem in the real estate sector is increased by tokenization.

Tokenization Increases Transparency

The fact that real estate transactions can be audited with blockchain technology increases the transparency of transactions. In this way, investors do not feel the need to perform due diligence and can save time.

Tokenization Paves the Way for New Capital Channels

Investor access to real estate is increased through tokenization. The division of large-value properties into smaller values benefits investors' access to real estate and opens up new channel avenues for retail investors.

Tokenization Reduces Counterparty Risk

Smart contracts eliminate intermediaries in real estate investments. With the elimination of intermediaries, only peer-to-peer transactions are carried out. This significantly reduces counterparty risk.

Tokenization Increases Efficiency

The digitalization of investment processes and the elimination of intermediaries through smart contracts have contributed to investors feeling more comfortable. The absence of paperwork and the shortening of transaction processes have increased efficiency on platforms.

What Does Tokenizing Real Estate Mean?

Real estate tokenization is a financial transaction that breaks down the value of an investment into its component parts in order to overcome the obstacles that get in the way of investment transactions. Each asset of the real estate is converted into tokens. Each asset of the real estate is encrypted according to the percentage of shares. For instance, real estate worth 200 million can be divided into 200 tokens. The real estate can then be bought at its set value.

Real estate investments require unnecessary paperwork and the capital needed in the real estate sector may not be affordable for small investors. In order to increase interest in real estate, efforts have been made to change the illiquid asset status of real estate. An example of real estate tokenization is the division of a property into parts for multiple investors who share in the capital.

NFT and Real Estate

Non-fungible tokens are cryptographic tokens used to represent unique digital assets. NFTs are used to tokenize digital assets such as artworks, collectibles, and much more. NFTs are secured by blockchain technology.

NFT real estate is a plot of land that users can explore in the virtual world using three-dimensional avatars. Users can buy NFTs linked to specific land parcels to represent ownership of their property.

What Are Real Estate Use Cases in NFT?

• Advertisement
• Socializing
• Gaming

Advertisement

Brands can leverage virtual properties to advertise, offer a unique user experience or organize virtual product launches. Users can play games in the digital world or enjoy the digital world lifestyle.

Socializing

Some of the users use NFT properties for socializing. Real estate in the Metaverse provides a space for the user to connect with other users, play games on digitized properties and socialize.

Gaming

NFT real estate benefits NFT games. Players are provided with resources such as tokens and production items.

How Does Cryptocurrency Impacts Real Estate?

Cryptocurrency real estate affects the virtual and real world. Investors can buy land in the digital world. When you buy property early in the development of the metaverse, over time, the value of the property increases and can be sold for the increased value.

With cryptocurrency, a property can be bought by more than one person. This process means that fractional property is allowed. Fractional property is realized by tokenizing the property. Tokenization also increases the liquidity of the property. Cryptocurrency real estate helps investors in the market to increase their efficiency.

What Is MetaRealEstate?

MetaRealEstate is one of the ecosystem products offered by Metatime that enables users to transform traditional assets into digital assets in the real estate sector. With its borderless structure, MetaRealEstate enables real estate investment regardless of location and price, which is valid all over the world. MetaRealEstate allows the user to make real estate investments most efficiently regardless of the location.

The MetaRealEstate process consists of the sale of the digital asset, the creation of a special board for the digital asset sold, reviewing the income and expense information of the asset on the profile, and depositing the income of the asset into regular accounts.

Why MetaRealEstate?

The amortization period in the USA, when calculated independently of house price increases, is 300 months, or 25 years for a standard apartment. But the rental multiplier for a ground-up building or hotel is only 60 months or about 5 years. The amount required for residential investments starts at 3 million dollars. Real estate investment is limited to certain users and certain people in the supply-demand balance of the market. Again, since the average selling price of a hotel has an average starting price of 100 million dollars, much less of the limited user profile in residential real estate holds the supply-demand balance and benefits from its advantages.

Through MetaRealEstate, users can make investments with very high entry prices, such as hotel investments, in any amount they want. The digital shares received in return for the investment can be traded between users at any time on the hotel's board, just like a cryptocurrency. In addition to this board, where the price of the hotel is determined and the supply-demand balance is formed, shareholders can automatically transfer their share of all the income of the asset to their MetaWallet accounts according to the proportion they hold.

Thanks to MetaRealEstate, the needs of all users who want to invest in the real estate sector are met, enabling them to invest the desired amount in the most efficient investment models.