The ownership and sales of property were always something that was finalized by the court and the law of a country. But things are slowly changing; the old traditional ways are giving way to the new digital age technology evolution. Among these, blockchain technology is one such tech that is building its own ecosystem within the real estate industry. This provides ways to ownership, omits a lot of physical paperwork, and secures all customer data within their ecosystem.
But how does this new age tech, blockchain, concern you? Can it be used in everyday real estate, or is this tech too advanced for this industry? Simply put, blockchain offers a record-keeping and transaction system, which is very hard to tamper with. This leads to this tech being very secure. To date, the world has only popularly heard about blockchain being used in cryptocurrency. But crypto is not synonymous with blockchain; crypto is one of the things that were created with blockchain technology.
That is why statistics say that along with the rise of crypto, other blockchain usages will also rise simultaneously. Market research says the blockchain usage budgets of companies to find various business solutions will become $11.7 billion in 2022 and reach $19 billion by the end of 2024. This also includes the real estate industry. This tech is already mingling with this sector, and you should know these trends to understand what the future holds. Read on to find out.
Is blockchain benefitting the real estate industry?
From currencies to the demand and supply industry, none have escaped blockchain tech usage and its new-age developments. This technology has disrupted even the real estate industry and benefited it in many ways, including finding buyers and sellers a new medium to connect. Here are some of the other ways blockchain has changed and is benefitting the real estate industry.
Fractional ownership
In typical scenarios, most individual property units are always sold to one owner. But blockchain tech gives the opportunity for fractional ownership of real estate properties. When one or two investors do not have a large sum of money to get one property, they pool their money together for one property. They can buy or sell fractions of the property through their blockchain usage and their trading apps/websites.
When there is fractional ownership, then people do not have to pay for maintenance and upkeep all alone from their own pockets; the shares get divided as per the ownership ratio.
Liquidity
Real estate is generally considered a non-liquid asset that takes a lot of time to process transactions and get the money rolling. So real estate investments need time to convert into real cash, making some investors wary of investing. But with the advent of blockchain tech, things are changing; even if sellers can not find one right buyer, they can quickly sell parts of it to multiple buyers and earn quick cash.
In theory, cryptocurrency can be converted to fiat currency at any point in time, and hence dealing in crypto to get real estate sellers can speed up sales.
Decentralized data management system - low chance of fraud
Blockchain uses a decentralized data system to store data which is set on a public ledger. The data is accessible to all peers, which increases the transparency and credibility of the data. This information can be verified at any time before the transaction goes through. This reduces the number of fraud attempts and also helps increase the level of trust between sellers and buyers.
Why do you need this tech in your property management plans and head into the future with security? Market research found that cyber security fraud in the real estate industry amounts were more than $350 million in 2021, whereas it was only $231 million in 2020.
Where can real estate use blockchain?
Though many of blockchain's uses in real estate are yet to be explored, some of the top uses are listed below.
Asset management
With the use of blockchain, all real estate assets can be tokenized, and all information about them is stored in the public ledger. These digital assets can include ownership rights and a series of unlocking procedures to ensure an ultimate level of security.
Digital real estate assets can be customized as per customer needs and demands. Unlike physical asset distribution, where the transfer of assets/properties can be a real taxing process. As a real estate owner, you can keep track of all these assets and their transactions and owner details through any blockchain user dashboard you use.
Property management
Sharing information and conducting business from one location can become a hassle when your real estate business goes national or even global. This is where blockchain tech can become really helpful. Data sharing and storage are very secure with this tech, and national or international borders are no barriers to it. This also helps generate much better quality data and helps in better decision-making for sales and business growth.
Investor and tenant identity
Identity theft in the real estate industry is much higher than you would imagine. Identity Theft Resource Center (ITRC) says there were more than 1,862 identity theft cases in the first quarter of 2022 in the US alone. Blockchain can provide a much safer and more secure solution for personal identity data storage and makes sharing much easier for all real estate customers.
Are You Looking to Use Blockchain Tech in Your Business Too?
Yes, the usage of blockchain is not foolproof in the real estate industry, and its true potentials are yet to be discovered, but the tech is here and is already making its mark. Though this might not directly affect your real estate business at the moment, it will surely cause changes in the near future. This tech is here to stay and grow, no matter what the industry.
Do you want to know more about such tech trends and how they reshape the real estate industry? Do you want to get a deeper understanding of how they can negatively or positively impact your business? Get in touch with our team of tech experts at Assetsoft to know all about the latest tech developments in the real estate world.
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