With the proliferation of the crypto world and blockchains, the real estate market has found different uses to bring investments in this type of asset to more and more people basically anywhere in the world. In this sense, the "tokenization" of real estate increases its popularity every day due to its transparent way of dividing commercial or residential properties and the ease of managing and administering the operational and financial results among the owners.
Tokenization is done through a process where a property is fractionated or divided into units represented by digital "tokens" that in turn are based on a chain of blocks or blockchain (it can be in Ethereum, Cardano, Solana or any other that have the ability to establish smart contracts). Each token has a value proportional to the market value of the property in question and can be purchased and sold at any time by those interested in this type of asset. Depending on the type of property, the business model is defined (it can be for lease or sale) in what is known as a "white paper" and it will dictate the rules to be followed during the life of each project.
Access to retail investors: Traditionally, investors who wanted to invest in real estate necessarily had to have large amounts of capital in order to enter the real estate market. With tokenization, the investment amount is considerably reduced (currently there are platforms with tokens starting at 10,000 Mexican pesos), which democratizes access to the real estate market.
Greater Liquidity: Unlike traditional markets where selling a property involves a significant effort that takes time to materialize, tokenization allows you to buy and sell tokens in secondary markets, which provides greater liquidity to this type of investment and therefore reduces costs. high costs associated with real estate transactions.
Transparency and security: Blockchains guarantee the transparency and immutability of transactions. The records that generate the tokens are carried out in the selected blockchain which grants traceability and transparency to each movement, which provides confidence to all parties involved.
Being a new technology, it is important to assess all the risks before investing in a tokenized real estate asset. It is important to consult with experts in the field (from the legal, fiscal and financial point of view) the implications of carrying out these investments since in each country the regulations may be different. However, we can be sure that blockchain technology is here to stay and these transactions will be our daily bread for years to come.
