Real estate has always been one of the most highly demanded investments. Property as an asset class is historically shown to perform well, but the costs of getting started can be extremely high. As property prices continue to increase, the ability to invest in real estate becomes out of reach for many regular Americans. However, fractional real estate investment platforms can provide a solution for people seeking to get a leg up on the property ladder without the enormous initial investment. And now, Americans have the option of investing in fractional real estate through cryptocurrency.
What is fractional real estate investing?
Blockchain fractional real estate investments refer to the ownership and cost of a property divided into shares. Those shares are then sold to investors. Investors can earn revenue through rental income, capital gains when the property is sold, or income when they sell their shares.
The value of each share increases or decreases proportionately to the change in the property’s value. This type of investment may appear similar to other pooled property investments, like a property syndicate or a real estate investment trust. However, fractional investments are unique in their own ways. Unlike a REIT, fractional investment enables investors to select the property they want to invest in. The investor can create a portfolio of individual properties instead of purchasing shares from a group of pre-selected properties. Also, compared to property syndicates, fractional real estate investment provides liquidity; investors can cash out their investment at any given time by selling their shares. While property syndicates see capital gains on the property’s sale, fractional property investors can sell their shares whenever they wish to access their capital gains.
Can you buy fractional ownership real estate with cryptocurrency?
Can you use cryptocurrency to buy fractional real estate? The simple answer: yes! Blockchain benefits the entire process of transacting real estate tokens. There are now title insurance and escrow firms that deal in cryptocurrency instead of traditional currency.
Cryptocurrency does have its volatility. The cryptocurrency might increase in value and become more valuable or drop down to a value that is worth less than what you paid for it. Like any assets traded on the stock market, cryptocurrency’s value fluctuates daily. That said, when you purchase real estate with cryptocurrency, you trade a volatile asset for a more secure one. Moreover, real estate has been historically shown to appreciate in value with time.
It is absolutely possible to purchase a house with cryptocurrency, but keep in mind that not all property sellers will be on board with accepting a digital currency. We are fascinated by organizations like RealT, a secure platform that is specifically designed for buying and selling real estate using blockchain. Their platform is easy to navigate and offers an amazing selection of properties for you to choose from.
The days where investors only had the option to buy a property in its whole amount, with a down payment and mortgage upfront, are over. Investing in real estate is more accessible than ever to the average person thanks to cryptocurrency and fractional real estate investing platforms like RealT.