One of the concepts that have long dominated alternative financial networks is the development of a passive income, or an income that you do not have to actively work to generate. Digital nomads and money gurus have spent years repeating the same mantra – secure the bag by securing a passive income. This, of course, begs the question: how do I create a passive income stream?
The traditional method is through buying commercial or residential real estate and collecting rents. Real estate investment has been regarded as THE path to wealth creation basically since the advent of civilization, but it has been limited to those with capital to invest (or a capacity for violence). However, thanks to the innovative concept of tokenized real estate, the doors to passive income and the accumulation of wealth through investing are opening wider.
Tokenized real estate investing represents a significant step towards democratizing the real estate market. The process of tokenization (dividing the value of a property into equal fractions represented by a digital token) is carried out by the DeFi company RealT, which has bought real-life investment properties and sells their tokens on its proprietary exchange.
By splitting each property into a number of smaller chunks of ownership, individuals can now invest in real estate with more accessible entry points. This inclusive approach eliminates the need for substantial upfront capital, opening doors to a wider pool of potential investors. It also provides a safe haven for crypto investors who are looking to shield their wealth from a tumultuous market, since the token’s value is tied to the property rather than the crypto used to buy and sell it.
As if providing a value hedge wasn’t enough, tokenized real estate also generates value rather than just retaining it. RealT’s unique monthly rent-sharing system is a game-changer for investors seeking passive income streams. The platform collects rental income from tenants occupying the properties associated with the tokens. This income is then divided among token holders based on their ownership stakes.
Through the power of smart contracts, which are coded into the blockchain supporting the token exchange, RealT ensures an accurate and transparent distribution of rental income. The platform calculates each token holder’s share by dividing the rental income by the total number of tokens representing the property’s value. Consequently, investors can enjoy a consistent and reliable income stream proportional to their ownership.
Through the power of smart contracts, RealT ensures a fair and transparent distribution of rental income, making sure investors get their fair share of each month’s rent based on the number of a property’s tokens they hold. This means crypto investors get a powerful passive income-generating tool that lets them create their own digital nomad lifestyle rather than just living vicariously through online influencers.
Tokenized real estate comes with a number of benefits over traditional real estate investing beyond the lowered price point. The exchange allows for extremely quick buying and selling, which means investors with commitment issues have access to a level of liquidity that would be completely unavailable through traditional real estate investments.
All in all, RealT’s platform providing access to tokenized real estate investment provides a variety of ways for investors to benefit – whether it be gaining access to the real estate market at all, the acquisition of passive income, or the ability to quickly exit and enter the RE market based on other asset market conditions. If you’re interested in learning more about blockchain real estate investment, get in contact with the fine crew at RealT.