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- The rise of real estate tokenization as a trend shows how blockchain technology and real estate investing have come together.
- Tokenization allows investors unique access to private real estate investments as well as increased transparency, liquidity, and income for asset or fund owners.
- In this blog, we'll explain what tokenization is, how it works, and how owners and investors can profit.
- Describe the working of real estate tokenization
- Similar to the fundraising process, real estate tokenization divides an asset into manageable portions using a smart contract, an automated programme that runs on a blockchain.
- Any person who purchases or holds a token also owns a portion of the property. They are liable to both the underlying securities and the profits and losses that go along with it.
- In order to better understanding it, let's imagine that someone carries a $100,000 piece of property and quickly needs money.
- However, the investors who approach them lack the necessary funds, and the property owners are opposed to selling their property for a lower price.
- Tokenization is useful in situations like this. Each unit will represent $1,000 worth of digital tokens and their assets will be distributed.
- In this manner, investing in the asset over time is made simple. Due to the informal nature of the network used, everything here is totally upfront.
- A token for real estate potentially stand for any of the ability to follow:
- Having a shareholding in a part of real estate
- - complete real estate ownership
- - a percentage of the stock of a company that handles real estate
- - an ownership share in a loan that is real estate-backed, or
- - a chance to take part in real estate's revenue-sharing
- Read More: https://www.sdlccorp.com/post/real-estate-tokenisation
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