Blockchain technology is a veritable Swiss army knife of innovation. In addition to powering the cryptocurrency that bears its name, blockchain is being applied in a number of different sectors, and there are few industries it has not touched yet.
One such industry that blockchain could potentially transform or revolutionize, depending on how you look at it, is the real estate market. Blockchain’s decentralized processing and immutable ledger provide solutions to many problems encountered by landlords, from fraud to property taxes.
The property market as a whole is rife with inefficiencies and problems, especially in developing markets. Many people are unable to own their homes or properties outright due to the prohibitive costs involved.
Records are not always up to date on the land registry, and relevant taxes can be almost impossible to enforce. Blockchain technology brings with it a potential resolution of all these issues, providing solutions that are transparent, efficient, and convenient.
Land title fraud and issues with the land registry are major problems in many countries. Blockchain offers a solution that can provide an immutable record of land ownership, which could be easily accessed by the public and other relevant parties, including governments and law enforcement agencies.
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The records on a blockchain would be accurate and up to date because they are verified by multiple different users on the decentralized network. For example, let’s look at property using blockchain technology. Want to know more about the bitcoin revolution? BitcoinPrime is here for you!
Platforms and Marketplaces:
When you purchase a house using blockchain technology, it will be recorded on a public ledger. This would make it much easier to track ownership, who has been living in the house, and where. This would also provide a convenient way to share the property with others who need to use it.
When renting out the house, you could easily establish trust between tenants and landlords through automated transactions (purchases via smart contracts) that are completely transparent to everyone.
Also, because the property is recorded on a public ledger and governed by smart contracts, there would be no way to sell the property without the buyer’s consent. Every time you rent out your house on a blockchain-based platform, accurate records of all transactions would be automatically updated.
By implementing blockchain technology, you cut out the middleman. In this case, the middleman is the website that provides the platform for renting your property. In a blockchain scenario, you and the person who rents your property will be able to connect directly and agree on terms without needing to pay any fees or commissions.
Blockchain-based property is much more liquid than conventional property. You are able to sell your property very easily on the blockchain because of the accuracy and immutability of the records. To illustrate, let’s look at a real-life example.
In Hong Kong, less than one percent of residential properties are sold on an exchange. This means that the vast majority of people who sell their homes do so in an informal manner where parties meet for a face-to-face transaction in order to finalize matters.
When you sell your property on the blockchain, this phenomenon is almost impossible.
The above features are only a few of the possibilities that blockchain offers. The technology could be used to create liquid markets for fractional ownership of properties.
When you sell your property, there is more money on the table in terms of capital gains tax if you have sold it to multiple owners rather than just one.
This would also give you higher returns when renting out your property since this would mean that you have more people paying rent.
Another potential feature that blockchain could enable is decentralized real-estate investing. Today, real estate funds are governed by a centralized entity that decides how the money is invested and how profits are distributed.
With blockchain technology, you could create a peer-to-peer network where everyone invests in the fund independently with their own profit and loss sharing scheme in place.
Another benefit of centralized property management is that it is quite expensive. If you’re managing your own properties, you have to worry about fees to pay the service provider, fees to pay your agent, and the various parties involved in selling or buying properties.
Moreover, if you are doing everything yourself, it is also more time-consuming and labor-intensive than it could be with a platform like this which uses smart contracts and blockchain technology.
Blockchain technology has always been a disruptive force. In the traditional property market, it could drastically transform the way in which we invest and manage our assets.
Organizations like Crypto Facilities are testing their potential when it comes to real estate and is harnessing cutting-edge technologies to create an efficient marketplace for high-quality securities on a blockchain platform.
Blockchain technology has a wide range of applications, and the real estate industry is no exception. From real estate agents to sellers and buyers, everyone who is involved in a real estate transaction could potentially benefit from blockchain technology.