Tokenizing real estate is done through a “smart contract”, and with it a value is given to a token, in correspondence to the asset or to a part of it. According to Eric Sanchez, CEO of the business RentalT, this method is the real estate market’s future., since it makes it possible so that any person, anywhere, can invest in profitable products and cash.
“In this case, tokenizing brings a democratization to investing, on of the principal objectives of the project, along with improving other inefficiencies,” Sanchez clarified. His business, RentalT, works on the Ethereum network, and is now on the Binance Smart Chain network, also.
Advantages of Tokenizing real estate
A token obtains the value of the tokenized property and represents it on the blockchain. This token can be transferred quickly and at a low cost, from any part of the world, with restrictions. Not only can it be sold, but it can also be divided and converted into cash through DeFi tools; plus, it can also be used as security when requesting a loan.
As happens with all operations on the blockchain, there’s no way to alter the process, so it’s possible to prove who is the titleholder of each token. The owner of this token not only “has his participation digitally represented in his wallet, but can also receive his monthly dividends there, and can operate with his token the most convenient way for him. This solves one of the principal problems of real estate investment, which is none other than lacking liquidity and being trapped inside the investment,” assured Sanchez.
How do you liquidate a token for cash?
To sell a token, the titleholder has two options: selling directly to another investor or to put it in a cash pool, like the one offered by RentalT. This pool allows that investor invest, from the convenience of his mobile device or computer, to sell his token at the market price, without the need of having a buyer.
Tokenizing real estate is much more flexible than real estate property. With it, the investor can keep various properties separated, in one portfolio, where he can choose the display he wants for each of them.
Any investor who works with cryptocurrencies and is looking for a good profit, with a controlled risk, can use real estate tokenization. However, in RentalT, Sanchez reassures, they are working so that any person can use their savings to easily invest without having a lot of knowledge about the cryptocurrency world and blockchains.
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