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Real Estate Crowdfunding

Updated: Jan 10

Tokenization is an advanced version of property ownership that is traditionally fractionalized.

Tokenizing ownership means that you can convert physical assets such as real estate into digital tokens; the people who will purchase the tokens will then own a part of the asset.

Tokenization can offer market access to individuals unable to invest in real estate since it is more affordable to invest in this way. Whenever you invest in a property that is tokenized, you receive returns weekly or monthly. The property is managed by a platform.

The Pros of Tokenized Ownership

1. Affordable Investment

Different benefits come with tokenized ownership, especially when investing in real estate. One of the main benefits is that there is no need to acquire the entire property; the amount you can invest in different properties various in this way you are spreading risk and real estate becomes more affordable.

2. Passive Income

One of the hurdles real estate investors face is that they have to renovate property after purchasing it. Ultimately, you end up with a small percentage of the rental income since you also need to hire a property manager.

An investor won’t have to deal with the physical property for tokenized ownership. The platform will handle the entire burden. You will receive your passive income without any hurdles.

3. Easier Equity Release

There are different platforms where property and art can be tokenized if you want to raise capital. You can release equity, purchase more property, and raise funds in a bid to grow your portfolio.

The Cons of Tokenized Ownership

Innovation has brought about tokenization in the form of NFT (Non-fungible tokens), and all this is possible through blockchain technology. Despite having advantages, tokenized ownership has the following disadvantages:

4. Smaller Tokens

The rental payments will be smaller compared to the traditional rental payments. There is a fee normally proportional to the initial investment, and it can’t be as large as the payout if you don’t have a huge amount of capital. You’ll expect such challenges when you venture into entrepreneurship.

5. Fewer Opportunities

If you’re interested in art tokenization, you should know that the market is saturated. In entrepreneurship, there is the need to avoid saturated markets. Fortunately, there are different markets you can choose from. Nonetheless, the property owners will be exploited because of market saturation.

Final Thoughts

Innovation has brought about major advancements in different sectors, including art and real estate. Currently, suppose you want to invest in the Amsterdam real estate sector. In that case, it is now easy since tokenization allows you to venture into the industry even with a small amount of capital.

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