Initially, blockchain’s objectives were to offer exchange and authentic ownership of digital information without the need for intermediaries. Now, the same technology is providing people with a reliable method on recording transactions of physical assets such as real estate property and land.
In most parts of the world, outdated processes and technology support the real estate industry. A lot of countries still depend on paper records on registering property and land ownership. Documentations are poor and held by individuals that can quickly change the context of the claims and deeds. Merely verifying and transferring ownership is expensive, arduous, transparent and susceptible to fraud. Plus with all the legal, financial, and cultural barriers, people nowadays face a lot of challenges in investing in real estate.
Blockchain technology can be the next big thing in the real estate industry. A lot of people and business owners believe it can solve the problems posed by the trade. Nowadays, a lot of blockchain startups are discovering ways on how to use blockchain to help reform the business.
Let’s take a look at how blockchain can play a more significant role in the real estate industry.
1) Blockchain Provides a New Way to Invest in Real Estate
With blockchain, real estate investment can become more open to more people. A simple blockchain platform can enable property owners to register their properties and issue cryptocurrencies that represent property shares. As such, a person interested in investing can merely purchase these tokens and start gaining profits. The i-house is one such platform that has already begun revolutionizing the industry.
2) Intermediaries Cost Removal:
By utilizing the blockchain technology, people don’t have to pay for intermediaries. The platform manages everything. The best part is that the process is transparent. Any person can check the distributions for the proceeds of a particular sale or property rent among all the stakeholders. Users can even confirm their lease and real estate assets by merely using the platform.
3) Renters can have Incremental Ownership:
The traditional own/rent strategy changes with blockchain opening up opportunities to people. Owners can enjoy a steady rental income without the worries of rental fees, void periods and management costs. The renters can have a place of their own that they can decorate and improve knowing that it is theirs. Smart contracts can make this possible.
4) Delivers Trust:
Establishment of property ownership rights becomes possible with blockchain. It is especially beneficial for countries that do not have a centralized land registry. Furthermore, it can help prevent issues on fraud on real estate properties. The technology provides unambiguous property titles and asserts rights.
5) Provides Efficiency in Operations:
Blockchain platforms make verifying, time-stamping and allocating transactions automatically for each tenant with just the click of a mouse. With all the GPS in smartphones, tracking of property portfolios is now possible. The platform quickly records who was present in a place and can even let people in the right residences.
All in all, companies are now utilizing the blockchain technology in different life aspects. Who would’ve known that single digital currency can transform the whole world? It opens a lot of possibilities in various industries including real estate.