Blockchain technology is best known for being the magic behind cryptocurrency and Bitcoin. However, it doesn’t end there. In recent years we have seen more innovations using blockchain to revolutionize other industries, including real estate.
Recently, we saw a Florida home auctioned as NFT transforming the view of real estate and NFT. To help us understand what this means for the real estate sector and its future, The Amazon Group at CENTURY 21 Tenace Realty shares how blockchain technology is changing the industry.
They say the real estate market has evolved, especially with the adoption of blockchain technology. The world of property is changing fast, and things like NFTs, which were previously thought to be just for digital arts, are now dominating the real estate sector, says The Amazon Group.
Today, you can use NFTs as a way to sell fractional ownership or debt on the property. This means as a homeowner; you can sell part of your property to a large number of investors by issuing tokens that they will hold and receive a rental income for doing so.
According to The Amazon Group, this is a massive opportunity for both homeowners and investors, creating a win-win situation for all. They explain that as the value appreciates, the two parties can split profit upon sale while making the process of buying and selling easy. Unlike now, where there are many intermediaries involved, blockchain technology could potentially cut down on this number, and you will not be required to go through so many steps.
Another instrument that could be affected is mortgages, says The Amazon Group. With NFTs and cryptocurrency in play, they explain that the industry is looking at a future where you can make a loan by issuing NFTs backed by ownership of your property. One of the reasons many people are unable to buy a home is the high-interest rates on a mortgage. They note that NFTs have a higher return rate and appreciate in value. This will open the door for more opportunities for many people investing in real estate.
However, they note that the changes might have some disadvantages. Both NFT and crypto are relatively new markets and are complex and volatile, says The Amazon Group. While blockchain technology could offer a solution to unlocking capital in property, there are some unanswered questions that they believe are vital. The Amazon Group advises others in real estate to first understand blockchain technology so as to minimize the risks.