Tokenization of real estate has undoubtedly revolutionized the way properties are perceived, managed, and traded.
Whether by significantly reducing barriers to entry for investors or increasing market liquidity, this innovation offers unprecedented flexibility, transparency, and accessibility to investors looking to enter the real estate sector.
In this article, we provide a detailed comparison of the most popular real estate tokenization solutions.
What is real estate tokenization?
Real estate tokenization is a process that involves converting ownership rights or shares of a real estate property into digital tokens on a blockchain. In other words, these tokens represent a fractional part of the property and can be bought, sold, or exchanged more easily on platforms.
Tokenization relies on blockchain technology, known for its infallibility, transparency, and ability to facilitate intermediary-free transactions. Each token is unique and incorporates essential information about the ownership stake it represents, such as rights, location, price, and obligations of token holders.
Here are some advantages offered by real estate tokenization:
- Accessibility: Tokenization lowers barriers to entry for investors, allowing even those with limited capital to invest in real estate.
- Improved liquidity: Tokens can be traded on secondary markets, offering potentially higher liquidity compared to traditional real estate investments.
- Fractional ownership: Investors can purchase fractional shares of a property, making real estate investment more flexible and diversified.
- Transparency and security: Transactions are recorded on the blockchain, ensuring increased transparency and security.
- Instant income: Unlike traditional real estate where it may take months to receive income, on-chain tokenization allows investors to start generating returns instantly after their initial investment.
Real estate tokenization is a real opportunity for small investors to enter the real estate market and start generating passive income.
Comparison of the best real estate tokenization platforms
RealT:
RealT is a French platform that allows you to become a co-owner of a property for as little as $50. The platform acquires properties in the United States and tokenizes them on the blockchain, dividing them into thousands of tokens called RealTokens.
Advantages:
- High returns
- Collateralization platform available
- Weekly transferred passive incomes
- High liquidity
- Regular addition of new tokenized properties to the marketplace
Disadvantages:
- Mandatory KYC (identity verification)
- Currently limited to the US market
Wincity:
Wincity is a French platform that tokenizes real estate properties in France. It offers the opportunity to purchase tokenized properties in the form of NFT cards. By buying an NFT card, investors can earn annual returns of up to 10%. Wincity also allows users to purchase virtual lands and earn additional passive incomes through a Play-to-Earn game.
Advantages:
- No KYC required
- A unique concept that combines blockchain, gaming, and real estate
Disadvantages:
- Limited availability of properties
- The game is still under development
- Properties bought only in France (which can also be an advantage for some)
Roofstock Onchain:
Roofstock Onchain is a platform that offers tokenized real estate properties on the blockchain. Each property is tokenized as a single token, meaning 1 property equals 1 token. This limits access to small portfolios as buying whole properties, even if tokenized, requires a significantly high investment.
Advantages:
- A subsidiary of a leading online real estate investment platform.
Disadvantage:
- Few properties available on the marketplace
- 3% transaction fees
- Significant minimum investment
Blocksquare:
Blocksquare is different from other platforms as it focuses on tokenizing properties for companies instead of selling tokenized real estate. The platform transforms real estate properties into digital assets that are deployed on the Ethereum protocol or IPFS.
Square blocksquare infrastructure allows the conversion of a real estate property into up to 100,000 tokens.
The best platform for investing in tokenized real estate
When it comes to investing in tokenized real estate, RealT stands out as an attractive option, especially for those looking to enter the market with a small budget. RealT allows co-ownership of properties starting from a few dollars, with direct access to tokenized shares through the blockchain. It also offers competitive annual returns of up to 15%.
If you’re looking for a secure and reliable way to invest in rental properties without spending astronomical amounts, RealT is one of the most suitable solutions.
For companies looking to tokenize real properties, Blocksquare is also an interesting option.
