Your First Year as a Blockchain Real Estate Owner

Sep 28, 2021Real Estate Tokenization

The internet revolutionized real estate by putting a tremendous amount of information at the fingertips of buyers instead of locked away behind industry gatekeepers. Yet for everything Real Estate 2.0 changed about how investment works, it did not alter the glacial speed of legacy real estate. 

Legacy real estate investing is extremely slow. Long lead times to close on purchases, potentially decades of paying off loans, and an arduous process to exit the investment are but a few of the reasons why. RealT’s blockchain real estate approach, however, an innovation worthy of the title Real Estate 3.0, works at warp speed as compared to its predecessors. Fractional real estate moves so fast that a year can seems like a long-time horizon.

Accordingly, in this post, we’ll explore everything that happens during your first year as a tokenized asset landlord. First, the accelerated pace of RealT’s crypto real estate investment begins before you’ve bought your initial token in a property. Getting up and running as part of the RealT community begins by setting up your RealT account. You will also need a digital wallet to hold your tokens such as MetaMask

After the setup process, you’re ready to enter the lightning-fast process of buying tokens posted for auction at the RealT Marketplace. Many properties sell out in a flash, although the hours and minutes leading up to a new auction may seem endless to eager investors! 

What you should also know is, rapid investment decisions in tokenized real estate are a major departure from legacy real estate investing. This change is driven by three factors: 

  1. RealT’s team, which possesses decades of combined experience, does all the work to identify ideal real estate crypto properties. Real estate tokenization also greatly lowers the chance investors will end up with a bad property investment generating minimal rental income. 
  2. Many of the risks in legacy real estate investments are mitigated in decentralized real estate investment. For example, there is no danger of foreclosure because no RealT investment property carries a loan.
  3. If investors change their mind about the properties they hold tokens in, they can sell them back and shift to a different passive investment opportunity. This provides a level of flexibility that legacy real estate investors could never dream of.

Investors familiar with cryptocurrency may feel like the purchase process we’re describing is akin to their experiences with Bitcoin, Ethereum, and other digital currencies. There certainly are similarities as RealT tokens are powered by the blockchain, however there are also considerable differences, too. 

The primary distinction between RealT tokens and cryptocurrency is that they are tokenized assets. This means instead of being a speculative investment like cryptocurrencies, these tokens are tied to tangible assets in the form of real estate. While cryptocurrency investors are often searching for the next “moonshot,” RealT tokens offer a different set of benefits: the security of real estate and the income yield that property investments provide. This revenue begins streaming into your account just one week after you become a landlord by investing in RealT tokens.

Of course, earning rental income so fast may come as a shock to legacy real estate investors. They are used to months of delay well beyond closing, including a period in which reserves are accrued from rents collected. But in the fractional real estate market powered by RealT tokens, those reserves are already in place and fully funded. 

After just one week, rental income will be delivered to your wallet, often boasting an average of 11.5% yield. At this stage, you as the investor may choose to receive rental income directly into your wallet or to reinvest rent income into other tokens. This attractive latter option keeps the size of your real estate investment growing in a similar manner to a stock investor’s dividend reinvestment plan (DRIP). But unlike a DRIP, which typically buys shares in the same listed security, reinvestment goes into tokens for other properties, creating instant and effortless diversification for you as the blockchain real estate investor.

The first year for you as a Real Estate 3.0 investor is also focused on getting in on more RealT auctions. After all, this is a passive investment idea—there is no need to actively manage the property, this task is in the hands of experts. Investors can sit back and collect rent all the way up to the one-year mark, which is the most significant event for RealT properties after the initial auction. (Each year, RealT properties undergo an assessment that is a critical milestone for every investor.) Based on the assessed value of the property, the value of each token in the property may move up or down. 

But don’t worry, a downward move isn’t a terrible thing. Since rent payments stay the same, it has the effect of increasing the rent yield for the tokens. The one-year mark is also where RealT receives its 10% fee for running the auction. This isn’t a matter of the company taking money out of the wallets of investors, because in exchange for this fee, all token holders receive governance tokens in RealT itself. Now, you’re invested not only in fractional real estate, but also in the most exciting DeFi company in the market.

Set up your account today to join the real estate 3.0 revolution and start investing

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