Bitstake: What You Should Know About Fractional Ownership

A new revolutionary model has been disrupting the asset ownership and investment industry for some time now. Called Fractional Ownership, this concept suggests fractional ownership in various digital and physical assets, especially items of high value, such as real estate. In this article, we discuss, in detail, the concept of fractional ownership and how it is redefining the high-value investment space.

What does the term ‘Fractional Ownership’ mean?

In the simplest terms, Fractional Ownership can be referred to as divided ownership of a single asset. For example, multiple people owning fractions of a single piece of art.

Theoretically, this can solve a range of investing problems. Expensive assets, such as real estate, which can be challenging to buy for a single person can be jointly owned by multiple investors. However, this can be challenging to implement through traditional means. Tokenization has solved this problem by introducing the notion of Fractional Ownership through asset tokenization.

The process involves tokenizing a physical or digital asset on the blockchain, which essentially means creating Non-Fungible Token/s for that asset to be stored and transacted online on a blockchain network. An asset can be divided into any number of tokens. For instance, a property is divided into, say, 100 equal tokens, allowing the owner to sell a single property to 100 different buyers, which makes it easier to sell (and buy).

What assets can be fractionally owned or sold?

There is practically no limit to the types of assets that can be purchased, owned, and sold fractionally through tokenization. This concept, however, works best for rare, unique, and high-value assets, such as art and real estate, due to their limited accessibility and high purchasing cost.

Some examples of assets that can be tokenized on the blockchain and fractionally sold and owned include art, photos, content, luxury cars, private planes, real estate, etc.

What Problems can Fractional Ownership solve?

The traditional investment industry faces many challenges, especially when it comes to investing in luxury or rare assets. Not only are they quite expensive to buy for individuals but also their accessibility may be limited depending on their rarity. For example, an entire multi-storey building can be challenging to buy for a single buyer. This is where fractional ownership comes in.

Fractional Ownership through asset tokenization can offer solutions to a range of traditional investment problems, such as:

• High cost of entry;

• Limited accessibility;

• Low liquidity;

• Lack of transparency;

• Etc.

How does it work?

Fractional investing through tokenization on platforms like Bitstake is making luxury real estate properties accessible to everyone by reducing the cost of entry. Let’s consider the example of a premium tokenized apartment listed on the Bitstake website. Aspire Melbourne with a market valuation of $700,000 would normally be out of reach of many individuals due to its high cost. However, thanks to Bitstake’s real estate tokenization services, anyone can get a piece of this iconic real estate for just A$500 (price per token).

This was made possible through the tokenization of this property into 1294 equal tokens or BITs, each with a value of A$500, allowing investors to buy and own a piece of this luxury apartment fractionally at a very low price. In addition, the property also pays an annual yield of 5 - 6% to owners, with an expected annual growth of 5 - 6% in the investment value. This means an annualized percentage yield of 11-12%. 

Fractional Ownership through real estate tokenization on Bitstake also gives investors the freedom to invest according to their wallet size. You can buy just 1 token, 10 tokens, or 100 tokens, depending on how much you want to invest. The more you invest, the bigger fractional ownership you get in the property along with higher returns.

The Future of Real Estate Ownership is Here, and It’s Incredible!

Some major benefits of the Fractional Ownership model include:

Invest with low capital: Anyone can invest for fractional ownership in high-value properties through Bitstake, even with low capital.

Accessible to everyone worldwide: Thanks to blockchain tech, this innovative real estate investment model is accessible worldwide to everyone with an internet connection.

No side expenses: You’re saved from unnecessary expenses when investing in real estate, such as down payments, maintenance costs, and mortgages.

Diversify: Thanks to this low-cost investment option, you get to diversify your funds across multiple investment venues rather than investing all of it in a single, high-value property, which may increase the risk to your portfolio.

Passive income: When investing in fractional real estate ownership through Bitstake, you also get to earn an annual income, even when you’re not actively involved.

High liquidity: For real estate owners and dealers, this offers one of the easiest ways to sell premium (high-value) real estate quickly to a worldwide audience.