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Location: Level 2/627 Chapel St,
South Yarra VIC 3141
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Real Estate NFTs are tokenized assets sold in the form of non-fungible tokens that are revolutionizing the way people buy and sell properties. In this article, you’ll learn concise details about real estate tokenization and how NFTs work with examples.
NFTs stand for non-fungible tokens, which are a special type of cryptocurrency. Unlike regular or fungible tokens, NFTs are unique and indivisible. Each NFT is unique with its distinct features. No two NFTs can be exactly alike. NFTs can be transferred, but they cannot be exchanged for one another.
NFTs are based on blockchain technology, so they follow the principles of peer-to-peer trading and are inherently secure, transparent and globally accessible. The NFT transactions are nearly instant.
NFTs are commonly used to represent rare or unique assets such as art, content, photos, and real estate.
Practically, any unique asset can be tokenized as a non-fungible token. These include real estate properties. The benefits include enhanced liquidity, global reach, low transaction costs, increased transparency and security, and fractional ownership.
The biggest benefit of real estate NFTs is that they enable people to buy and sell fractional ownership in properties. To understand how fractional ownership works, let’s talk about the process of real estate tokenization.
Real Estate tokenization essentially means digitizing the value of a property into blockchain tokens. It means a digital version of the property is stored on the blockchain as a file that contains all the property data, including its current ownership and transfer history.
Since each property is a unique entity, it can be represented by NFTs for seamless global access and trading. For increased convenience, a property can be divided into multiple fractions through tokenization. Each fraction is represented by a unique NFT and can be sold and transferred online. Let’s discuss real estate tokenization further with an example.
BitStake is a real estate tokenization and NFT marketplace that provides access to tokenized real estate through non-fungible tokens, enabling people to buy and sell fractional ownership in premium real estate all over the world.
Property owners and sellers looking to tokenize and sell properties can use the BitStake NFT marketplace to turn their properties into NFT tokens. Each property, depending on its value and size, is divided into a specific number of fractions, each of which is identified by a unique NFT.
For example, the Aspire Melbourne apartment listed on the website has been divided into 5930 NFTs, with each NFT costing A$100. This enables people to own a piece of this luxury apartment in Melbourne for as low as A$100.
People looking to buy or invest in a luxury property can check out the latest listings and choose a property to buy through NFTs. The market valuation of this apartment is $700,000, but one can own a fraction for just A$100 and enjoy a lifetime APY (annual percentage yield) of 11 - 12%.
Enhanced liquidity: Real estate NFTs can be bought, sold, or traded online, ensuring higher liquidity with global access.
Fractional Ownership: Some properties can be too expensive to buy whole. NFTs allow you to buy a fraction of it.
Diversification: Rather than putting all your money in a single expensive property, own fractions in multiple properties to reduce risks and enjoy higher profits.
Simplified transactions: NFT transactions are simple, seamless and secure. There’s more transparency and no middlemen.
Global access: Anyone can buy real estate NFTs to get fractional ownership in tokenized apartments, land or bungalows in any corner of the world.
Smart contracts: All transactions, including NFT transfers, rent payments, property assessments, etc. are performed by autonomous contracts, ensuring full transparency and zero fraud.
NFTs are blockchain-based digital assets that enable seamless real estate trading through property tokenization. Thanks to platforms like BitStake, real estate tokenization is now seamless and accessible to everyone. People from all parts of the world can invest in premium properties by purchasing fractional ownership through NFTs. Besides high potential growth, owners receive annual returns (rent) paid automatically through smart contracts.
Location: Level 2/627 Chapel St,
South Yarra VIC 3141