Blockchain Technology: The Future of Real Estate
TL;DR - Blockchain technology will make real estate deals liquid, transparent, and third-party-free.
When you think of real estate…
What’s the biggest problem that comes to mind?
Poor tenants… lackadaisical markets… volatile mortgage rates?
While these problems might seem bad, they’re fixable — or highly dependent on how the financial market is doing.
The big issue that’s plagued real estate for the longest time?
Illiquidity.
The sale of real estate and the transfer of ownership take a long time.
It’s not like stocks where you can trade them left and right.
But blockchain technology is charging in swiftly to change that.
It’s attempting to make real estate transactions liquid, transparent, and peer-to-peer.
The only question is… how long until it’s here?
Blockchain Technology: The Future of Real Estate
What Is Blockchain Technology?
In short, blockchain technology is a decentralized, digital ledger that records transactions chronologically and publicly.
It’s secure, transparent, and tamper-proof.
And it’s constantly growing as “completed” blocks are added with a new set of recordings.
Each block contains a cryptographic hash of the previous block, a timestamp, and transaction data. Bitcoin is the most well-known use of blockchain technology.
Bitcoin nodes use the blockchain to tell actual Bitcoin transactions from attempts to re-spend used coins.
But blockchain is so much more than just cryptocurrency.
The real estate industry is starting to explore blockchain technology in a big way.
Some real estate startups are using blockchain to ease the home-buying process and make it more transparent.
Others are using blockchain to create a global real estate marketplace where people can buy and sell properties with crypto.
More have begun tokenizing real estate assets on the blockchain, which opens up a whole new world of investment opportunities.
3 Ways Blockchain Technology Will Change Real Estate
The real estate industry is ripe for disruption.
The way we buy, sell, and invest in property has remained largely unchanged for decades, if not centuries.
But that’s all about to change with blockchain technology.
Here are three ways blockchain will change real estate:
It will make deals more liquid.
Blockchain-based real estate transactions could be completed in a matter of minutes, if not seconds.
This is a huge improvement from the current system, where deals can take weeks or even months to close.
The increased liquidity of real estate deals will lead to more efficient markets and better prices for buyers and sellers.
It will increase transparency and decrease corruption.
Blockchain technology can make real estate deals more transparent by providing a public, tamper-proof record of all transactions.
This would help to reduce corruption and fraud in the industry, as well as increase transparency for all parties involved in a deal.
Not to mention, previously inaccessible documents like:
Contracts
Deeds
Proof of ownership
Identity verification
Inspection history
Will all be free-flowing and easy to get to.
It will remove the need for third parties.
Blockchain tech can enable real estate deals to be completed without the need for third parties such as banks, lawyers, or real estate agents.
This would not only save time and money, but it would also make real estate transactions more private and secure.
The real estate industry is on the cusp of a major transformation.
And blockchain technology is at the forefront of that change.
Setbacks and Timeline
This is the big question that a lot of people have:
When will blockchain technology be used in real estate?
The short answer: it’s already being used.
The long answer: it’s being tested and piloted in a lot of different ways right now, but there’s no real large-scale use of it yet.
Unfortunately, blockchain technology is not without its challenges.
The biggest challenge facing blockchain real estate startups is the lack of regulation.
In most countries, there are no laws or regulations governing the use of blockchain technology in real estate.
This makes it very difficult for startups to operate legally, and it also increases the risk for investors.
Another challenge facing blockchain real estate startups is the high cost of development.
Creating a blockchain-based real estate platform is not cheap.
It requires significant investment in both time and money.
As a result, many blockchain real estate startups are either bootstrapped or reliant on venture capital funding.
Finally...
Another challenge facing blockchain real estate startups is lack of awareness and understanding.
Many people still don’t know what blockchain is, let alone how it can be used in real estate.
This makes it difficult for startups to educate and convince potential customers to use their platforms.
Despite the challenges, there are many reasons to be optimistic about the future of blockchain real estate.
As more people become aware of blockchain real estate startups and as the technology continues to develop...
We can expect to see widespread adoption of blockchain in real estate.
So far, we’ve seen a few blockchain real estate startups emerge and we can expect to see many more in the coming years.
For example:
Ubitquity is using blockchain technology to streamline the real estate closing process
Propy lets you buy/sell a home using crypto and even buy/sell a home as an NFT
So the future’s bright!
It’s still in the early days, but blockchain technology is slowly making its way into real estate. It might take a few years for it to be fully implemented, but it’s coming.
Happy Hunting!
How We Can Help You
Does investing in real estate sound intriguing to you? Would you like to learn more? We’d love to be of value!
At Undoor, we pride ourselves on teaching new and experienced investors how to maximize their gains with minimal stress. Our goal is to help you fall in love with real estate and real estate investing!
Do you want to get key insights and advice that’ll help you get ahead of the game? Don’t hesitate to contact us for any and all real estate wants or needs.
