Regulatory ComplianceAdhering to regulatory compliance is the chief requisite and our real estate tokenization platform development solution guarantees that.
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Real estate is a traditional business that has always been looked up to as a gigantic market for decades. Reports say the real estate market alone sums up to a staggering $280 trillion. And even a fraction of it getting digitized can account for a billion-dollar industry that has already started to groove.
Real estate investment can seem like a Herculean task for a huge population out there. But it's now plain sailing with the advent of blockchain technology and its extent of operations over diverse sectors, especially the real estate industry. Now, the limelight of faith has fallen over everyone out there yearning to make their investments. Thanks to real estate tokenization and the fractionalization of assets, it brings to the table.
It rakes the pockets of both the investors and the issuers with a loadsome of revenue. By fractionalizing the asset, the issuer gets to hold a share of ownership right while selling the remaining shares to other investors. Also, the issuer can still benefit from the earnings the property can offer, like rent.
Tokenization is a way of digitalizing real estate assets, enabling fractional ownership and boosting liquidity. Sellers receive a flexible sales instrument, and buyers can pick up real estate opportunities without having to deal with traditional entry barriers. It offers investors and homeowners a way of further unlocking the value of the real estate by using tokens as collateral for loans.
Tokenization of real estate asset needs to comply with legal standards and we at Appdupe make sure this criteria is met. We have roped in a crew comprising legal and financial advisors, who are adepts in handling services related to asset tokenization.
Our Catalog For Real Estate Tokenization
Decentralization
Ratio of tokenization
Investor verification
Smart contract
Asset type/Type of interest
International fundraising
Investor traceability
Legal entity
Location of the asset
Corporate code
Mortgages on asset
Before taking a leap into the tokenization market, you need to know the potential growth it withholds.
The market cap of real estate asset tokenization accounted for $2.3 billion in 2021. As tokenizing assets is decentralized and keeps away the potential of data theft since all the associated records are stored in distributed ledgers.
As the security complaints are favorable to traders, the market cap is also expected to upturn by recording a growth of $5.6 billion by 2026.
Generally, asset tokenization falls under multiple categories, and it is the same for the real estate niche. Here, you will unearth how tokenization of real estate asset is categorized.
Residential Real Estate Assets Well, the name is suggestive. Those who are interested in tokenizing residential real estate can either fractionalize or fully tokenize the properties.
Commercial Real Estate AssetsTokenizing any sort of commercial property can be carried out. The owner can decide on the number of fractions/shares in which the property has to be divided for the tokenization of commercial real estate.
Individual Real Estate AssetAnyone can avail of tokenizing their real estate assets, and how can it be different for someone owning a single property?
Trophy Real Estate AssetsThe title may seem unclear to you, but here is what it proposes. Trophy real estate properties can be defined as the ones that are superior to usual real estate properties. For example, beach-facing residents/resorts are perfect examples of this category. Simply, real estate properties that have superior amenities are termed trophy assets.
You must be quite keen to know how the entire process of real estate asset tokenization happens. We know your nerves! Here is a clear breakdown of how tokenization in real estate actually works.
Assume you are the owner of a property and it covers a particular number of sq ft.
Now, based on your preference, you can split up the whole property into fractions on the basis of sq ft. For example, you own a property accounting for 8000 sq ft and $5 lakhs.
Then you can divide it into 8000 fractions each comprising 1 sq ft and so will be the price. Investors can purchase any number of digitized shares of the property. And that’s how tokenization of real estate works!
Security tokens are the ones that represent the shares the investors hold. Clearly, investors who buy shares of properties will be issued with security tokens. When the investors are willing to sell their shares, they will actually sell those tokens.
We will develop real estate backed tokens. Our real estate-backed token development for your platform will abide by the legal regulations.
Regulatory ComplianceAdhering to regulatory compliance is the chief requisite and our real estate tokenization platform development solution guarantees that.
Security For FundsOur decentralized platform solution for tokenizing real estate assets is pinned with industry-standard security protocols that protect funds from prospective cyber attacks.
Risk-Free TransactionsRisk-free transactions are every user’s concern. Since all the transactions on our platform will get recorded on the distributed infrastructure, transactions become risk-free and smooth all at once.
Automated Admin TasksThe entire set of admin tasks comprising asset listing management, smart contract generation, transaction processing, etc., is automated.
Global investmentsOne of the primary perks of relying on a real estate tokenization platform is that owners/investors all over the globe can interact in accordance with trading. This will ultimately create a wide scope as it brings together investors and owners all over the world.
Fractional OwnershipBy now, you would be clear with the concept of tokenization and what fractional ownership holds in. Since properties can be divided into numerous shares, it becomes easy for investors who can’t afford to buy the entire property as such. Here, nearly two types of advantages surface up. Fractional ownership in itself is an advantage, which brings in another advantage of inviting more investors because of the affordability.
No Third-Party InvolvementThe decentralized trait of the real estate token issuance platform cuts off brokers or intermediaries. Consequently, users need not spend on broker fees and concurrently have the advantage of risk-free investments.
Immutable BlockchainSince blockchain technology declares immutability, the tokens, the ownership stored in them, and the transaction record become tamper-proof. Hence, a high level of security is guaranteed through immutability.
Efficient & Quick TransactionsThe traditional real estate business is cumbersome and lengthy. Digital tokenization facilitates streamlined and quick transactions.
If you are fanatical about the degree of popularity the tokenized real estate assets are earning, then meet our token issuance platform development solution. Keep yourself focussed in this section to know about the crucial features of our platform for your users.
Assures speedy transactions
Cut off the involvement of third parties
In-built payment service providers
KYC and AML compliance
Presence of a voting system
Forums for discussion among investors
Digital stock certificate representing the ownership
Regaining lost tokens using recovery mechanism
All Set For Launch Our ready-to-implement platform for real estate tokenization will reduce the overhead costs you will have to bear if you develop the platform from the initial phase.
Adaptable To RequirementsYou can shape the platform in your own way right from features to the overall platform.
Supports Multiple CurrenciesUsers are free to trade shares in the preferred type of currencies -fiat or cryptocurrencies.
Are you all set to explore the core concept of tokenizing any real estate assets? This section articulates the overall stages associated with digitizing a property and selling them over a decentralized platform.
Asset RecognitionIdentifying the assets based on their category will come under asset recognition. During this phase, assessing the property’s value will also take place.
Smart Contract GenerationOnce the assets/properties are determined, as per the blockchain compliance, a smart contract is generated. Generating the smart contract for assets is mandatory since it holds the terms and conditions related to the asset.
Security Token CreationTrading of assets involves exchanging security tokens. So before heading to trading assets, token generation is crucial. Asset owners need to determine the number of tokens and select the platform for trading them. We provide real estate STO launch services.
Token DistributionIn order to let potential investors know the sales of the asset, owners will indulge in marketing. They will also list the tokens on the platform. If investors declare interest in buying, their accreditation will be confirmed and tokens will be issued to them.
Post Listing SupportAfter listing the tokens on the platform, investors are given constant support in regards to payments, ownership, etc.
Tokenization Real estate tokenization is classified into different categories. Apart from assets, mortgage, equity interest, etc., can also be tokenized. So, tokenization differs as per the interest of the owners.
Smart Contract The next step is smart contract creation. Of course, the platform you develop will generate smart contracts, yet owners must specify crucial attributes. For example, owners can provide privileges to token holders in the form of dividends/profit shares.
Tax RegulationsBefore trading the assets on the platform for sale, owners and buyers must ensure they are aware of tax regulations.
Adherence To KYC/AMLIt is mandatory for both owners and buyers to adhere to the Know Your Customer (KYC) and Anti-Money Laundering (AML) regulations before trading tokens in order to prove their credibility.
Awareness Of Global RegulationsIn regards to the real estate industry, regulations vary from country to country. Hence, token issuers/owners must be conscious of rules and regulations for real estate assets across the globe.
As the concept of tokenizing real estate assets supports fractional ownership, owners can decide the type of rights given to the buyers. While creating the tokens, owners must specify the rights related to the property they sell on the basis of fractional ownership.
Property Rights The property rights define the ownership of the listed asset. The owners are the ones who have the right to mention whether the asset will be sold as such or divided into shares. If the owner opts for fractional ownership, then the number of shares will have to be cited.
Voting Rights While developing tokens for specifying the shares, owners can also include voting rights regarding the trading of the real estate property. Owners will have to clearly state whether the buyers have rights to decide on the sale of the property or just the share.
Access Rights When it comes to accessing the property/shares, owners can determine the rights for token holders. For example, an owner owns the land and wishes to construct a building on that land. To raise funds for that building construction, they can tokenize the property into fractions and acquire capital. Here, token holders can be given rights to regain the capital (similar to EMI) and have no access to the building constructed. Similar use cases can be included in the tokens.
The hypothesis of decentralization in real estate is in its early stages and needs certain amendments in order to welcome mass adoption. Since you are about to venture into the real estate token offering services, it is necessary to implement the legal and practical regulations.
Unlike cryptocurrencies, which are virtual currencies, real estate assets can’t exist without a physical presence. Importantly, trading these assets must be compliant with the local property regulations while also being decentralized.
Though the tokenization of assets follows decentralization, there needs to be some extent of centralization as well for normalizing the whole process.
Our real estate token development company has a team of spirit-filled subject matter experts, who breathe in and breathe out security token offerings (STO). We have come up with a stack of reasons that influences you to strike a partnership with us for the tokenization platform development.
Effective brainstorming sessions
Industry-standard experts
End-To-End customizations
Up-To-Date Tech stack & Tools
Adherence To Deadlines
Budget-friendly services
Extended tech support
Get your blockchain application development idea validated right away.
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