UPRETS INSIGHTS | Top 5 Benefits of Digitalization in Real Estate!
What Is Asset Digitalization?
Digitalization is a new term that explains about cryptocurrency fundraises. In this, the investors would exchange cryptocurrency for digital securities. The digitalization is the best way to keep real estate assets secure. You can securitize the assets wherein you can divide the shares of the assets and sell them to different investors. When you digitalize the assets, you will divide the asset into shares, also known as digital securities. The digital securities get high security with the usage of blockchain technology.
Why Is the Real Estate Business Using Digitalization?
Digitalization will eliminate the middle man and make it a piece of cake for the investors and sellers to buy or sell the property. Moreover, developers can also raise capital through this method. It becomes easy for the investors to buy a share in the asset by giving digital securities and for a low price. It makes it pretty easy for owners to raise capital without any financial middle man to be as a spokesperson for both the parties.
Real estate is a complicated sector though it helps people to earn a considerable amount of money. There is a whopping amount of people exchanged between the parties who are buying and selling properties. Investors who are involved in digitalized real estate assets would get huge profits and liquidity in the stock market. The real estate digital securities complement the tangible assets; therefore, they pose a minimal risk over cryptocurrencies.
The World Economic Forum revealed that by the end of 2025, blockchain would store around 10% of the GDP across the globe. The first property that was digitalized is in the US and Europe. These countries have proven that real estate digitalization would give feasibility to technological and economic aspects. There is a prediction that the real estate digitalization would grow humongous, and by the end of 2025, it can grab USD 4.2 trillion of revenue through digitalization.
Here are the top five benefits of using digitalization in real estate:
Improve Liquidity
Digitalization gives a lot of scope to people to buy an asset in partnership. A USD dollar can go up to USD 0.01 lower, but the digital securities can go up to 18 decimals lower. The entry of the investor into an asset is smaller, and there is a lot of scope for fractional ownership. For instance, rather than investing USD 1, 00,000 in a property, an investor can pay USD 5,000 to enjoy fractional ownership. With the real estate digitalization, you can trade digital securities in the secondary market all the time in a day.
The investors who are fractional owners can quickly improve their portfolio diversification and can hold an authentic market portfolio.
Immutability of Blockchain Would Prove the Ownership
Blockchain technology is immutable, and this feature will work wonders in digitalization. When you have a track of digital transactions that you have performed, it would be easy for every investor to show off their ownership.
The best part of having this structure is that it cuts down the fraud cases.
For instance, if an owner of the digital securities would try to sell the same digital security to different people and tries to transfer the same digital security to different investors, it shows the history of the ownership clearly. It alerts the investor to avoid falling prey to the fraud.
Programmability Promotes Transactions and Makes It Easy to Manage Shares
The smart contracts will have logics that are known as programmability. It helps you to automate the events when the conditions are met. There will be specific rules that are already defined. The digitalization process makes it easier for investors to manage their assets. When you depend on third-party exchanges, it becomes easy for you to keep track of the secondary transactions without any issues. Investors can use voting. The programmability also promotes quick settlements as the digital security comprises of compliance that is built-in. In traditional finances, there is a lot of documentation involved to settle the ownership, and until the property changes the hands. It becomes easy to carry out the compliance part on digital securities since every investor would have their digital identity that has gone through the due diligence checks.
Cross-border Transactions
There is a huge demand for residential and commercial real estate globally. However, not all investors are enjoying huge returns on these assets. The problem is that investors are unable to buy the right property. Few other problems are faced by investors who want to invest in the real estate properties in other countries. These include — difficulty in transferring the funds to other countries, immigration issues, visa issues, cost of the property, financial, country-specific laws, exchange rate, and loss of benefits in the home country. These are a few problems that will stop many investors from getting huge returns in the properties that are outside their home country.
With digitalization, you can overcome all these challenges with ease. The digitalization creates a streamlined process. It is easy for investors to diversify their portfolios based on the region and economy. When you use blockchain, it becomes easy for you to gain access to the other country markets.
Promote Market Security and Maintain Transparency
The best part of digitalization is that it uses a blockchain that offers bulletproof security in the digital world. The cryptographic encryption would safeguard the digital securities that would indicate the assets that an investor owns. The owner can gain access to the digital securities using the private keys that would be possessed by the digital security owner.
Another best thing is that the market is transparent, something which is lacking in the real estate world today. The blockchain ledger would have a complete history of the digital securities. You can get the information on how many times the digital security has been exchanged in the past with ease. The investors can dig out the past dealings to find out if the price that is demanded by the investor who is selling the digital security is worthy or not. There is no room for you to overpay for digital securities.
About UPRETS:
UPRETS is a platform focused on simplifying investment in real estate.
We are dedicated to providing a convenient, compliant and advanced real estate digital securitization platform for property developers, asset owners and investors globally.
By utilizing UPRETS platform, real estate developers and assets owners can create digital securities for their properties, allowing investors to benefit from the rental dividends and capital appreciation of the properties in major global cities.
Backed by a publicly listed real estate conglomerate (NYSE:XIN) and our award-winning, patented blockchain technology, Xbolt, we bring a network, experience and luxury assets to the platform.
For more information about UPRETS,
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