Without a doubt, technological innovations and advancements are reshaping the dimensions of the globe in which we are currently living. In the last few decades, great strides were made from physical payments to digital payments, from cash to cards, and from desktop to mobile.
Cryptocurrency and blockchain technology appears to be the next major leap in that evolution.
The enormous asset class of the world is real estate. Real estate professionals and commercial enterprises recognise the revolutionary impact of blockchain technology to streamline payments and optimise commercial and retail property sales. Not only this, blockchain technology plays a pivotal role in increasing access to real estate funds and investment opportunities. From the rental market to general real estate transactions, cryptocurrency and blockchain technology can transform the way landlords and tenants do their business.
Let’s dig into the benefits, use cases, and implementation of blockchain technology in real estate.
How Blockchain Technology proves to be beneficial for the Real Estate Industry?
Commercial real property consists of a notable portion of transaction pursuit and international economic assets. According to a Morgan Stanley Capital International (MSCI) report, the overall size of the professionally managed global real estate investment market evolved from $7.4 trillion to $8.5 trillion from 2016 to 2017, respectively. The real property market of the current era consists of several independent and isolated networks with blurriness and transactional resistance between current systems.
Blockchain technology provides the following benefits to the real estate industry:
- Blockchain technology provides effortless access to secondary market opportunities.
- It brings forth access to broad investor pools because of ownership fractionalisation.
- Blockchain technology gives accessibility to global asset distribution.
- Automated processes help in reducing costs.
- Blockchain technology provides process efficiency for underlying industry operations.
- It permits the securitisation and tokenisation of real property assets.
Blockchain technology allows data accessibility which is crucial to make better investment decisions, enhance transparency and portfolio management.
Apart from this, digital securitisation of real estate properties is one of the most existing ways blockchain technology benefits the real estate industry. Ideally, as a landlord or tenant, that may necessarily want a groundbreaking solution to send and receive cryptocurrency payments in real-time privately, conveniently, securely while streamlining market verticals across the board.
Use Cases of Blockchain Technology in Real Property
Enterprise blockchain technology modifies the real estate industry with the following ten use cases:
- Urban planning
- Project financing
- instantaneous accounting
- Management of property
- Leasing and payments
- Identity verification and KYC of Inventor and tenant
- Loan and mortgage tokenisation or securitisation
- Construction and development of property
- Real property investments and asset management
- Sales, registries, and reassignment of properties and lands
Influence of Blockchain Technology on Estate Management
Large-scale estate management organisations go through incompetent oversights of their universal profiles and holdings. Thanks to blockchain technology as it streamlines rental payments and collections. It facilitates data sharing and makes the life of landlords easy. Blockchain technology also provides premium due diligence across the portfolio. This allows cost and time savings. Moreover, it enhances operational efficiency and generates sustainably richer data. That data facilitates making critical strategic decisions.
Influence of Blockchain Technology on Leasing and Payments
Distributed ledger technology allows leases to be signed as well as paid on-chain in real-time. This automates dividend and rental payments to property owners and eliminates the need for manual reconciliations. Also, smart contracts help in the automatisation of different types of remittances and fees. This stimulates the appropriate behaviour of tenants, landlords, and service providers.
Influence of Blockchain Technology on Real-Time Accounting
Asset owners and investors benefit from near-intermediate and automated accounting as cash flows and property ownership is recorded on-chain. The preparation of annual financial statements, including statements of cash flows, income statement, or balance sheet, will be conducted in the upcoming years with the potential for real-time audits. It enables several breakthroughs in investor relations, regulatory oversight, and compliance.
Influence of Blockchain on Urban Planning
Property development usually encounters the absence of valuable input from the community. The public feels disenfranchised because the local communities don’t express their preferences during the planning process. Blockchain-based planning platforms include feedback loops between stakeholders, educational resources, and token-based participation incentives. This integrates local communities in the property development value chain, encourages community engagement, and improves developer services for sustainable success.
Obviously, blockchain technology and cryptocurrencies are still in the early stages of development. Several industries and investors are curious about what this revolutionary technology has more to serve this world in approaching years. The real estate market is already facing a significant impact of blockchain and cryptocurrencies in the form of smart contracts, tokenisation, and verification. Moreover, it has provided new opportunities for the sale of property and acquisition for real estate investors.
Knowledge, expertise, skills, and advice of real estate professionals are important to commercial buyers in the real property market. However, accounting, document processing, liability management, and processing of securities will inevitably transform. Hence, it’s only time to tell us which improvements and advancements of blockchain technology and cryptocurrencies are the lasting ones.
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