The rapid proliferation of real estate investment platforms has transformed the industry. Even so, there are still too many stumbling blocks hindering their efficiency and growth. Real World Assets (RWA) on the blockchain may offer the best solutions by making real estate investing more accessible, much easier, and more transparent.

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Here’s how RWA tokenization could solve the most serious issues plaguing real estate investment platforms:

Easy Access with Full Transparency Attracts a Broader Audience

Historically, investing in real estate would require a lot of capital, which means only a wealthy few could participate. But real estate tokenization allows for fractional homeownership, opening the door to many more investors. Opportunities to buy small shares of high-value properties would be a very attractive proposition to a broad audience. Real estate tokenization could allow a small-money investor to buy shares in rental units for as little as $50. 

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Transparency is another important factor for investors. They want clear and concise information on every opportunity, which must include precise performance metrics. A permanent record is made of all transactions involving blockchain real estate investing. This is why investors trust the data being provided. For your audience to confidently trust your platform, transparency is key. With detailed investment histories including performance metrics, you can build their trust.

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Internet users have come to expect a smooth user experience. A real estate tokenization platform can provide users with interactive dashboards displaying a full range of investment opportunities. These would include investment histories with real-time data, which means there would be no need to speak with a broker. This is in essence a self-service model, allowing for a smooth user experience. Investors can take the time they need to make informed decisions. 

Managing Risks by Offering Diversified Options, Efficiency, and Transparency

Diversification is essential to minimizing investment risks. Tokenization investments allow people to easily diversify their portfolios across a variety of properties and other investment types. With fractional homeownership models investors can spread their risks while increasing their returns. Real estate tokenization platforms can help investors build their portfolios by offering them diversified options through property tokenization. 

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Managing multiple small investments is no easy task, but with blockchain technology the process is streamlined. By automating much of the process, from processing the transactions to ongoing record keeping, management is much easier. This level of efficiency not only reduces costs, but also makes real estate tokenization platforms more scalable.

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To make informed decisions, real estate investors need easy access to detailed histories on the properties they’re considering. With blockchain technology you get a comprehensive record of a property’s history that can’t be tampered with. This level of transparency includes the previous owners, all maintenance records, plus financial performance. This allows potential investors to evaluate for themselves the property’s value and the risks associated with the investment. 

Legal Compliance is Easy with Comprehensive Records of All Transactions

Trying to comply with the complex securities laws involving fractional homeownership can be overwhelming. But blockchain technology makes it easy by providing investors with a clear and accurate record of all transactions. This level of transparency provides accountability. Platforms that utilize blockchain technology for property tokenization while legally complying with complex securities regulations make it easy to offer sound tokenization investments.

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Cross-border investments are more legally difficult due to the complexity and variety of regulations. Because blockchain technology provides regulators with an easily auditable and transparent record of all transactions, complying with international regulations is much easier. So, platforms offering blockchain real estate investing can easily include global investment opportunities without the risk of breaking local laws.  

Transactions are Handled Virtually Allowing for a Global Reach

One of the most notable benefits of blockchain real estate investing is that it allows people to buy and sell properties all over the world without the need to travel for an in-person visit. With blockchain technology investors receive secure, comprehensive records that they can rely on while deciding whether to invest. Using blockchain technology to allow your audience to invest remotely from wherever they are in the world is a major benefit that expands your market reach.

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Recent Reports Show the Potential for Market Growth Thanks to Blockchain Real Estate Investing

Worldmetrics reported that the global market for real estate tokenization was expected to reach $4.22 billion by 2027, growing at a CAGR of 28% due blockchain technology becoming more popular among people investing in real estate. Also, Grand View Research conducted a study that estimated by tokenizing assets, $3 trillion in real estate value globally could be unlocked by 2030. And the World Economic Forum is reporting that by 2027 10% of the global GDP is likely to be stored on blockchain. All of this emphasizes the potential for blockchain in the real estate industry, and in many other sectors as well. 

Conclusion

By utilizing blockchain technology real estate investment platforms can improve access, create transparency, and operate more efficiently. This also delivers a much better user experience, making it easier for people to invest. Real World Assets on the blockchain provides solutions like real estate tokenization, property tokenization, and fractional homeownership. RWA allows people from all walks of life who otherwise would not have the capital to invest in real estate to now have the opportunity. The adoption of RWA solutions may be key to staying ahead in a continually evolving real estate investment market. 

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For more information on how RWA can radically improve your real estate investment platform, explore our Real World Asset page.