Real estate investment has traditionally been an exclusive domain reserved for the wealthy. However, fractional ownership changes the game by allowing smaller investors to buy a piece of the pie. And with the advent of blockchain technology, fractional ownership is becoming even more accessible and secure. In this article, we’ll explore how blockchain is disrupting property investment with fractional ownership.
What is Fractional Ownership?
Fractional ownership is a concept that allows multiple investors to own a single property collectively. Each investor owns a percentage of the property and is entitled to a corresponding portion of the profits. This fractional ownership allows smaller investors to invest in high-value properties that would otherwise be out of their reach.
Blockchain technology is a digital ledger that records transactions securely and transparently. It can revolutionise the real estate industry by making it more accessible and secure.
Fractional Ownership in Real Estate
Fractional ownership offers several advantages to investors, including the ability to invest in high-value properties with a lower initial investment. Additionally, investors can diversify their portfolios by investing in multiple properties. Another benefit of fractional ownership is the consistent passive income it can provide.
Other than that, certain investments in fractional ownership do not incur Real Property Gain Tax (R.P.G.T.) when sold. Property investors are selling their partial rights to the property via a contract rather than selling the entire property itself. This exemption from RPGT is applicable when the legal documents do not change the property owner’s name. Nonetheless, investors must clearly understand the investment structure before selling their fractions to avoid any possible legal issues.
Tokenization and Blockchain in Real Estate
Tokenisation refers to converting a real-world asset, such as property, into digital tokens that can be traded on a blockchain network. This conversion enables investors to easily buy and sell fractions of a property, making real estate investment more accessible than ever before.
Benefits of Tokenization and Blockchain
Blockchain technology offers numerous benefits for real estate investment. Improved liquidity and accessibility are perhaps the most significant benefits of tokenisation and blockchain in real estate investment. By tokenising a property, investors can buy and sell fractions of it without going through the traditional buying and selling process. This property tokenisation allows them to access the equity in the property more quickly and easily.
Blockchain technology also increases transparency and security in transactions, reducing the risk of fraud and disputes. This makes real estate investment more appealing to a broader range of investors, further increasing the accessibility of the market.
The Future of Fractional Ownership and Blockchain in the Real Estate Industry
The future of fractional ownership and blockchain in real estate is bright. As the technology becomes more widespread and accessible, we can expect to see more fractional ownership projects and tokenised real estate assets. However, there are also potential challenges and drawbacks to consider, such as regulatory hurdles and the potential for market volatility.
Fractional ownership and blockchain offer exciting new opportunities for real estate investors. They provide increased accessibility, liquidity, and security, making investing in this lucrative market effortlessly.
In conclusion, blockchain is disrupting property investment with fractional ownership. Tokenisation and blockchain technology are making real estate investment more accessible and secure than ever before. As the industry continues to evolve, we expect more exciting developments. If you’re interested in investing in real estate, consider fractional ownership and blockchain as innovative options for your portfolio.
If you’re considering real estate fractional investment, you should check out Likwid Asset. We have had the opportunity to consult with them and found them to be a reputable provider of fractional ownership and blockchain solutions in Malaysia. With their expertise and experience, they can be a helpful resource for you in making informed investment decisions in the real estate industry.