Real estate is traditionally considered the most 'stable' investment; hard to get in, but it never fails to provide value in the long term. On the other hand, crypto has seen its highs and lows in less than a decade, enriching a few and leaving many with a pocket full of coins.
Nonetheless, the blockchain is slowly becoming part of the 'real' economy in the most unexpected ways, uniting the two seemingly distant markets by making it possible to buy real estate using crypto. Even though confined to a handful of agents, the most popular of which listen in this article, spending your bitcoins purchasing the house of your dreams on all continents is now a reality.
If you are looking for a way to invest your cryptocurrencies or are looking for a new property, you might find the method just as reliable and an overall better investment in the long run than going through traditional real estate agents - as long as you are well informed and have your list of options.
Why and How Would You Use Crypto in Real Estate?
Using crypto to buy a house is not unheard of. The first recorded transaction of the kind using Bitcoin happened in 2017 in Austin, and judging by the Bitcoin craze of the last five years, it's not a surprise that many property owners 'exchanged' their real estate with a virtual one that promised growth.
A direct exchange is one of many ways to use crypto in real estate. The tech allows for more for both investors and buyers, taking advantage of the following.
- Tokenizing real estate equity or debt
In simple words, tokenizing means splitting up a property's value into small fractions, making it possible to invest in only a share of someone else's property or, vice-versa, get more investors for yours.
- Using smart contracts to make real estate transactions more transparent.
Smart contracts eliminate the 'human error' aspect and automatically work for the benefit of both sides as long as there are predefined conditions.
You might think there's no difference from a contract where the law forces action, yet considering that laws are not enforced or interpreted the same way in two countries, a smart contract could save you from trouble when purchasing a vacation home in a foreign country and act immediately, without institutional bureaucracies stalling the process.
It's essential to understand your goal before choosing an agent. Some are better than others for different requests, and what works for your neighbor might only confuse you.
Crypto Real Estate - Familiar Bitcoin-Friendly Platform
A straightforward company name with just as simple of a role, Crypto Real Estate is similar to your local listing website, with the only difference being that it accepts Bitcoin payment and assures a safe transaction between buyers and sellers.
This alternative is best suited for those looking for a vacation home in a country that is both a great place to live and retire to and crypto-friendly. Portugal and Cyprus are examples of countries that anyone who wants to safely spend their crypto fortune should know.
The downside is that your options for properties and currencies are limited to only a few locations where the company can operate.
Crypto Emporium - Large Worldwide Selection
Launched in 2018 in Italy, Crypto Emporium has been around since crypto became mainstream, acting as a platform where almost everything can be bought and sold in crypto. It's a verified platform that adheres to EU regulations, adding an extra layer of safety to transactions.
There is an extensive list of countries, properties, and, most importantly, cryptocurrencies you can use for the final transaction. The downside is that the platforms can be confusing because it's not only focused on real estate, and customers' journey is almost identical whether you buy a smartwatch or an apartment in Thailand.
BitPay - Making Real Estate Crypto Transactions Easy
As an app used to pay and get paid with crypto, BitPay is not directly involved in the real estate business. Being a 3rd party payment-processing service, their main task was steered toward actively working on bringing cryptocurrency into the more traditional business realm, with the focus being on the entertainment industry, where they were bullish on implementing crypto payments so users have new ways of buying into new online games.
Expanding on that growth, they've also introduced multiple property transactions, from affordable apartments to a Miami penthouse listed at $22.5 million, still considered one of the most expensive homes sold through a cryptocurrency transaction.
Their main advantage lays in the validity of the already tested payment system and how it collaborates with various agents that make the buyer-to-seller connection. If you know where to find the property, BitPay can ease the final steps.
Will It Ever Become an Everyday Reality?
The downsides of using crypto to buy real estate are mainly a consequence of the complexity of real estate, which is intertwined with banks, and crypto's well-known volatile nature. All of which ultimately cause a lack of demand and supply in various markets. If it were bigger, the agents would be many, and they'd be hunting you to spend your Bitcoin on a property.
United Wholesale Mortgage is one example of a big company trying but failing to implement a mortgage payment system using crypto. In 2021 the second-largest U.S. mortgage lender has made the news by accepting Bitcoin and Ethereum from their clients.
In this case, no outside force intervened for the project to shut down. The CEO simply stated that:
“There was not enough demand at the end of the day to really push the envelope too hard...”
...yet, that volatile nature is what made it an excellent opportunity for others, and so It can be for you now if you have the possibility or soon when blockchain tech gets closer to daily life. Decentralized autonomous buildings are already a reality in the construction industry, so along bear and bull markets, there might come a time when real estate becomes crypto-friendly, and you will know how to act first.
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