Integration of Blockchain Tokenisation in Real Estate: A Review

Integration of Blockchain Tokenisation in Real Estate: A Review

Basit Ali Bhat (Lovely Professional University, India) and Nitin Gupta (Lovely Professional University, India)
DOI: 10.4018/978-1-6684-4133-6.ch013
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Abstract

Real estate is among the top reliable investments because it provides a reliable source of income through rent and leases. While there are many benefits, one of the main negatives of real estate investment is the lack of liquidity and transparency. Blockchain technology holds real potential to address this issue, making the market accessible for investors. Due to the utility and flexibility of constructing security tokens secured by real assets, real property can be liquidated through the use of special purpose vehicles. Blockchain tokenisation technology will revolutionize the real estate market across all aspects: ownership selling, managing, and investment. Tokenisation shifts physical real estate into the digital world and could lead to significant savings in the cost of the pre- and post-tokenisation phases. Policymakers and developers in India have started talking about shifting from the traditional investment towards new blockchain tokenisation. Tokenisation may prove to be a viable funding source for those relatively poorly capitalized financial markets.
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Background

Real estate crowdfunding is a platform that allows investors and entrepreneurs to meet individuals or corporate funders who are looking for funding opportunities to purchase, construct or renovate the real property. Many crowdfunding options are available, including those that reward, donate, lend, or invoice. Real estate crowdfunding is an equity-based type of crowdfunding. (Cummings et al., 2018) The motivation of funders is to make a profit without the need for bureaucracy and buying the entire property. Funding campaigns specifically designed for real-estate acquisition typically necessitate a significant investment as well as a small share of the property.Investors who are unable to conduct proper research on real estate investments can join the online platform and review due diligence materials. They can then evaluate the potential benefits of the real estate investment, such as capital appreciation and rental income.

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