Real estate tokenization VS fractional real estate investment

As the world evolves and becomes increasingly digitized and investment is also changing. La real estate tokenization And the fractional real estate investment are two fairly new investment strategies that take advantage of new technologies.

What is real estate tokenization?

La Tokenization in the real estate sector, it refers to the conversion of real estate assets into tokens on the blockchain and their sale. This can also be done for properties that are under construction.

Los Tokens symbolize investments in real estate and are also used to digitally map properties on the blockchain. They can also serve to raise capital to develop investment properties.

Investors who buy the Tokens own a part of the asset, and each Token represents direct ownership. These assets range from a piece of real estate property to shares in a company that owns real estate, to participation in a real estate investment fund, etc.

La Tokenization in the real estate sector is a way of raising capital for entities, similar to crowdfunding. But instead of money in a GoFundMe account, tokenization investors use tokens on the blockchain for their transactions.

Experts believe that the real estate tokenization can change the economy in a beneficial way thanks to its:

Flexibility: Anyone can instantly invest and become a partial owner of a property to start generating benefits. Investors can also use their tokens to make a profit by selling them to other investors. Tokenization is a better alternative to traditional crowdfunding, as it provides users with instant digital ownership.

Elimination of geographical barriers: Tokenization removes location limitations for real estate investors. If you live in Argentina and want to invest in a property in Spain, there's nothing to stop you from doing so.

Convenience: Blockchain technology removes common investment barriers, such as notary and bank fees, allowing investors to increase their returns more quickly.

Diversification: With tokenization, investors don't need massive sums of money to buy real estate to diversify their portfolios.

Accessibility: All users have to buy is a single token to start investing, making investing much more accessible to investors who don't have lots of cash to invest.

Security: Blockchain technology provides the highest level of security because investments are digitally allocated to investors until they are redeemed or sold.


What is fractional real estate investment?

Fractional real estate investors buy properties that have been divided into shares or smaller units that sell at lower prices than if they were buying the entire property.

La fractional real estate investment can be compared with the Timeshare. But instead of owning timeshare units, fractional investors own part of the property and can earn passive income by renting, making a profit when the property is sold, or making money when they sell their shares for more than they paid.

La fractional real estate investment includes the benefits of Tokenization mentioned above, and in addition...

Affordability: The barrier to entry for fractional real estate investment is lower than having to buy an entire property and keep it on your own.

Liquidity: It's much easier to sell your shares in fractional real estate investments than it is to prepare a property for sale, list it on the real estate market, wait for it to sell, and pay the associated real estate agent and closing costs.

Shared risk: Fractional property owners share everything from profits and losses to liabilities. There's no need to worry about maintenance or tenant complaints and problems. Instead, you work with a team of experts who take care of everything for you.

Final Thoughts

Both fractional real estate investment and real estate tokenization allow investors to own larger pieces of investments, such as real estate. They also both take a crowdfunding approach to raising capital. The main difference is that tokenization takes place on the blockchain, while fractionalization uses physical currency. Which option is best for you will depend on your financial situation and your investment objectives. So take some time to investigate properly and then consult with our team for any questions you may have.

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