The real estate industry is growing at a rapid pace; however, it is also a paradise for scammers. According to the most recent FBI data, there was an 1100% rise in Business Email Compromise (BEC) scams from 2015-2017 while the reported monetary loss increased by nearly 2200%. Additionally, dozens of fees such as appraisal fees and escrow fees are included in the real estate closing cost that put the burden on the individual’s pocket. Addressing these challenges is necessary for seamless real estate operations.
In recent years, Blockchain has emerged as a groundbreaking solution for several industries, and the real estate sector is no exception. Several Blockchain use cases in real estate show how this sector is constantly transforming with the introduction of this technology.
The following are top 10 Blockchain use cases in real estate transforming the industry to a great extent-
The real estate industry is undergoing a significant transformation with the introduction of tokenization- the process of converting real estate assets or financial instruments into digital tokens stored on Blockchain, allowing for the transfer of fractional shares or digital ownership. The real estate industry, with a market size of approximately $200 million, makes up about 40% of the digital securities market, making them one of the popular investment options.
Tokenization enables seamless creation, issuance, and exchange of assets. Additionally, digital assets can easily be customized as per the issuer’s requirements. This customization and rapid issuance enable issuers to customize the assets as per the investors’ demands that further reduces the counterparty risks and reduces costs. The reduced costs enable issuers to reach a wide pool of investors at a minimum investment amount. Such Blockchain applications in real estate pave the way for a better future for the industry.
Blockchain applications in real estate include seamless leasing and payment processes. This distributed technology automates rental and dividend payments to property owners, eliminating the need for manual reconciliations. Additionally, smart contracts have the capability to automate various types of payments and fees in order to encourage positive actions from tenants, landlords, and service providers. Payment and leasing process automation is one of the significant real estate Blockchain use cases that let several business owners rely on this technology.
As Blockchain has the capability to record property ownership and cash flows, investors and asset owners can reap the benefit of automated and real-time accounting. Blockchain technology for real estate has emerged as a robust innovation that will enable the preparation of annual financial statements (cash flow statements, balance sheets, or income statements) based on real-time audits in the future. Such real-time accounting enables regulatory oversight, multiple breakthroughs in compliance, & investor relations.
Loan origination is reliant on paper documentation that puts a question on security structuring and can result in the double-pledging of assets. Besides this, cash reconciliations across lifecycle events often experience settlement delays that affect the investor’s cash flow.
Blockchain applications in real estate provide banking or financial institutions easy access to verified information that enables secure data sharing, promotes immutable transaction monitoring, and makes real-time payment settlement. The digital loan or mortgage can be programmed to include data such as loan payment history and ownership rights that helps in decision-making. Smart contracts can automate the payment collection and distribution to beneficiary holders for a smooth lifecycle.
Blockchain-based digital identities built from KYC/AML procedures can reduce costs, streamline background checks and enhance security. This powerful tool allows an investor or tenant to prove their property ownership while sharing necessary documents such as proof of insurance, identity, and credit history with necessary parties. Blockchain-powered digital identities are an impressive real estate Blockchain use case that gives users a reason to trust this decentralized technology.
The land and property registration process still involves paper documentation that is vulnerable to losses, fraud, errors, & mismanagement. Not only this but property transfers and permits involve a multitude of lengthy and costly procedures which affects the user’s overall experience.
Blockchain eliminates the troublesome and traditional paper deeds with digital assets and gives the user freedom to track changes on a distributed and immutable ledger (a secured source of truth for documents between multiple parties.) For instance, Ethereum makes property ownership and transaction records more accessible. This Blockchain for real estate transactions is considered an optimal option that also increases investors’ confidence and financial opportunities. The land registry authority of Sweden, Lantmateriet, has a Blockchain-based digital land registry platform that highlights the Blockchain use case in real estate.
Property development typically takes place with minimal involvement from the community, resulting in a lack of valuable input. Local residents frequently experience a sense of exclusion from the planning procedures, making it difficult for them to communicate their preferences for the neighborhood. Employing Blockchain-driven planning platforms offers the opportunity to incorporate educational materials, participation incentives through tokens, and a continuous exchange of ideas among stakeholders. Such an approach would promote active community participation, effectively linking local residents with the property development process. This, in turn, would enhance public trust, and contribute to the long-term viability of the project.
To conclude, the adoption of Blockchain technology for real estate industry can transform the industry to a great extent. Several Blockchain use cases in real estate clearly show how the technology will strongly impact several areas of the industry and strengthen the entire ecosystem.
Previously, the idea of transacting high-value assets such as real estate through digital channels appears to be meaningless. However, the introduction of Blockchain in real estate has revolutionized the way the industry works. Blockchain technology for real estate has opened up more ways to enhance the business owners, tenants, investors, or stakeholders’ experience. While challenges such as regulatory concerns and technological adoption remain, the potential benefits far outweigh these hurdles.
As the industry continues to embrace innovation, it is imperative to integrate the Blockchain into your existing system. Antier is a trustworthy partner you can rely on for Blockchain Development for Real Estate. We are the most reliable organization, having years of expertise in offering the best Blockchain for real estate transactions that can be more accessible, efficient, and secure than ever before.
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