The property market prices are surging in value at an unprecedented level. What this essentially means is that today, it is more challenging than ever before for many people to purchase properties without a mortgage. A secure as well as affordable investment option could be the key to overcoming this issue, and this involved fractionalisation.
A fractional investment essentially allows any investor to diversify their investment portfolio by allowing them to invest in a proportionately smaller amount of money in order to obtain co-ownership of a higher-value asset in the real world without needing to manage it physically.
Fractionalisation is a procedure that involves owning a fraction of a single or multiple properties whilst also reducing any financial burden in property ownership, which can also provide a passive and impressive return to the investor.
How the Real Estate Industry Benefits From Undergoing the First Fractionalisation
There are numerous reasons why real estate is the ideal asset that can undergo the first fractionalisation, and we are going to go over the main ones that you need to keep in mind.
Owning a property through fractionalisation is a much simpler and easier process, especially when you compare it to the tedious process involved with buying properties through traditional investment methods, which can involve a lot of paperwork and numerous formalities, alongside all of the required information relating to the property.
This is a cost-effective way of investing which provides investors with the benefits of essentially owning a real estate-related asset without needing to pay a large upfront sum of money. If a property is outside of a person’s price range, they might want to opt in and just buy a specific percentage of it, where, through fractional ownership, a group of investors can essentially step in and divide the asset quality, which allows all of them to get an individual share of the property. This means that they can reap the various benefits associated with it.
Another key advantage involved with fractionalisation within the real estate industry revolves around diversification, which allows an investor to essentially reduce the volatility of their portfolio and safeguard their future by enabling them the opportunity to buy shares in a variety of different properties for a small initial investment.
- Capital Appreciation
By leveraging the power of fractional ownership, any investor is essentially provided with the opportunity to take advantage of the appreciation of that capital alongside the regular cash flow involved with renting out the location in question.
Alongside all of the aforementioned points, another key advantage of fractionalisation is the fact that it makes an otherwise illiquid asset in nature and enables it to have a high level of liquidity due to the fact that investors can withdraw their investment through the process of just selling their shares of that property to other willing investors.
This means that any one of them can opt out of their investment, as they do not have to sell something through a huge lump-sum, where only a limited number of people will be able to afford it. Tokenization of real estate assets opens up many opportunities.
Stay informed about what’s going on in Real Estate.
Subscribe to be the first to hear about the newest profitable real estate investment opportunities. With Propchain’s newsletters, you’ll learn the critical investing takeaways from essential news items, and the macro trends that underpin them. We keep it simple and give you the TLDR each time.
Real Estate Asset Fractionalisation and How You Can Get Started
While this is not a new concept, fractional ownership has become one of the most popular business ventures in recent years due to the fact that it reduces the financial burden for a single investor or a single property owner.
Real estate asset fractionalisation is a great way for young investors to get into their first home, and other investors can help them out with the prospect of a good return alongside providing them with less monetary stress.
With the use of blockchain technology, this is a hassle-free investment as tokenization is the process of converting real assets into several digital tokens, after which they are sold on a digital platform. The people that buy these tokens then own a portion of that asset, and these can be a portion of real estate, a share in a company that owns real estate, or through participation in a real estate fund; the list goes on and on. Basically, by leveraging the blockchain, there is increased trust, security as well as transparency, alongside speed and traceability of the data.
If this has piqued your curiosity and you are genuinely interested in getting your hands on some property through a fractionalised purchase, you can leverage the power of blockchain real estate tokenization.
By leveraging the power of Propchain, you can manage a modern real-estate portfolio without the need for a large down payment or a mortgage. You can browse through a vast selection of properties and invest in the ones that fit your specific needs the best, and you can build a portfolio of properties around the world without leaving home whilst also earning income from your investments.
Want to become part of this revolutionary surge in Asset Fractionalisation? Head on over to our FINAL Whitelist Spots Application Form for Propchain’s very own native token $PROP, read our deck and make an informed investment decision, here.