Over the years, blockchain technology has proven to be one of the most disruptive technologies for most industries. And real estate is no different, which is why decentralized technology provides some of this industry’s most significant use cases. Certainly, blockchain development in real estate has the potential to revamp the industry by enhancing efficiency, and boosting security, and privacy while leasing assets, purchasing, and selling.
Thus, blockchain is a boon for one of the most fitful industries. The technologies offer the right solutions to overcome the challenges of the real estate industry, which we will discuss in detail later.
Although blockchain development in real estate has a long way to go, we can expect the technology to disrupt this industry soon. Blockchain development trends in the real estate business were high last year. Notably, the global blockchain in the real estate market is expected to make $3884.8 million by 2028.
In this article, we will talk in detail about the scope of blockchain development in real estate, challenges to overcome, and more. So let’s begin with the discussion.
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Challenges in the Real Estate Industry & How Blockchain Can Solve It?
In the recent past, commercial real estate has experienced a drop in its growth. It is because of some of the major problems that remain unresolved in the industry. The shift in the economy and growing trends are two major challenges to overcome.
With the emergence of blockchain development in real estate most of the challenges the industry faces can be overcome. That is why it interests most people to understand the use cases and scope of blockchain in the real estate business. Something we will focus on in this section.
No Transparency And Slow Operations
One of the biggest problems with the real estate industry is its lack of transparency between the builders, usually which is the result of most of the frauds, delays, and money laundering. These are also some of the major reasons why this industry is experiencing slower growth.
Besides, the real estate industry is not available to everyone because of many reasons such as citizenship, credit score, money and resources, recognition, and more. In addition, there is no specific information or database available to make the right buying or selling decisions at the right time.
All of this makes the real estate industry highly volatile and unavailable to the general public.
Blockchain Development in Real Estate provides an ideal solution to resolve all these issues and more. One of the major benefits it offers is a shared secure database.
Blockchain in real estate makes databases for sale, purchase, and lease easily available to the public as well as realtors. Also listing services from a private database of agents and brokers is available through blockchain in real estate. Everyone who has legal access to the blockchain-based database can use the information. Thus everyone involved in the real estate business including, sellers, lenders, owners, tenants, investors, and related service providers can always have access to legitimate information.
The blockchain real estate users can share information with the participants. Thus they can be sure that their data and information is always secure.
Thus blockchain development in the real estate industry allows creating platforms for all the groups involved. With secure, fast, and transparent automated platforms that provide access to real-time information.
Slow and High-Risk Transactions
Another issue with the traditional real estate business is the involvement of higher risks in the transactions. Usually, the transactions take a long time to process. However, one of the major use cases of blockchain development in real estate is revolutionizing the transaction process. Typically blockchain in commercial real estate involves transactions of billions of dollars daily, which occurs in a fast and secure manner.
The decentralized trustless technology permits direct transactions between both parties, without any need for verification or validation of the transactions.
Furthermore, smart contracts strengthen the entire process. Also, smart contracts make sure the transaction between the sellers and buyers only happens if it fulfills certain preset conditions.
Another issue with the traditional real estate business is that it needs to be more safe and secure. So blockchain development in real estate fixes this issue as well. Blockchain technology offers a high-security standard with the help of data encryption. So each transaction is fast and safe.
No Need For Middleman/Intermediaries
Middlemen and intermediaries have been part of almost every industry and real estate is no different. However, with the advent of blockchain development in real estate, the industry is bound to experience a smooth shift in transactions. The blockchain-based platforms will directly connect both parties, eliminating the need for a middleman. This not only helps in saving a lot of money but also helps build trust among the buyers as well as sellers. Also, it makes the entire process smooth and a lot faster by eliminating the involvement of middlemen.
Need for Hefty Money & Resources
Everyone cannot buy properties or own a piece of land they want. Mainly because one needs to have resources and a lot of money to do so. The traditional real estate system is not for everyone only because it is an expensive investment.
However, blockchain in commercial real estate lets fractional ownership. So, whereas in a traditional real estate system one requires resources and a hefty amount of money to buy a property. While the investors are also required to pool their money to gain bigger benefits. With blockchain development in real estate, investors will simply have to sign in to a trading platform to buy and sell token that meets their needs. At the same time, they can use fractional ownership to manage the properties, which is maintenance and lease.
Use Cases of Blockchain Development in the Real Estate Business
Now that we have discussed in detail the challenges in the real estate industry and how blockchain can solve them. Here are some of the major use cases of blockchain technology in the real estate industry that are quickly taking over the world.
Traditionally, sellers, buyers, tenants, investors, and owners depend upon them to list their properties and find eligible properties. Most of these platforms do not provide adequate information and charge a huge amount of subscription fees.
However, all these problems can be fixed with blockchain-based real estate platforms. These are decentralized platforms that consist of data and allow every participant to share the data in a P2P network.
Real estate tokenization is one of the major benefits of using blockchain-based real estate apps. The tokens act for a specific number of shares for a particular real estate asset that can be issued, purchased, and sold by using the blockchain platforms with cryptocurrency. This helps in improving the sales process and also decreases crowdfunding issues.
Typically, blockchain development can help transform the entire commercial real estate market as it helps in improving real estate liquidity. And that is why tokenization of real estate is a profitable use case of the technology.
The traditional real estate system is very complex, especially when it comes to managing properties with multiple stakeholders. Usually, the properties or managed through tedious paperwork or unconventional software. Thus the information is not available to everyone and stays in the database among specific groups of people.
With blockchain-based real estate platforms, management systems can be completely transformed by using smart contracts. Smart contracts can help in automatically setting up lease payments, managing cash flow, consigning security deposits, and much more.
Investing in Real Estate
Blockchain-based real estate platforms can help in facilitating the investment process through fractional ownership and tokenization which we have already discussed in detail.
In simple words, Tokenization allows the owners to provide digital tokens to all those who have a share in the property. Thus each participant can keep track of their investment using the decentralized platform. The tokenization process helps in eliminating fraudulent activities in the real estate business.
While fractional ownership is a huge benefit in reshaping the volatile industry. Fractional ownership brings interested parties together to share and remove the risks related to the ownership of highly valuable tangible assets even for small investors despite the geographical barrier.
Safe and Managed Transactions
Traditional real estate business involves a lot of risk because both the parties involved do not know who you are dealing with.
However, with blockchain development in real estate, you do not have to deal with the middlemen. Thus blockchain makes the transaction faster and safer for everyone involved on the platform. Moreover, blockchain technology can be useful in proving that the parties have sufficient funds to carry out the transactions for rental as well as purchases.
With the involvement of blockchain in the real estate industry, financial transactions will be safer and more transparent. Moreover, all of the payments will be stored in the distributed ledger network so anyone can come back and check them whenever they want.
Conclusion: Blockchain in Real Estate
Real Estate is one of the major industries that has received blockchain technology with open arms. Thus with each passing year, blockchain development in real estate is becoming more prevalent. In this article, we have discussed in detail how implementing blockchain solutions in the real estate business can ease the overall experience for both parties. Thus the future of the real estate industry is bound to bring transforming changes to this industry.
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