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Of all investment asset classes, one that has continued to perform over the long term is real estate. It is deemed one of the most lucrative investment opportunities for building wealth and continues to attract a new generation of investors. And, much like other industries, real estate investment has evolved.
Advancing technologies have made a difference in almost every sector. With regards to real estate, construction techniques have improved, maintenance operations have evolved, and the property has been streamlined. For investing, technology allows for tokenizing real estate investments opening up opportunities for retail investors previously reserved for institutional investors.
To put it simply, a real estate token is a digitized share. A token could represent collateralized debt, equity, or a portion of the income stream. Different properties can be tokenized, like commercial real estate, residential property, hotels, retail, etc.
Unsurprisingly, hotels differ in many ways from other real estate properties. Hotels have a heavy operational aspect and depend on daily guests to determine profitability. Typically, in hotels, it is a one-night lease compared to a one-year lease for apartments or a 10-year lease for office property. As a result, hotels are highly sensitive to market changes since they price daily and, thus, should be treated as such. Furthermore, to remain relevant, hotels must upkeep capital and operational improvements quicker than other sectors.
Since it is driven by Blockchain technology, tokenization eliminates the unnecessary expenditure of notary fees and bank fees. Investing with tokens can reduce costs and gain greater freedoms since you can buy real estate shares at any time and potentially profit from them.
With traditional real estate investment, significant capital is locked into an entire property. This, in turn, reduces the possibility of diversification. With tokenization, investors can commit smaller amounts of capital to various assets with potentially less complicated shareholding structures.
Tokenization allows for both security and transparency in transactions. KYC / AML can be programmed into the token for securities regulation transparency. Tokens can trade with only whitelisted participants meaning the tokens can’t be hacked because there is a record of who owns which token. Information can be shared on the blockchain that gives parties clarity to the value. Current financial information could be linked to the token to give real time data.
With the growing popularity of real estate tokenization, investors are also seeking to experiment with this model with other properties. The tokenization of hotel real estate has emerged as a favored investment model. Although the pandemic has impacted the hospitality industry, the recovery of world economies has spurred hotel demand. Much like real-estate tokenization, hotel tokens offer a flexible investment opportunity to investors. Since the adoption of digital assets has skyrocketed in the past few years, tokenized reaal estate assets are following in their footsteps.
With the growing popularity of cryptocurrencies, tokenization has become an attractive investment opportunity in the real estate sector.
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GREATX by invitation ONLY:
Limited Tokens and Limited Subscribers.
GreatX tokens are issued only by invitation. The invitation is issued only to 11,000 subscribers across the globe, to participate with a limited number of Hotel Rooms across the United States.