Overview of Real Estate Tokenization

The process of real estate tokenization involves converting a real estate asset into a token on the blockchain and putting it for sale. You can also create tokens for properties under construction. These tokens represent an interest in real estate or can work to raise capital for investment development. The latter process attracts a broader range of visitors and developers to participate or invest in real estate.

Real estate asset tokenization is a way for a business or an organization to raise capital from crowd sales. The process works similar to crowdfunding, but here it involves tokens available on the blockchain.

Real estate tokenization aims to fulfil the objective of making the funding accessible to a broader audience. The purpose of the tokens here is to act the role of stocks in a company. Users can purchase these costs and not rely on expensive intermediaries. This investment method may overtake and replace stock exchanges due to the latter’s expense and complexity.

A company can use a token as a loan, share, or owner of a specific property.

How to Tokenize Real Estate?

Typically, the real estate tokenization process follows these steps.

1. Identifying the Asset – Here, the company recognizes the commercial real estate asset. The process typically involves purchasing, financing and appraising

2. Generating Smart Contract – Now, the company follows the required securities laws and generates the smart contract.

3. Token Generation – Here, the company decides on the type and number of tokens to generate. The company then lists these tokens on a specified exchange platform.

4. Distribution and Marketing – Now, the company advertises the tokens and lists them on an exchange. The company utilizes a security token offering or STO to list the tokens

5. Post support – Here, the company provides additional support to the investors

The real estate tokenization process utilizes blockchain, removes the reliance on intermediaries and significantly reduces the investment requirements. This approach could unlock trillions in liquid global real estate assets. It also makes these assets accessible to a broader investor group on an open marketplace.