How To Earn Fixed Income On Commercial Real Estate With Blockchain

2/10/2023, 5:03:04 AM - Henry Ibok
How To Earn Fixed Income On Commercial Real Estate With Blockchain

The majority of crypto investors are familiar with the term “blockchain.” It has been reported that this year’s potential global spending on blockchain solutions might be close to $12 billion.

Currently, major corporations are integrating blockchain into their infrastructures for a variety of sectors, including food, retail, insurance, government services, banking and finance, healthcare, and now real estate. 

Key Takeaways

 • Blockchain technology eliminates the need for being in-person for real estate transactions.

 • The added security of the transaction enables investors to sign contracts and transfer funds while being anywhere in the world.

 • Public transactions will eliminate secrecy from the industry making it possible for the public to see most cryptocurrency transactions.

 • A public record of transactions will enable investors in the commercial real estate industry to be more informed about market trends, allowing for better decision-making.

Based on recent stats nearly 3% of people worldwide use blockchain.

Many businesses understand that blockchain is the technology of the future. Businesses will save costs with blockchain, enhance security, safeguard customer data, and improve the efficiency, dependability, and transparency of real estate transactions.

For investors, tokenized real estate is a method to boost liquidity and diversify their investment portfolio.

But for most investors, how to earn fixed income on commercial real estate with blockchain is a major question that needs answers. And this post contains some valuable answers you need to know.

How Commercial Real Estate Works with Blockchain

Commercial real estate (CRE) can be purchased and sold using cryptocurrencies in smaller increments thanks to blockchain-enabled real estate.

Subsequently, utilizing distributed ledger technology, these real estate investment transactions are grouped, processed, and joined into “blocks” that are then encrypted.

And so, using a decentralized ledger to track, record, and connect real estate information is all that a blockchain in real estate can do.

Due to its decentralized nature, neither the end-to-end system nor the individual real estate transactions—known as security tokens linked with a real estate asset—that are kept as blocks of data, are under the control of a single organization.

These real estate assets on the blockchain can be traded, bought, or sold using cryptocurrencies.

See Also: 10 Best Blockchain Apps you need to know.

Benefits of Blockchain in Real Estate

With a method to fundamentally replace how technology interacts with physical assets while more effectively connecting buyers, sellers, intermediaries, and real estate transactions, blockchain-enabled real estate changes the conventional real estate business to something more unique.

The advantages of blockchain-enabled real estate include:


Real estate powered by blockchain connects buyers and sellers online in real-time, enabling real estate trading across platforms and markets.


Real estate investing can be rethought with the help of blockchain technology, which frequently increases investment liquidity and trading accessibility, making it more similar to the process of buying and selling equities (depending upon the terms of the investment smart contract).


To support underlying real estate industry transactions, procedures, and operations, real estate professionals will increasingly rely on the effectiveness of real estate transactions made possible by smart contracts.


Blockchain real estate, which is built on the cutting-edge technology and smart contracts of the blockchain, provides transparency, security, and enhanced liquidity while giving developers and investors unparalleled access to global real estate investment assets.


Beyond only real estate property investing, blockchain-enabled real estate offers better access to a variety of primary and secondary real estate investment opportunities. Investors now have access to a wider range of choices thanks to the rise in real estate investment prospects.


Through automation, blockchain technology and distributed ledger technology will steadily cut the cost of processing real estate. Buyers, sellers, and intermediaries may more easily audit contracts, handle payment disputes, confirm ownership, process rent payments, and more efficiently conduct real estate transactions thanks to blockchain technology and smart contracts.

How To Earn Fixed Income On Commercial Real Estate With Blockchain

How To Earn Fixed Income On Commercial Real Estate With Blockchain

By purchasing security tokens linked to a property, you can invest in tokenized real estate using blockchain technology. You can partially own a building or other piece of commercial real estate via tokenization.

You are purchasing real estate that has the potential to be a more liquid asset when you purchase tokenized real estate.

Additionally, you can have great access to liquidity and be a partial owner of real estate property or properties without having to invest at the multi-million dollar level.

While there isn’t a single location where you can or should invest in blockchain real estate, you should carefully weigh your options and choose the one that most closely aligns with the kind of property you want to purchase, your financial objectives, and other factors.

The three fundamental ways to earn fixed income on commercial real estate with blockchain

• Direct Blockchain/cryptocurrency purchase

In most countries, you can use cryptocurrencies to buy and directly own real estate. The real estate seller must have a compatible digital wallet and be willing to take digital currency.

Access to finance may be altered or restricted if cryptocurrency is used to purchase real estate in the United States.

Although fintech lending platforms are emerging to allow investors to collateralize conventional down payment loans with cryptocurrency, in general, investors or home buyers cannot utilize cryptocurrencies for a property’s down payment. Prospective homebuyers can obtain cryptocurrency-collateralized mortgages from platforms like Milo.

There are special benefits to buying real estate abroad with cryptocurrencies.

The possession of real estate can grant residency or citizenship status in some nations, such as Montenegro and St. Kitts.

With Bitcoin ATMs located all across the nation and no capital gains taxes on all investments, including cryptocurrency, St. Kitts is known for being particularly crypto-friendly.

No matter where the real estate is located, immediately purchasing it with cryptocurrency may result in tax repercussions. Digital asset sales and transfers are typically taxable entities.

• Real estate token

By purchasing blockchain-based real estate tokens, investors can gain access to real estate offerings.

Using either digital currency or conventional currencies, investors can fund their purchases of certain token investments that correlate with particular properties.

Direct ownership of real estate is granted to investors who hold real estate tokens, and there are few limitations on the trading or sale of these tokens.

Real estate that has been tokenized is typically fractionalized, with each token denoting a portion of the property’s ownership.

Real estate that has been fractionalized may resemble the real estate shares sold through conventional crowdfunding platforms and may be more affordable for investors.

The efficiency, transparency, and security that come with blockchain technology are extended to fractionalized real estate investing through the tokenization of real estate.

• Real estate Blockchain/Cryptocurrencies

By purchasing cryptocurrencies with a real estate focus, investors can increase the real estate exposure in their cryptocurrency portfolios.

These purchases can be made with coins already in circulation or coins that will shortly be released, frequently through an ICO (ICO).

Several cryptocurrencies employ a variety of schemes to make money from the real estate sector. Here are a few instances:

BM Tokens: By making investments in real estate with high yields, the BM Token aims to add value. The BM Token founders choose the particular properties, and any earnings are reinvested in coin buybacks and additional real estate investments.

RET: This coin enables peer-to-peer real estate transactions for both commercial and residential properties by supporting a decentralized rental market.

Quarteria: The decentralized real estate database for both domestic and foreign listings is supported by the Quarteria coin. On Quarteria, listings are democratically managed by both buyers and sellers.

See Also: All you need to know about Blockchain Wallet Fees

Final Thoughts

The technological development of blockchain technology and the framework for tokenizing commercial real estate used by businesses can radically alter the real estate sector and improve institutional investors’ real estate investments.

Blockchain technology, in particular at this moment, presents itself as a beneficial tool for asset managers, allowing them to digitize their portfolios and swiftly generate liquidity if necessary, all the while being able to successfully engage in the lucrative real estate market.

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