Real estate has been a hot topic in the blockchain world recently. All that buzz is because of the potential for fractionalized ownership and other unique benefits of using blockchain technology.
You may be wondering: Is it possible to buy and sell real estate using NFT as a currency? Read more on what our team of experts has to say about Real Estate NFT.
What are Real Estate NFTs?
Real estate NFTs are a type of non-fungible token that you can use to represent ownership or fractional ownership in a property.
NFTs are stored on a blockchain and can be bought, sold, or traded like any other cryptocurrency. However, unlike other cryptocurrencies, each NFT is unique and cannot be divided into smaller units.
Based on what our experts have to say, NFTs are well-suited for representing ownership of physical assets like real estate, artwork, or collectibles.
Digital Real Estate vs Physical Real Estate
Digital real estate could mean virtual spaces in ‘the metaverse’ where people can interact and transact without any government or financial institution involvement.
Real estate NFTs also have limited parcels, creating a scarcity similar to how it works in a physical setting. Platforms like Decentraland own 90,601 plots and are currently trading as LAND. Interested buyers and sellers can purchase plots of virtual land using MANA.
Our investment experts have handled several assets involving blockchain technology. In the case of Real Estate NFTs, buying and selling digital real estate is much more accessible than dealing with the traditional real estate market.
Advantages of Real Estate NFTs
There are many potential benefits to using Real Estate NFTs. For example, you could use them to represent fractional ownership in a property, which would make it easier for people to invest in real estate without having to buy a whole property.
Another potential benefit is that Real Estate NFTs [1] could be used to create new financing models, such as cryptocurrency-backed mortgages.
Real estate NFTs also eliminate the need for third-party intermediaries, such as real estate agents, which could make buying and selling property cheaper and faster.
Disadvantages of Real Estate NFTs
Despite all the good things we have to say about this innovation, some challenges still need to be addressed before digital real estate can become a mainstream investment.
It’s not uncommon for our investment professionals to get queries about NFTs. Besides, real estate NFTs are still in their early stages and may not be acceptable for most. A lack of understanding and regulation could potentially lead to scams.
Furthermore, Real Estate NFTs are still subject to the same volatility as other cryptocurrencies. The value of an NFT can go up or down very quickly, making them a risky investment.
Should You Invest in Real Estate NFTs?
NFTs are still investments that require some expertise and knowledge about this technology. From our years of handling exotic investments such as NFTs, we highly believe that anyone looking for investment opportunities should always do their research first.
Real Estate NFTs do have the potential to revolutionize the way we buy and sell a property. They could make it easier and cheaper to invest in real estate, and they offer some unique benefits that traditional methods don’t provide.
The Future of Real Estate NFTs
Gaming
The gaming industry has already paved the way in revolutionizing the way gamers enjoy and earn money through gaming platforms.
Axie Infinity is one of those platforms where digital creatures, also known as ‘Axies’, are being sold as NFTs. Players can battle, breed, and sell their Axies on the Ethereum blockchain in the game.
Businesses
Real estate NFTs are also available on platforms like NFT Drops. Aside from artisans, this platform provides opportunities for businesses like buying and selling real estate to be done all on one site.
Our experts agree that this is a space to watch out for as Real Estate NFTs have a lot of potential for businesses, not just in the way that we use them now but also for other applications.
Virtual Places and Metaverse
One of the most talked-about use cases for Real Estate NFTs is in the virtual world. Decentraland, The Sandbox, and Cryptovoxels are some platforms that allow users to own a virtual plot of land that they can develop however they want.
We foresee using these virtual places for everything from hosting online events to setting up virtual shops in the future.
Conclusion
As Real Estate NFTs become more popular, we’ll likely see more platforms and use cases emerge. We’re looking forward to exciting times to get involved in this space and to watch this technology develop.
