Blockchain is an exciting new technology that’s revolutionising the real estate industry in ways never imagined.
From changing the way we find a property to buy, to how we manage tenants, and of course how we invest, blockchain is revolutionising the world of property.
Read on to learn more about its game-changing applications:
1. The Property Search Process
When it comes to listing a property to sell or searching for one to buy, most people to use third-party platforms to find what they’re looking for.
Apart from the pricey subscriptions needed to list your property, the information offered when you’re looking for one to buy is often incorrect or even incomplete.
Blockchain has the answer.
The technology makes it possible to create a property database that’s decentralised.
This means that there isn’t one main authority in control. It also distributes information on a peer-to-peer network which speeds up the transfer of data.
While the simplifying of processes makes accessing listing data much cheaper and more accurate, when you choose to list a property you also control your own data. Your information is encrypted and stored on a blockchain and only you can control it.
2. Property Management
Finding the right tenant for you or your client’s home is tricky.
Agents and landlords have a tendency to rely on the opinions of others when choosing a suitable tenant. This can be risky as other agents and landlords may want to get rid of a tenant causing them trouble by passing them off to you.
Some agents try to avoid this by only accepting a tenant if they can see the trust ledgers from their previous managing agents.
This is a good solution because these ledgers are largely resistant to outside modification, but there’s still the issue of trust ledgers not being decentralised or open-source.
Thanks to blockchain, you can use a distributed ledger to accurately screen potential tenants based on criteria that are relevant to you.
You could check things such as a record of their rent payments to make sure they regularly pay rent on time, or even court hearing data to see if they might cause problems later down the line
No matter how experienced you are in purchasing real estate, the long and complicated transaction processes can frustrate even the most seasoned real estate investor.
Blockchain however has introduced smart contracts.
These contracts can dramatically decrease the time it takes to buy and sell a property. This is because certain parts of the transaction can be automated, while some activities that are normally required to be completed by a third-party can be streamlined.
The way you can invest in property has also changed.
Blockchain has been used to tokenise different types of assets so you can invest in a much smaller percentage of the underlying asset.
The Piptle team has even taken this a step further and tokenised the mortgages of properties, which are financially underwritten by the right to the lease/rental earnings. The cool thing is that this can be done to all sorts of properties from childcare centres to strawberry farms, allowing you to own the right to the lease earnings of a property for up to 20 years, 1sqm at a time.
Blockchain has proven to be the driving force of countless innovations across many industries, and real estate is no exception.
Decentralised property listing databases have brought greater accuracy and security when it comes to listings data, while distributed ledgers are helping landlords and property managers to find higher quality tenants.
But perhaps the biggest impact blockchain has had is on investments. Smart contracts are speeding up the sales process of real estate transactions, and the tokenisation of rental income has been another recent innovation.
How has blockchain changed your industry? Let us know in the comments below.