As the influence and utilization of the NFTs grow over time we notice a lot of new trends on the blockchain and in the real world. One of the significant movements the NFTs are developing now is definitely the real estate NFT projects.
If you are familiar with the basics of NFTs you might realize that these non-fungible tokens might be the best solution for fast and efficient real estate purchases. Covered by smart contracts and stored on the blockchain, the NFTs offer a lot of benefits.
The real estate industry is old and moves very slowly even with massive income and even more significant investments. So, is it possible to combine fast-changing NFTs and passive real estate? Yes, it is, and we will discover how!
NFTs in the Real Estate Industry
NFTs are digital assets stored on the blockchain. They are a great way to purchase, own, and sell any property such as art, music, or even a parcel in virtual reality. But, in recent months we’ve seen some progress with the NFT utilities, and even industries such as real estate notice the potential value and benefits of NFTs.
To fully understand the real estate NFTs we need to make a few distinctions. First, you need to know that real estate NFTs can be related to digital or physical real estate. We’ll cover all the differences later.
Although the NFTs are undividable by nature there are ways to make them fractional NFTs or fractional ownership (FO). It’s a simple concept to understand if you imagine ownership as a crowdfunding platform where anyone can chip in and invest and get tokens in return. The tokens are shares in the project and each investor has the appropriate amount depending on the size of the investment.
Entire asset tokens or EA tokenization refers to purchasing and owning an entire NFT. This is easy to understand if you want to buy a Bored Ape Yacht Club NFT as art, but it’s not as easy when applied to real estate. Because of the current laws and regulations, the tokenization of property deeds is not an easy thing.
Digital Real Estate and Physical Real Estate
To further expand and better understand the topic of real estate NFTs you need to know about the two major groups of digital and physical real estate.
Digital Real Estate NFTs
Digital real estate has seen a big development since metaverses have been created and crypto enthusiasts all over the world can now join and explore virtual worlds such as Decentraland.
In the play-to-win NFT games and metaverses, everything is created as NFTs. This includes the land parcels, homes, avatars, wearables, and other items users can utilize to create immersing 3D worlds.
So, digital assets like homes, lands, buildings, and similar are considered digital real estate NFTs. You can buy land on Decentraland with their native token and with your MetaMask wallet, purchase a home and create virtual realities you and others can explore.
It’s a lucrative opportunity to own real estate in the metaverse and you can see a lot of famous companies on the maps trying to leave a mark and owning big parcels of land.
Physical Real Estate NFTs
As the NFTs evolved their use in real-world situations is becoming more evident. This is one of the reasons why so many investors and real estate companies are now looking into the possibility of making physical real estate tokenized.
There are many reasons why NFTs might help the real estate industry. This includes faster and more effective transactions, partial ownership, investing opportunities, and irrefutable history of ownership.
The physical real estate industry is just getting started with the implementation of NFTs and smart contracts, but there have been a few cases where the real estate was tokenized and sold as NFT.
The most concerning thing about this opportunity is the documentation and governmental influence on the purchase and transactions of real-life real estate. It’s not easy to make your home a digital asset someone across the world can purchase but we are definitely heading that way.
Top NFT Real Estate Companies
Now that we know more about real estate NFTs it’s worth mentioning a few platforms and companies that offer real estate NFTs. These platforms can be an amazing opportunity for you to invest in the future of real estate, but make sure to do your research and use the right tools before investing in NFTs.
Decentraland is one of the most popular metaverses in the NFT community. Users can connect their wallets and purchase the land with the native MANA currency. Once you have the parcel you can build your virtual world on it . Then add other real estate and items represented as NFTs to improve the experience.
Voxels is a platform where the users generate the experience and create realities. You can purchase real estate and add whatever features you like. You can also sell everything to other users on the marketplace.
The platform even allows users to explore virtual reality before making any purchases and even connecting their wallets.
Upland is a virtual land marketplace that maps the property market using real-world locations. Users can now exchange their acquired lands for actual US cash. Moreover, Upland allows users to cooperate with other members of the gaming community. It does so by earning money and creating new friends in-game.
Another amazing and very popular metaverse on the blockchain is the Sandbox. Users can spend the SAND tokens to purchase real estate, avatars, and wearables and create various virtual realities on the platform.
It’s one of the best and most competitive platforms now. You can see a lot of companies purchasing land on the map.
On this world-first plug-and-play platform, you may invest, sell, and manage fractional ownership of anything. For example a modest investment in an art piece or a 10% ownership in a city condo. Fraction is a new real estate business on the Ethereum blockchain. It has been fully approved by Thailand’s Securities and Exchange Commission.
Propy is one of the first companies to implement Web3.0 technology and use the NFT to represent real-life real estate objects. They make transactions easier and faster and allow users to purchase real-world properties in minutes. While the entire project is still being developed there is some major progress being made every day. However, it is one of the most promising uses of NFTs so far.
Pros and Cons of Real Estate NFTs
As with any new and exciting development in the real or digital world real estate NFTs have their benefits and flaws. It’s a good idea to get familiar with all of the information before you make any investment decisions.
- NFTs are secure and unique
- The investments are flexible
- You can make all the transactions on your own
- The transactions are faster
- There is no “middle-man”
- Fees and expenses are fewer
- You can invest in real estate on a tight budget
- The price and the marketplace for NFTs are unpredictable
- There are problems with the current law system and NFT recognition
- Partial ownership of real estate can be problematic
- The question of owner tokens and user tokens is yet to be developed
The Future of Real Estate NFTs
Real estate and NFTs collaboration are just being developed, so it’s not easy to predict what the future holds. It’s certain to say that metaverses and real estate in virtual worlds are going to have more value as the years go by.
On the other hand, real-world assets and their tokenization will take some time to be fully implemented in the laws and regulations.
One thing is for sure the NFTs will make a lot of positive changes in the future and possibly change the way we make transactions or even purchase homes, take out loans and so much more. With smart contracts and blockchain technology, the tokens are the future currency in metaverses and in real life.