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Tokenize Your Maui Luxury Real Estate Property for Instant Liquidity

Posted by benjamen.harper@gmail.com on May 15, 2021

What Is Real Estate Tokenization?

Tokenization is a modern financial tool that is based on the concept of blockchain technology. Blockchain Technology was developed to allow for decentralization. You do not have everything “kept” in one place. Information can be divided up into segments and sent/stored virtually anywhere there is access to the Internet. The same principal can be applied to assets. You can virtually divide an asset up and distribute it electronically. Each portion (whether you divide the asset into thirds, fifths or hundredths) can be traded on its own.

In the case of real estate tokenization, the asset we are working with happens to be a structure (your house or condo) or land. Tokenization allows a physical property to be divided into digital tokens or shares. Each token represents a fractional share in that particular piece of property.

Tokenization has opened up doorways to accessing a real estate asset in a way like never before. It has not only given investors a new tool to invest but has also given homeowners methods to capitalize on their property to the maximum potential. 

You can now trade equity in a real estate property, rental income associated with the property, and so on and so forth.

How Do You Benefit From Real Estate Tokenization?

Selling A Fraction of Your Property

It may seem impossible to sell a fifth of your home, a fifteenth or any fraction thereof. However, tokenization allows you to do just that. Something that until now has been unavailable.

Let’s say you need to renovate the kitchen but you just don’t have the funds to do so. Under traditional financial practices, the only way to do this without cash would be to have equity in the house and apply for a second (or primary) mortgage. Now, though, you can tokenize your home and generate needed income almost instantly.

For instance, if your home is worth $100,000. Through tokenization, you can divide your home into 100 tokens, having each token be worth $1000. You can then sell 5 tokens generating $5000 in income to be used for renovating your kitchen. 

Tokenization allows you to list fractional shares of your home on secondary markets. Those shares of the property are converted into digital tokens and can then be further sold on global markets.

Instant Liquidity

Traditionally, it is very difficult to have liquidity with real estate. It can take months to convert a property into cash, given the sales process, financing procurement and closing. If you tokenize your property, you immediately bring it to market where it can be bought, sold and/or traded on an international stage.

You create liquidity with real estate tokenization by buying or selling fractional ownership. Selling the fractional shares of your home can become part of an individual’s diversified real estate portfolio where they purchase fractional ownership of a diverse selection of properties.

No Intermediaries

One of the main advantages to tokenizing your property is that there are no intermediaries involved. You have no middle men to deal with. No regulatory agencies either. You do not have to go through escrow, inspections, mortgage brokers, real estate brokers or agents. You simply list your offer online and search for investors.

How Do I Tokenize My Real Estate?

Call Ben and the team at Hawaii Elite Real Estate today for more information on tokenizing your property and other real estate investment ideas.

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