From property management to fractional ownership: blockchain use cases for real estate

In recent years, blockchain and cryptocurrency have made significant developments into various industries, including online gaming and travel. And real estate is no different. 

There are various use cases for the blockchain technology: automating operations with smart contracts, securing rights and titles in the blockchain and NFTs, and tokenization of properties. Another prominent development is the use of cryptocurrencies for buying real estate, which offers an alternative to traditional legacy methods with national currencies and wire transfers.

In this article, we explore how crypto payments are changing the real estate industry globally, the benefits they offer to both buyer and seller, and the emerging trends shaping the future of this sector.

Use cases for blockchain in real estate

Blockchain and cryptocurrencies have several primary use cases on the property market:

1. Automation of operations. Most modern blockchains feature complex algorithms called smart contracts, able to automatically perform a sequence of operations with financial and business logic. Because these contracts are self-executing with predefined conditions, they reduce transaction costs and processing times, as well as remove the need for intermediaries like brokers or lawyers. Smart contracts can handle rental agreements, sales, and even fractional ownership​.
2. Payments for properties. Nowadays, there is a growing number of traditional property management firms that accept cryptocurrencies like Bitcoin or Tether for buying real estate. Crypto payments offer faster processing times regardless of buyer’s and seller’s location, and overall less transaction costs, making it easier for customers and investors to acquire real estate without dealing with currency conversions or technical loopholes of banks.
3. Property title management. Blockchain provides a tamper-proof ledger for storing and verifying property titles, ensuring transparency and reducing fraud. Property records stored on a blockchain cannot be altered or forged, streamlining the title verification process​. 
4. Property management and rentals. Blockchain can simplify property management by automating rental contracts and payments using smart contracts. Tenants can pay rent in cryptocurrency, and landlords can use blockchain to track payments, maintenance, and legal agreements​.
5. Tokenization of real estate. Tokenized real estate allows for fractional ownership by converting physical properties into digital tokens, thus enabling more people to invest in real estate by purchasing small shares of a property. Ultimately, it enhances liquidity in the traditionally illiquid real estate market. Investors can trade these blockchain-based tokens, making real estate a more accessible asset class​.

Blockchain companies in real estate

Currently, there are a few web3 startups working on bringing the blockchain technology to the real estate market:

1. Propy. It is one of the most well-known blockchain-based platforms focused on real estate transactions, which utilizes smart contracts to automate the process of buying and selling properties. Through Propy, buyers and sellers can securely manage the entire transaction digitally, from signing contracts to recording the title on the blockchain.
2. Ubitquity. While primarily focused on title management, Ubitquity also supports property transactions using blockchain technology. It offers a platform where real estate transactions can be executed through smart contracts, streamlining the purchase and sale process by automating documentation, payments, and ownership transfers.
3. RealT. This is a platform for tokenizing real estate, facilitating fractional ownership and expanding property investment opportunities. Through smart contracts, RealT automates the distribution of rental income to property token holders. This system allows users to purchase property shares easily, receive payments automatically, and track property ownership on the blockchain.

How to buy real estate with cryptocurrencies?

Even though there are disruptive projects employing blockchain technology, the real estate industry is still mostly represented by “traditional” companies like property developers and real estate agencies. At the same time, most customers still prefer to store their property titles in common systems like national registries.

Because real estate is a highly regulated market that usually involves large-size transactions and numerous legal procedures, companies prefer to integrate ready-made crypto payment solutions rather than developing software by themselves.

These solutions differ depending on the region and country. For instance, BitPay, the most popular crypto payment provider in the United States, has information about integrations with several US-based property management companies on its website, such as Burnet Title and Guaranty Escrow.

Some agencies also offer buying properties for crypto in the European region and surrounding countries. Portugal is being called as one of the most suitable countries to buy real estate with crypto.

One online website for selling properties called Crypto Emporium specializes in real estate of the United Kingdom, Italy, and Portugal, but also has offerings listed in other European countries like Spain, Germany, and Greece. This website accepts payments for housing in Bitcoin. 

Another aggregator website, Crypto Real Estate, has listings from all over Europe, including France, Cyprus, Serbia, allowing its users to purchase apartments and detached houses using cryptocurrencies.

A real estate agency called TEKCE deals in properties in Turkey and Spain, also accepting crypto payments, among other methods.

How can real estate businesses start accepting cryptocurrencies?

For companies of the real estate market, implementing a crypto payment gateway is the  most efficient and seamless way to adopt cryptocurrencies.

Choosing a crypto payment provider

The biggest advantage of a crypto payment gateway is the ability to avoid the need of building complex technical infrastructure, which is especially critical for small and medium enterprises working on the real estate market. Gateways are made by crypto payment providers like Cryptonix, which simplifies the process of integrating and processing crypto payments for businesses, especially those operating in the European Union. 

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There are several advantages of choosing Cryptonix as the platform for crypto payments:

1. Security and compliance. Cryptonix handles the technical aspects, ensuring that payments are secure, verified on the blockchain, and compliant with local regulations.
2. Efficiency. Crypto payments made through Cryptonix reduce transaction times and avoid the fees and delays associated with traditional bank transfers, especially international.
3. Wide range of supported crypto assets. Cryptonix offers payments in the most used cryptocurrencies: Bitcoin, Litecoin, Ethereum, USDT, USDC, and others.
4. Global reach. Accepting cryptocurrency for business opens the door to international investors who prefer to transact in digital assets, removing barriers such as currency conversion fees and banking delays.

Crypto invoices vs. website payments

For real estate, crypto invoices are far more practical than direct website payments. Real estate transactions are complex, often involving multiple legal checks and approvals before the final payment is made. Given the large sums involved in property transactions, using crypto invoices provides a more tailored and secure process.

With Cryptonix, real estate agencies can generate crypto invoices directly from the business crypto wallet, which is provided free of charge to all the platform users. This allows a sales manager to create detailed, legally compliant payment documents that can be sent to clients via email or a direct web link. A crypto invoice is valid until the due date, which is set by the issuer.

Each crypto invoice made with Cryptonix crypto wallet for business contains vital transaction details, such as:

• Name of the payee and recipient.
• Payment breakdown (amount due, taxes, fees, etc.).
• Amount to be paid.
• Due date.

These invoices are web pages that can be accessed via a link, simplifying the process for clients who may not be familiar with cryptocurrency transactions. The payment page offers a user experience similar to traditional bank transfers, ensuring a smooth transition for businesses and clients moving into crypto payments.

Conversion from crypto to fiat

Another key feature of the Cryptonix business crypto wallet. It is essentially a crypto-fiat wallet with the ability to convert cryptocurrencies received as payment into fiat currencies like U.S. dollar or euro. This feature is particularly valuable for real estate businesses dealing with volatile digital assets, as it allows them to mitigate the risks associated with fluctuating crypto prices. Businesses can convert their crypto holdings into fiat at any time and withdraw the funds directly to their bank accounts. 

Additionally, Cryptonix offers an auto-conversion option, allowing users to automatically convert crypto payments to their preferred fiat currency as soon as the transaction is completed. This ensures that businesses can lock in their value at the time of the transaction, avoiding potential losses due to price volatility while enjoying the benefits of crypto payments. This flexibility gives real estate companies greater financial control and stability when dealing with crypto assets.

Conclusion

Blockchain and cryptocurrency are transforming the real estate industry. Smart contracts automate real estate operations and transactions. Blockchain-based title management provides a tamper-proof, transparent way to store and verify property ownership. Tokenization enables fractional ownership of real estate, allowing investors to purchase shares in properties.

Crypto payments and invoices is another way for traditional businesses to adopt blockchain technology. Cryptonix offers real estate companies the opportunity to accept cryptocurrencies by taking care of the entire payment process with its platform.

By creating and sending crypto invoices via Cryptonix business wallet, real estate businesses can easily manage large, complex transactions while maintaining a user experience similar to that of traditional fiat payments. This approach allows companies to focus on their core operations while leveraging the benefits of cryptocurrency in a secure and streamlined way.

If real estate companies will embrace these solutions, not only will they be able to streamline operations but also unlock new opportunities for investment and growth.