The real estate market is slowly experiencing a crypto makeover. Properties are being listed for Bitcoin and Ethereum, among other cryptocurrencies. But the most innovative ideas that are set to disrupt the real estate market are not about payment options for rent or mortgage.
Meridio – Ownership on the Blockchain
Brooklyn-based Meridio (formerly Pangea) is initiating an experiment that could upend the real estate market in New York, changing the rules of play, the players and wealth distribution. New York has notoriously high rents and expensive real estate, pushing Millennials to other cities altogether or into New York closets-turned-bedrooms. Meridio is trying to redesign the market by introducing blockchain to manage and store the paperwork required for a real estate purchase and transferable digital tokens that represent ownership. The model will allow separate parties to share ownership of a single property. Transfer of ownership will be managed by smart contracts on the Ethereum network.
Meridio is testing the idea on a single property in Brooklyn located at 304 Troutman Street. Built in 1931, the Bushwick building has five units and three stories. It is currently owned by eight investors who will all be issued ERC20 tokens containing all of the information of their real estate stake. They’ll be able to track their investments in the property on the blockchain, selling their stakes or smaller fractions of their stake.
Anyone who wants to join the democratized future of fractionalized real estate ownership on the blockchain can sign up at Meridio.co.
If successful, the new model could change the entire industry by allowing seasoned buyers, first-time buyers and investors to crowdsource enough capital to purchase a single expensive property. A buyer could also use the model as a way of building wealth, accumulating fractional ownership instead of waiting and hoping to attain large sums of capital to make a first-time real estate purchase. Meridio tokens will ensure dividends, including payouts from rental income, and redemption and voting rights
The model would also function across borders. Swapping partial ownership of a property in Miami for a small stake in a house in Dubai, may one day be as easy as trading Monopoly cards.
Leaseum Partners – Security Tokens
Leaseum Partners, a London-based real estate investment firm, is planning to raise $250 million for a tokenized real estate investment fund, reports The Real Deal. The firm is partnering with Michael Chetrit, a principal of the New York-based Chetrit Organization, a real estate management and development services company.
The fund will issue securitized digital tokens for commercial real estate investments in Manhattan, allowing investors to own a piece of the Big Apple.
Steve Sillam, Leaseum’s co-founder and CEO, says that a tokenized fund offers a key advantage: liquidity. The tokens will also ensure dividends, including payouts from rental income, and redemption and voting rights.
A crowdsale, scheduled for third quarter of 2018, will only be open to accredited investors since the tokens will be classified as securities which are governed by SEC regulations.
ManageGo – Paying Rent with Crypto
ManageGo is an app that offers landlords and property managers the ability to manage rental payments on the go. Renters can invite landlords to join the network which supports payments in Bitcoin, Ethereum and Litecoin. For property managers, the company converts rent payments to US dollars and deposits the funds directly to a linked bank account. Tenants get an instant conversion rate with the exact rental payment amount to send in BTC, ETH or LTC.
16 Bennett – Accepting Crypto for Rent
16 Bennett is New Jersey’s first rental development to accept Bitcoin, Ethereum, Litecoin, Bitcoin Cash and other cryptocurrencies as payment. Located on Jersey City’s West Side, 16 Bennett is an upscale residence with one, two and three-bedroom units ranging from $1,725 for 697 square feet to $3,600 for 1,523 square feet. The eye-popping online 3D tour is available in VR.
Individual landlords are also making their own arrangements to accommodate tenants who want to pay with crypto, but these instances are rare. For homeowners who want to pay their mortgage in Bitcoin, it will take mainstream adoption and more revolutionary leaps by fintech specialists and blockchain experts who are working to replace legacy banking systems with cryptocurrencies and digital ledgers.
Propy – Listing Property for Sale in Crypto
Propy bills itself as the first global, multi-language real estate marketplace. It facilitates cross-border payments for blockchain-powered and secured real estate transactions around the world. The user interface displays properties around the world in trading card format to give users the feel of how easy a transaction can be. Every step of the process is digitized and recorded on the blockchain, including the signing of the title report. The idea is to make the 9-step process of buying real estate as simple as booking a room on Airbnb. Transactions are settled in US dollars, Bitcoin or Ethereum.
Since real estate is rife with reams of paperwork and multiple middlemen, from realtors to title report agents to home inspectors and mortgage lenders, streamlining the process is an ideal use case for blockchain. Several other companies, including AlphaPoint and the Peter-Thiel backed Harbor plan to use digital ledger technology to make the process of purchasing real estate more manageable and less burdensome, recording transactions and transforming valuable physical assets into tokenized digital assets.