Skip to Content

Cryptocurrency and the Future of Real Estate Investing

Raleigh Court Investor Using a Tablet to Buy Property with CryptocurrencyAs technology evolves, the real estate market is under pressure to evolve. Promising technologies and methods of buying and selling rental properties have already revolutionized countless facets of buying investment properties. For some, these innovative procedures have only just begun. One of the emerging technologies that a great deal of real estate investors is keeping a close eye on is cryptocurrency.

Although still in the incredibly early stages, an increasing number of real estate transactions are completed using cryptocurrency every month. As using cryptocurrency to buy or sell property becomes more widespread, it is important to know what it is and how it may affect rental real estate investors like you.

Cryptocurrency Defined

Cryptocurrencies, like Bitcoin and Ethereum, are digital currencies. These currencies vary from other kinds of currency in that they do not rely on a central bank or administrator – they can be transferred directly from one user to another. These transfers take place on a cryptocurrency network that verifies each transaction through incorruptible network nodes and are then recorded in a digital public ledger called a blockchain.

The idea behind cryptocurrency is to improve a transaction’s efficiency and safety and reduce the risk of fraud. Since all cryptocurrency transactions are open to the public, there is enhanced transparency. And, since the data in the blockchain isn’t vulnerable to corruption, information can be verified faster and more safely than through previous methods.

Automating Real Estate Transactions

There’s no doubt that the potential of cryptocurrency has by now captured the imagination of many real estate investors. And, many can see how that cryptocurrency could change nearly every stage of a real estate transaction. Someone could easily check on the status of deeds, access the full history of a property, and more when using blockchain. Banks, real estate agents, buyers, and sellers would all have access to the same verified information.

Transmitting data between all parties in a transaction would be faster and safer, and transfers of funds would happen immediately. All of this could dramatically reduce the amount of time between a preliminary sales agreement and finalizing the transfer of title.

The Power of Three

The real advantages of using cryptocurrency to invest in real estate come into focus when combined with the affordances of smart contracts and blockchain. Smart contracts are digital agreements programmed to conduct transfers once certain conditions are met automatically. So, using a smart contract and cryptocurrency, all the parties involved could receive the fund due to them the moment a property is sold. Attorneys, appraisers, real estate brokers, and so on would all be compensated through an instant transfer of funds. Every transaction would have been automatically recorded in the blockchain, generating a transaction history that is both publicly accessible and stored indefinitely.

Title deeds, surveys, ownership information, and other information would be available in real-time to all parties, allowing instant validation. It is not difficult to see how carrying out real estate transactions this way will ultimately change almost everything about real estate investing.

The Future is Now

While buying and selling investment properties using cryptocurrency is still not that common in the Raleigh Court rental market, there are instances where properties have already changed hands via digital currency. One noteworthy example is the recent sale of a penthouse in Miami Beach, which sold for $28 million in cryptocurrency. The deal took less than ten days to close, which is essentially unheard of via traditional methods, even for a cash buyer.

 

Would you like more expert advice about purchasing investment rental properties? Contact us online or by phone at 540-595-7411.

We are pledged to the letter and spirit of U.S. policy for the achievement of equal housing opportunity throughout the Nation. See Equal Housing Opportunity Statement for more information.

The Neighborly Done Right Promise

The Neighborly Done Right Promise ® delivered by Real Property Management, a proud Neighborly company

When it comes to finding the right property manager for your investment property, you want to know that they stand behind their work and get the job done right – the first time. At Real Property Management we have the expertise, technology, and systems to manage your property the right way. We work hard to optimize your return on investment while preserving your asset and giving you peace of mind. Our highly trained and skilled team works hard so you can be sure your property's management will be Done Right.

Canada excluded. Services performed by independently owned and operated franchises.

See Full Details