Investing in Real Estate: 10 reasons to use crypto to acquire a property

Real estate is a growing industry that attracts a significant number of investors, looking to diversify their portfolio or to simply make less risky investments. Using crypto is increasingly seen as a smart choice for a great deal of holders, as they prefer to apply a typically volatile asset to acquire a safe one.

The global real estate market is expected to reach 634.90 trillion US Dollars by 2024 and to grow at an annual rate of 2.77% (CAGR 2024-2029), resulting in a market volume of 727.80 trillion USD by 2029, according to Statista. 

There is an enormous potential for real estate investments worldwide, with the US dominating the real estate exchange market of property exchanges. However, we are also seeing emerging markets such as Southeast Asia and LATAM, which are notorious for their quick-evolving urbanization, affordable prices, incredible lifestyle, great quality of life, and crypto-friendly environment.

How crypto plays a key role in real estate

Cryptocurrencies are growing at an astounding rate. As they become more embedded in our daily lives, they are now used not just as an investment product, but also as a way to purchase real-world assets.

As we explored in this article, there are several ways an investor can use crypto to access a group of real-world services and products. However, real estate is now more prominent as it becomes more and more appealing to people with significant patrimonial value, looking to diversify their investments in a smart and safe way.

A 2023 survey by Deloitte found that 37% of real estate executives believe blockchain will have a significant impact on the industry within five years. 

10 Reasons to use crypto in real estate

Several countries allow investors to use crypto to purchase real estate properties. For example, Portugal has registered its first transaction in May 2022. According to this article by Elyseeum, this was a historic moment for the blockchain community in the country.

Another successful and widely known use case is the Miami luxury penthouse acquired for $22.5 million, paid in crypto, making Miami one of the growing hubs for the cryptocurrency market, according to Business Insider.

In our article, we’ll explore 10 main reasons why crypto holders should invest their on-chain portfolio in a secure asset such as real estate:

1. Peer-to-peer transactions

‍Crypto enables peer-to-peer transactions, which eliminates the need for bureaucratic intermediaries such as banks or brokers. Buyers can use digital currencies, such as Bitcoin or Ethereum, and even stablecoins, like USDC or EURC, to buy residential and commercial properties in crypto-friendly countries. This method is becoming particularly popular in luxury real estate markets and among experienced investors who prefer not to convert their crypto holdings into fiat currency before completing the transaction.

2. Lower transaction costs

By eliminating intermediaries, the usual transactions made in these processes for players such as banks, brokers, and escrow agents are now eliminated as well. As using crypto or stablecoins allows for direct payments, these middlemen don’t need to be involved in the purchase, which means fees are largely cut, and overall costs are much lower than regular traditional fiat payments, creating savings for both buyers and sellers.

3. Enhanced security and transparency

‍All transactions on the blockchain are immutable by nature and recorded on a distributed ledger that is accessible to all participants in the network, which means they are tamper-proof. This reduces the risk of fraud or disputes, as all parties are aware of all the details of the exchange, which means it is simply not possible to defraud buyers through double-selling or title fraud. 

4. Increased privacy

‍Despite blockchain transactions being recorded and verifiable, the anonymity of all players involved is ensured by the use of a pseudonym and number identifiers enabled by on-chain registration. This type of privacy is considered to be very useful and attractive to discrete individuals who prefer to keep their investments off the radar and ensure the integrity of their portfolios.‍

5. Increased transaction speed and efficiency

‍Unlike traditional banking transactions, cryptocurrency payments, usually facilitated by platforms such as Skyline Digital, are inherently fast and smooth, which can accelerate real estate deals by several months. Since all transactions are registered on the blockchain, there is no need for additional paperwork and other bureaucratic processes. This means increased efficiency for everyone involved, while ensuring the safety and security of all assets being traded, and turning the usual lengthy process into a streamlined one.‍

6. Smart Contracts reinforcement

‍Smart contracts are an integral part of blockchain transactions, created in order to ensure they are self-executing and in accordance with the terms of the agreement made by all parties involved, which become registered on-chain. This also reduces the need for intermediaries in the sale process, streamlining and accelerating the deal while ensuring that all parties fulfill their end of the bargain.

7. Cross-border transactions‍

Cryptocurrencies are especially useful for cross-border real estate transactions, making it easier for an investor to select properties from a worldwide pool of available properties. The process becomes simplified, and transaction fees are largely reduced, eliminating the need for intermediaries. This is particularly appealing to international investors looking to diversify their portfolios in more than one country.‍

8. Increased tokenization and liquidity‍

Crypto investing is becoming widely known for its ability to tokenize real-world assets, as we’ve explored in this article before. Real estate is no exception, with more properties becoming a liquid asset class, allowing investors to easily buy and sell shares of properties. This increased liquidity could attract more investors to the market, particularly those who have traditionally been excluded due to high entry costs. Tokenization could also enable 24/7 trading of real estate assets, similar to how stocks and cryptocurrencies are traded.

9. Fractional ownership

‍As the market evolves and adapts to a more decentralized scale, investors will be able to buy fractions of real estate tokens, instead of purchasing the entire property in a single transaction. This means that the real estate market will approach the functioning method of what we know today as the stock market.‍

10. Alternative financing

‍Cryptocurrencies are also being used for alternative financing methods in real estate, such as crypto-backed loans. Investors now use their crypto assets as collateral to obtain fiat loans and use them to purchase interesting properties. Additionally, blockchain-based crowdfunding platforms are emerging, allowing multiple investors to pool their resources to fund real estate projects using crypto, thereby democratizing access to real estate investments.

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As real estate crypto transactions become more and more common, the need for payment platforms will increase. Skyline Digital is positioned to meet the needs of crypto investors by facilitating smooth and secure transactions for real estate purchases and other real-world assets. 

Our platform allows you to integrate with new technologies and DeFi tools while maintaining the flexibility to hold, liquidate, swap, or employ your assets for real-world purchases within the Skyline Digital universe of top-notch banking features. We ensure 24/7 support for all your queries and specific requests while granting the safety and privacy of your portfolio as a self-custodial solution.

We also provide our customers with a wide range of additional features, such as crypto to fiat loans, on-ramping, crypto to fiat payments, virtual IBANs, OTC trading, and much more, turning our platform into an all-in-one solution.

Learn more and join us today by signing up here and completing the onboarding KYC / KYB process.