Digital real estate investing has become a popular way for those that were once priced out of traditional real estate investing to gain exposure to physical markets in a cheaper way.
Digital real estate investing isn't just buying land in the Metaverse, it's also about taking advantage of the opportunities that Web3 provides by making investing in real estate accessible both financially and in terms of the process, thanks to new technology.
Millions of Americans and others across the globe are priced out of an asset class that has outperformed most others including stocks, commodities, and much more. It's time to level the playing field and make investing in real estate possible for the average person.
In the article below, we'll take a look at some of the most promising digital real estate projects that are giving power back to the people in many ways, not just financially.
Real estate investing for many people is confusing, takes too long, and is completely out of their budget. But, it doesn't need to be.
With web3 technology now upgrading many industries, it's about time the same was done for the real estate market.
Blockchain technology removes the middleman, making transactions cheaper and more secure. Technology such as smart contracts and synthetic assets allows investors to buy fractions of a property rather than buying the full thing, opening up investing in real estate to millions of people previously priced out.
Web3 technology now allows the average person an easier, cheaper, and faster way to make money from real estate investing by investing in digital real estate first.
Parcl is a digital estate investing protocol that provides exposure to real-world real estate markets. Parcl is built on Solana, one of the fastest blockchain networks currently available.
Parcl provides individuals with a way to invest in real-world locations using web3 technology. Essentially, you're given the ability to buy and sell US neighborhoods like stocks, crypto, or ETFs.
Real estate is also well-known to be an illiquid asset, which is no longer the case with Parcl, all thanks to a web3 innovation called liquidity pools. This provides investors with a way to buy and sell neighborhoods with the click of a button, anytime they like.
Parcl is a great way to take advantage of events on a macro or micro scale. As people fled the busy streets of Manhattan to quieter suburbs, Manhattan housing and rent prices plummeted, but there was no way to easily hedge against this.
With Parcl, you could have gone short on Manhattan neighborhoods and long on any promising neighborhoods in quieter areas.
If you'd like to understand more about how Parcl works, and how you could use our protocol to invest in real estate, check out our What is Parcl article
Propy is a real estate transaction platform that utilizes blockchain technology to ensure real estate transactions are secure and fast, the complete opposite of the traditional system of buying or selling property. Propy is turning paper systems into digital ones.
The Propy software allows brokers to manage the full process entirely on their platform without ever needing to work outside the system, making it incredibly secure and much faster than before.
Propy is also well known for proving the concept of selling your home as an NFT, something that has been a controversial topic amongst realtors and crypto-skeptics.
The Florida home sold for $650,000 and proved the concept to work. Propy now offers the service of creating an NFT of your home to sell as a digital record of the sale transaction.
The Propy token is also supported on one of the world's largest cryptocurrency exchanges, Coinbase.
The downside to this is that although it makes selling a property cheaper, it means you still need those large capital commitments to own the property in the first place.
Lofty is a tokenized real estate platform that allows investors to buy small fractions of equity in a property, in the form of tokens. This means that you can invest in properties without needing to buy the full thing.
You'd then profit from the appreciation of the tokens if the home value increases and then you'd also profit from the regular rental payments made out to investors.
Investors will choose from a list of available homes to invest in which people sell to the platform. The properties are all managed by a 3rd party property management company.
The downside with tokenized property investing is that all of these platforms have an incredibly limited amount of housing stock, making investments pretty rare to come by, especially if the platform is popular, it'll be much harder to invest and far less profitable.
Nonetheless, tokenized property investing still opens the possibility of real estate investing to many people previously locked out, it just doesn't provide the same opportunities as Parcl.
Digital real estate isn't just buying land in a virtual world, it's also investing in neighborhoods via Parcl.
With our protocol, you'll be able to invest in neighborhoods using synthetic assets which track the price of the underlying asset, the neighborhoods are valued using the Parcl price index, which pulls data from hundreds of separate data sources to come up with an end price.
Synthetic assets are like traditional derivatives in the way that they allow an investor to invest in the underlying price of an asset rather than buying the physical thing.
Synthetic assets take it a step further to allow you to trade anything in the world, from memes to neighborhoods, you name it, you can trade it.
This is why digital real estate investing can offer you a way to invest in the price of a physical location without actually owning any property.
Investing in digital real estate is also a growing method to make money in a digital age, check out our article on "What To Look For When Investing In Digital Real Estate"
Digital property has become a popular way to make money over the past year, most people assume that means the Metaverse, and they aren't wrong. But to invest in digital real estate also means trading neighborhoods with Parcl, owning fractions of homes with Lofty, and selling property safely and securely via Propy.
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