3 keys to investing in tokenized real estate, generating profits in dollars and avoiding scams
Investments in tokenized real estate continue to grow around the world, allowing more people to enter a market that was historically considered the safest to invest in.
Latin America accounts for this by registering a 40% increase in the volume of transactions carried out with cryptocurrencies in the last year, according to a report prepared by the Chainalysis agency.
A good part of this growth is due to this type of investment, which allows a large volume to be mobilized in an agile manner. Furthermore, a study by the World Economic Forum indicated that by 2030, 10% of the global economy will be tokenized.
The truth is that tokenized real estate investments are attractive precisely because they allow small savers to invest in multiple projects.
Now, for example, from USD 1000 you can be part of a real estate development in Miami, the city that is once again in the center of attention after Messi decided to acquire a new property there.
“These types of investments allow you to diversify your options in a simple way and without bureaucracy. We offer monthly returns in dollars on the expansion and remodeling project of the Sorrento Villas hotel, which will capture the growth that Miami continues to have not only in tourism but also in job creation,” explains Álvaro Castro Burgueño, co-founder & Chief Portfolio Officer of Rext , a company specialized in real estate tokenization and real economy assets.
Regarding these trends, Leo Elduayen, CEO and co-founder of Koibanx – a leading company in financial tokenization using blockchain technology – explains that the main benefits are the transparency and traceability offered by blockchain technology. Additionally, the immutability of the tokens allows investors to verify the status of their stake.
However, it is important to keep a few things in mind when deciding to start investing in tokenized real estate.
3 KEYS BEFORE INVESTING IN TOKENIZED REAL ESTATE
1- Previous research: it is important to check that the company offering the investment is registered and has a good reputation in the market. Also check the history of the tokenized property, studying real estate market trends to evaluate if the investment is profitable.
2- Verify the token: ensure that the token has real value, that is, it is backed by real property and has a transparent pricing structure.
3- Evaluate additional costs: consult in advance about maintenance expenses, transaction fees and any other additional expenses that may affect the value of the investment.
Along with these points, it is very important to stay alert to avoid falling into a scam.
“You have to pay close attention, especially when proposals appear that promise surprisingly high returns, from organizations that have no support or solid track record. Furthermore, they are usually accompanied by aggressive sales practices instead of giving space to a consultative advisory process ,” explains Castro Burgueño, who also highlights as a fundamental point that before making a real estate investment, one must check that the property has no debt taken on. , since in the event that the operation is not so successful, the first to collect will be the first degree creditors, before the investors can recover their investment.
In this sense, Guillermo Escudero, Regional Manager and Market Analyst at CryptoMarket in Argentina, agrees on the importance of validating the existence of the asset that operates as collateral for the token, as an important security measure and adds: “It is also important to read in detail the White Paper, that is, the document that explains the project from end to end; and verify the existence of corporate structures behind the project to be invested.”
In this way, once the corresponding analysis has been carried out, the benefits of investing in tokenized real estate are highlighted by the possibility of generating multiple investments as they are low income levels in relation to traditional investments in this area; allowing the investor access in a simple, secure and flexible way.