It feels as though I’m always spouting the benefits of real estate investing and why everyone should consider having some real estate holdings in their portfolios.
Despite my repeated musings on the profit to be made from real estate, I realize that many people are still cautious.
A new trend has been creeping into real estate lately, though, and I’d say pretty soon the real estate investment market is going to look quite different than it does now—and you won’t want to miss out!
Real estate investing has long been a mainstay for serious investors, at least those with the necessary capital to get into such a costly (albeit profitable) arena.
Lately, though, we’ve seen a whole new kind of buyer entering the real estate investment scene with a whole new kind of payment: Bitcoin.
Before you get scared off from reading further by that word alone, allow me to put your fears at ease—there’s no need to have any pre-existing knowledge of Bitcoin or cryptocurrencies in general to discuss this.
However, it is important for us (as informed investors) to acknowledge the power of Bitcoin and the technology behind it, and their effect on real estate.
Buying any kind of property has long been accompanied by a multitude of stressors, be it problems with your real estate agent or the seller’s agent, or missing parts of the contract, or even one side not upholding the agreed-upon contract.
As easy as those problems can be to dismiss as you enter the foray with your rose-colored glasses firmly on, issues arise.
Whether it’s an informal oral agreement that doesn’t get carried through on, or some fine print you missed in the contract, or even missing commissions for your agent, the whole real estate investing process would be far less painful without those concerns.
Which leads us to the solution to those problems, and the technology behind Bitcoin: the blockchain.
Now you’ve probably heard of blockchain before, and perhaps skimmed over it assuming it was just another article about cryptocurrency or something you’re equally disinterested in, but blockchain is a separate technology that’s being used far beyond the bounds of cryptocurrency.
Blockchain is now being used by NASA, the media industry, and even the U.S. government, amongst others.
While it originally entered the spotlight because of its cryptocurrency capabilities, people quickly discovered that the same contracts being used to move cryptocurrency could be applied to many other (even unlimited) industries.
Blockchain works by creating an inherent contract that can’t be broken. In the context of cryptocurrency, you exchange cash for Bitcoin, or Ethereum, or any other cryptocurrency.
You’re on one side of the contract with your cash and some anonymous person is on the other side with your cryptocurrency—your cash isn’t released to them until the cryptocurrency is safely in your account, and vice versa.
This means that no one can skip out on payment from either side, which as you can imagine, can be applied to many other situations.
We can even imagine that at some point in the future, traditional contracts and the lawyers who go along with them will be unnecessary.
In the world of real estate investing, contracts formed using blockchain technology would be far more efficient and completely ironclad—no surprises down the line, no one failing to get paid, and no one getting ripped off (at least as far as the contract goes).
Blockchain allows for the cutting out of unnecessary middlemen, of which real estate has many.
So, you save money on contract lawyers, have fewer headaches and “surprises,” and get things done much quicker. What’s not to like?
Although it’s still likely a matter of years before blockchain starts being used widely throughout the real estate industry, we’re already seeing more and more people buying properties using Bitcoin, which will hopefully speed things along.
Miami, FL is leading the U.S. in Bitcoin-to-Bitcoin real estate deals, and one Miami-based real estate agent has predicted that in the next five years 25-30% of real estate sales will be done using cryptocurrency.
As always, I advise you to seriously consider adding real estate to your portfolio, and with new technologies emerging every day, who knows the kind of profits you’ll be raking in!