You might think that all of the best investment opportunities go to Wall Street. However, international real estate is actually the single largest asset class in the world. Currently valued at $280 trillion, the market expects to have a turnover of $4 trillion by 2025. That said, international real estate is one of the most difficult markets to break into for the average person. Well, that’s about to change. With Propy creating the “tokenization of real estate,” everyday investors will have access to international investment opportunities.
What Is Real Estate Tokenization?
There are two forms of real estate tokenization: legal rights and equitable rights. Real estate can be owned either directly (by holding a legal title to the property) or indirectly (through an intermediary legal entity, such as a corporation, LLC, trust, or other legal entity). The latter means that the owners have an equitable interest in the real estate property owned by the legal entity. One can tokenize the legal title rights or equitable interests.
Propy’s Role in Real Estate Tokenization
Propy is working on developing the real estate tokenization of legal rights and equitable rights, as well as the blockchain infrastructure for handling, transferring, recording, storing, and settling both legal and equitable rights to real properties. The firm is working on everything from the blockchain registry of legal rights to the blockchain mechanisms for the registration, creation, transfer, and settlement of equitable rights.
One of the most difficult things to accomplish will be the tokenization of legal rights, due to property law. However, Propy has already started its work on a dense and sophisticated program that targets tech development and policy changes. The key element of this program is the development of a blockchain registry of legal rights. This stand-alone product has already been developed by the Propy engineering and legal teams. It is currently being tested in government-sanctioned pilot programs, both overseas and in the United States.
What the Future of Real Estate Investment Looks Like
Tokenizing legal and equitable assets might create a world where real estate properties can be traded at high speeds. These trades would operate in a way that is similar to trades in today’s stock market, and they would travel seamlessly across international borders. Of course, the properties themselves cannot travel across the world, but real estate capital can. Hence, the liquidity of real estate would increase.