Digital real estate, especially through tokenization, is making it easier for different types of investors to get involved in the property market. Instead of having to buy entire properties, you can now purchase digital tokens that represent a small part of a property.
But who should invest in digital real estate? Let’s look at the types of people and organizations who can benefit from this new way of investing in property.
What is Digital Real Estate and Why is it Popular?
Digital real estate refers to owning pieces of property through digital tokens on a blockchain. You don’t have to own the entire apartment; instead, you buy a share of it. Tokenized real estate opens up the market to people who couldn’t afford to buy a whole property. For instance, you can now invest in expensive markets like New York or London with smaller amounts of money. It is even believed that asset tokenization will reach a market value of at least $10 trillion by 2030.
Who Should Invest in Digital Real Estate?
Below, we explore who should invest in digital real estate and how it can help meet your financial goals.
Retail Investors
1. Aspiring Homebuyers
Housing prices in big cities have risen by as much as 40% in the last ten years, making things hard for first-time buyers. By investing in tokenized properties, you can start building wealth through real estate without needing to buy an entire home. Over time, your earnings could help you save for a down payment.
2. Investors Looking to Protect Their Money from Inflation
Inflation reduces the value of money over time, but real estate typically grows in value with inflation. Digital real estate investment is a way to protect your savings from inflation.
When inflation rises, property values usually go up too. Since 1963, inflation has risen 896%, while housing prices have risen by more than 2,350%.
When you invest in digital real estate, you’re putting your money in something that tends to grow even when prices increase everywhere else.
3. Crypto Enthusiasts Seeking Stable Investments
If you’re already into cryptocurrencies, digital real estate might be the perfect way to add some stability to your portfolio. While crypto can be volatile, digital real estate tokens are tied to real-world properties, making them more stable.
For example, if you’ve invested in Bitcoin or Ethereum, you might want to balance that risk by purchasing digital real estate tokens tied to properties in cities like Tokyo or Berlin. This way, you stay within the blockchain world but with more security.
4. Budget-Conscious Investors Eyeing High-Value Markets
If buying a whole property in a city like Paris or Singapore is out of reach, digital real estate gives you an alternative. With tokenization, you can buy small shares of properties in prime markets for as little as $50 with Estate Protocol, a fractional ownership platform. This allows you to tap into high-demand real estate without needing large amounts of money upfront.
5. Retirees and Professionals Looking for Passive Income
Many retirees and professionals rely on real estate for a steady income. With digital real estate, you can earn passive income without managing physical properties. Many investors use real estate to boost their retirement income. In fact, 89% of U.S. investors are interested in real estate, and 96% of those who invest find financial success.
Institutional Investors in Digital Real Estate
1. Banks and Financial Institutions
Banks are starting to invest in digital real estate as a way to spread their investments and lower their risk. For example, JPMorgan Chase has created digital banking tools that help manage money for commercial real estate, making it easier to handle complex accounts. By adding tokenized properties to their portfolios, they can also make their digital investments more stable.
2. Real Estate Investment Trusts (REITs)
REITs are companies that invest in real estate on behalf of their shareholders. Companies like ATTOM provide data analytics that helps REITs understand market trends and make better digital real investment choices. This allows them to offer better returns to their investors by lowering costs.
3. Pension Funds
Pension funds are drawn to digital real estate because it can provide long-term stability and reliable returns. Real estate has consistently provided solid returns over the years, and tokenization makes it easier for pension funds to invest globally.
4. Insurance Companies
Insurance companies are also entering the digital real estate market. They like the flexibility and liquidity that comes with owning tokenized properties, making it easier to manage large sums of money.
5. Corporate Treasury Departments
Big companies with large cash reserves invest in digital real estate as a way to earn returns while keeping their money accessible. This gives them more flexibility while still benefiting from the growth in real estate values.
Bottom Line
Digital real estate investment is quickly becoming a major part of investors. Platforms like Estate Protocol are making it easier for regular people and institutions to invest in digital real estate without the usual barriers. Whether you’re a small investor or part of a big institution, digital real estate offers a modern, flexible, and affordable way to grow your wealth.
If you’re ready to start your digital real estate journey, Estate Protocol can help you invest in premium properties with ease.
