Duane Gafoor

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Disruptive Technology and Real Estate

Disruptive Technology and Real EstateDISRUPTIVE’

The real estate industry is crucial in advancing global economies both in developing and most developed nations. Real estate powers the construction boom that has continued to spur decent jobs for workers globally. The sector revolves around providing access to working and living spaces that are the backbone of our economy.

Within real estate properties, the internet of things has spurred home care innovations that have eased convenience at home. Analysts have projected digital technologies at commercial and residential properties as a critical driver of growth in the real estate investment world. Generating returns from real estate investments is relatively straightforward through rental income or when real estate properties appreciate and sold at a profit. Globally, wealthy individuals have leveraged real estate investments to generate wealth at great returns on investments.

To venture into the real estate sector requires addressing the most significant barrier to entry, its geographical obstacle. That is where technology comes in. Most countries disallow foreigners from direct ownership of real estate properties. In most cases, foreigners have to cede off rights to locals, disincentivizing them completely.

Securitization of real estate properties creates an avenue through which disruptive technologies can aid foreign investors to own real estate properties in other geographical locations.  This process is called the tokenization of assets. Tokenized assets provide a legal way to buy and sell assets without ceding interest to other people. The LABS Group, an end-to-end real estate investment startup, has developed a legal platform where investors acquire digital assets of investments in real estate. Tokenized assets held by local investors enable them to own the natural properties on the ground, making it easy for foreign investors to benefit from profitable investments through dividends or proceeds from the sale.

Investment fractionization is another disruptive investment model that pools funds from numerous small investors who buy large real estate properties for investments. It provides an opportunity to own an asset part. Further, smart contracts powered by blockchain technology provide an avenue where investors benefit from complete transparency in real estate investment transactions, making financial investments secure and transparent.

Without merging the real estate sector with technology, the world would not see growth in investments or the simplification of complex transactions. Technological advancements will enable real estate opportunities accessible to individuals and businesses in a faster and cheaper manner.

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