Real Estate

How Crypto is Impacting Real Estate

Cryptocurrency (Crypto) came in fighting for its own place in a world where money was the established currency; but its struggle for significance on the global financial stage, though long and painful, is gradually paying off. Some governments have accepted its use and are drawing up laws to regulate it, while others are still weighing their options and doing due diligence. The Crypto laws vary from place to place and even if the concept of risk is still being monitored, Crypto has gained recognition in the virtual financial space and is accepted as currency in some markets.

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Crypto and Real Estate

It has been established that over half of the world’s total assets are in real estate. Individuals, as well as organisations, are promoting investment in real estate because of its long-term value. The value of real estate has also not gone unnoticed by Crypto investors who would gladly avoid the hassle of paperwork and negotiate directly with the sellers when buying.

The internet is filled with people who either sold their homes in bitcoin (the most popular cryptocurrency) and made a lot of profit. There are also those who sold their homes and had the value split between bitcoin and hard currency with huge profit margins, traded in Crypto, and made enough to buy a house. 

Many house listings in Crypto are on the web, and some real estate agencies have set up their organisations purely for transactions in cryptocurrency. These transactions cover buying, selling and rental of homes and other property types.

For a balanced view, it is pertinent to weigh these benefits against the drawbacks that have been observed over time, for proper refinement of the system and to ensure investors are cautious. Below is a comparison of some advantages and disadvantages.

Direct Transactions without Proper Documentation

Crypto makes it easy for investors to transact directly. Still, it is established that fraudsters online can also give false information about property and receive value for property they do not own. Also, some buyers dislike making direct transfers to sellers because of their digital footprints, which they would like to protect. Searching for an authentic agency to serve as a middleman can also be time-consuming. Therefore, it is advisable to do due diligence before commencing transactions.

Fluctuating Value

The value of Crypto fluctuates. It is good news when it rises, but it can be depressing when it falls. So, if someone sells a property in Crypto, it is advisable to convert the value to regular currency immediately. It can be very sad to sell a property and lose funds with a drop in value.

Value can also rise or drop before payment is made for a property. If negotiations have been made, and the seller is expecting payment for a property, it’s debated whether they should pay the negotiated rate when value drops, increase it to match the current value, or return excess when there is an established value rise. It is advisable to have all these discussions during the negotiation process.

While regulatory bodies are looking into the issue of Crypto and seeking ways to make its transactions safer, it is noteworthy that buying real estate with Crypto is more valuable than saving funds in Crypto because the house will appreciate, but the value of the currency is not yet static and cannot be predicted