New trends in real estate investing in 2022 include NFTs, DeFi, crypto-backed mortgages, and fractionalized ownership.
NFTs continue to have an impact across multiple industries, and this mainstreaming is revealing new opportunities and trends for blockchain technology.
The real estate industry has recently expressed interest in blockchain technology because it allows for fractionalized ownership, cryptocurrency-backed mortgages, and other novel ownership, financing, and payment models.
Here are a few real estate-focused blockchain projects that will bring decentralized finance, cryptocurrency payments, and nonfungible tokens (NFT) to the industry.
Propy is the cryptocurrency market’s largest real estate-focused protocol, with the goal of automating home buying and making the closing process faster and more secure.
Propy made waves for the recent real estate NFT auction in the United States after selling a home in Tampa, Florida for 210 Ether (ETH) worth roughly $650,000 after becoming the first company to launch a real estate NFT in 2021.
It's a wrap!
The first real estate NFT auction in the US is history now. Thank you so much to everyone who participated and to those who cheered us on. Congratulations to the lucky winner, we can't wait to see what you do with the #PropyNFT next! What a blast! pic.twitter.com/LHfZrNSwTN
— Propy (@PropyInc) February 10, 2022
Propy-created real estate NFTs can be used as proof of collateral for crypto-based borrowing and lending, in addition to providing proof of ownership to the holder.
Milo provides cryptocurrency-based mortgages
Because there are few options for paying a mortgage with cryptocurrency, crypto holders are currently forced to choose which of their tokens they are willing to cash out while also incurring a taxable event.
Milo is a Miami-based fintech startup that claims to be the first to offer the world’s first “crypto mortgage,” allowing customers to use Bitcoin (BTC) as collateral to qualify for a 30-year loan.
When it is launched, the service will be available to both domestic and international customers looking to buy real estate in the United States.
During the ongoing early-access stage, the company has already processed a few loans, but interested parties are encouraged to sign up for a waitlist.
Several projects that emerged on the scene in 2022 provide evidence of the growing popularity of real estate-focused projects in the blockchain ecosystem.
Vista Equity is a new project that aims to be the world’s first peer-to-peer marketplace for real estate-backed NFT assets.
WE HAVE LAUNCHED! A home can now be fully tokenized giving consumers new financial freedoms. Investors can now buy real estate backed NFTs as securities. Read our press release https://t.co/x7WKKyiCnH. Share, like & follow. @Algorand @wsford @silviomicali #realestate #blockchain pic.twitter.com/IiCDfv6034
— Vesta Equity (@vestaequityvpm) February 15, 2022
Vesta Equity’s goal is to enable homeowners who own their homes outright to access the equity in their homes through tokenization. Token holders would then be able to sell a portion of it as a fractionalized NFT, according to the company.
Tokenization solves this problem by providing investors with a simplified way to invest in real estate. Typically, property owners tap into their equity by refinancing or selling.
QuantumRE is a similar project that is still in its early stages. QuantumRE, like Vista Equity, seeks to connect homeowners with investors in order to provide homeowners with debt-free financing while providing investors with access to residential real estate.
QuantumRE assists in the process of originating Home Equity Agreements (HEA), a type of financial tool that allows homeowners to receive a cash lump sum for the equity in their home with no monthly payments, interest, or additional debt.
The agreement can be settled by selling the house, refinancing it, or renewing it. QuantumRE is supporting a secondary trading marketplace for HEAs by creating liquidity and a trading platform for HEAs, which can be tokenized and split into fractional units.
According to QuantumRE, the first fractionalized HEAs will be available on the platform in Q1 2022.
Aside from that, both Vista Equity and QuantumRE are launching their products on the Algorand blockchain, citing the network’s fast processing speeds and low gas fees when compared to the Ethereum network.
Disclaimer: These are the writer’s opinions and should not be considered investment advice. Readers should do their own research.