The fact that the world around us is being transformed by technology isn’t necessarily breaking news. While it’s easy (and relatively factual) to assume that technology is the driving factor behind all this change, it’s a host of social and interpersonal factors that trigger the same. In this current day and age, customer experience trumps brand loyalty, and data security trumps product quality – more often than we expect it to.
So what brings about such a drastic change in the behaviours of today’s consumers? The expectation of nothing but the very best, especially as options offered increase, can be safely considered as the driving factor for numerous technologies, including blockchain. Data security for example, is something that even the average consumer is aware of, especially due to numerous breaches that have taken place during the past few years. Therefore, a demand in data security is constantly on the rise, both on a corporate and consumer level.
Rightfully so, since the repercussions of compromised data security are too expensive to bear. From losing sensitive customer data to cyber espionage, entire systems have collapsed or have been on the verge of collapsing. In addition to compromised data security, lack of transparency across businesses and its varying operations has also been a festering ground for many forms of malpractice – from corruption to money laundering. None of these issues are trivial, and establishing a decent standard of work ethic is one of the fundamental stepping stones of a reliable business.
No industry is immune to the above ramifications of poor data security, but the real estate industry in particular is especially prone to easy targets of false ownership, properties that aren’t as advertised and more. Unlike a standard consumer product, issues can seldom be detected and tracked upon a single observation or two. With multiple layers of relatively vague information set in the midst of almost any kind of real estate, errors and discrepancies are more or less a norm. On top of that, corruption in the form of wrongful ownership is also unfortunately common, making any kind of sale or transfer in the future, a harrowing process.
This is where blockchain comes in. Originally associated with the dealing of cryptocurrencies, the concept that constitutes of blockchain is one that can be applied to more than simply dealing with online currencies. Likewise, blockchain is one that has immense potential in the real estate industry, and is already in use across multiple property management frontiers today. Thanks to its elements of data security and optimum transparency, blockchain has made a steadfast proliferation into many aspects that make up the real estate industry. In fact, even blockchain development in Sri Lanka has peaked; albeit for a host of reasons, including encouragement from the government to improve the financial sector, blockchain has exploded in popularity both in the destinations that apply it, as well as where it is developed on an offshore basis.
This article explains some of the ways that blockchain is being used in the real estate sector. From ownership to renting, the applications are multiple as they are varied. Read on to know more!
Land titles can be a tricky business, especially in underdeveloped countries. With poor history available of the average property, while being tinged with possible corruption, buying, selling, leasing or renting any property can be a nightmare. This can cause unnecessary downtime, not to forget stress and the loss of money to conduct inspections and regularise deeds for easy handling in the future.
The decentralised ledger system pertaining to blockchain can drastically alleviate all the above problems, especially since the ledger will be visible by multiple people on a peer-to-peer network. Land titles can be created and stored as part of the blockchain, while smart contracts can make signing and transferring deeds quick, safe and very much transparent.
This also streamlines investments in real estate, as investors (particularly foreign investors) can now place their money safely and with the assurance that their money is being invested at the right place. With many foreign investors being victim to real estate scams in other countries, the openness of information provided by blockchain can eliminate the possibility of further fraudulent schemes. The application of blockchain into real estate investing has led rise to tokenisation – which is the segregation of any property into ‘tokens’ that investors can then buy, without having to go through the hassle of paperwork and other legal formalities.
Being the least liquid form of asset, the tokenisation of real estate can therefore create a lot of ease for both buyers and sellers to purchase tokens as many as needed. This way, investors can choose to invest in smaller portions of property if they wish. Investors with smaller budgets also stand a higher chance of acquiring stakes, thereby increasing the pool of potential investors that are capable of purchasing property for investment purposes.
Looking to buy a home or office of your own, and unsure about the authenticity of its previous owner? Then blockchain ledgers can assist in informing you and other parties involved about various details and intricacies surrounding the property, instead of having to go through the trouble of investigating information. Since each block that’s created cannot be altered in any way, this preserves original information and prevents tampering of any kind. From lawyers to building contractors, every bit of information is securely stored within the blockchain, thereby helping buyers get the best price, while also enabling sellers to sell to entities that are verified and genuine.
The same blockchain concept also applies to mortgages; with the average mortgage taking months to sanction as well as requiring hundreds of pages worth of processing, the decentralised ledger can immensely help eliminate all of this and therefore streamline the mortgage process as well.
Currently, landlords determine rent prices. But what if this was determined based on a ledger that consisted of a property’s entire history, as well as the bids of potential tenants? This is now a possibility today, especially with platforms such as Rentberry. Offering transparent auctions, the site aims to remove hidden bids and therefore create a rent negotiation environment which can increase loyalty amongst its customers, while making the overall process efficient through digital agreements.
The same rental concept also applies to hotels; as the hospitality sector strives to provide services that are best tailored to suit the needs of customers, a database that’s managed via blockchain can assist in identifying target customer bases, while recommending services they may be potentially interested in. As a result, this can also involve thorough background checks of customers, since all their original data will be stored in the blockchain.
Being more of an umbrella process, project management is more or less something that is applicable to any sector. Similarly, project management that takes place in real estate, particularly when it comes to constructions and renovations, can be bolstered with the use of blockchain. Now, project managers are freed from the task of mediating between contract signatures and the transference of routine information; creating a peer-to-peer network across a decentralised ledger that consists of all parties involved is an ideal way to share and coordinate information. On top of that, signing papers by means of smart contracts and agreements further streamlines tasks, making the entire project management process all the more transparent.
Blockchain developers are in high demand, especially since some of the world’s leading corporations are keen on staying at the very top of the blockchain game. Much potential lies in this field, including in terms of remuneration. As numerous Fortune 500 companies remain on the lookout for competent blockchain developers, getting acquainted with what is required to embrace this field of expertise is highly advisable.
In a nutshell, blockchain developers can be segregated into 2 types:
If you’ve been doing what you have been doing for long enough, then you will definitely be able to resonate with some of the pains elaborated above, when it comes to real estate in general. Learning more about blockchain and just how it can improve business functions to suit all stakeholders involved is something that is highly valuable, as the right knowledge and support (most probably from an agency that specialises in blockchain development) can help you create your very own dedicated blockchain-based solution too.
As numerous companies, from multinational organisations to local startups, begin to realise the importance of blockchain (particularly within real estate), understanding how you can partake in the same will also give your business the leverage it needs to stay ahead of the competition.
Blockchain development has skyrocketed during the course of the past few years, particularly after its success in cryptocurrencies such as blockchain. While most associate blockchain with bitcoin up until this day, it is a concept that can be applied across multiple frontiers, including the real estate industry. Many companies are jumping on the blockchain bandwagon, thanks to its unparalleled benefits. It’s important to understand the advantages that blockchain brings, in order to get some perspective on its overall worth.
Considering the vulnerability of our cyber systems today, frequent breaches have made the average consumer all the more vigilant (and as a result, demanding) towards data security and privacy. With more people opting for stricter data protection regulations, the level of transparency provided by blockchain is one that can help reassure users, while providing clear information with every update made to a block. Owing to blocks being tamper-proof, what is entered into a blockchain system stays the same permanently, and is moderated by a network of peers who each provide approvals.
This is a quality that is highly valuable in the real estate industry, as oftentimes even the average property can be riddled with mishaps in terms of land titles, and doing the necessary formalities for sale or purchase can turn out to be a nightmare. The decentralised ledger can therefore eliminate such errors and gaps, and create the efficient signing of papers with smart contracts. In addition to this, investing also becomes an organised and pleasant experience. Tokenisation, or the concept of segregating a property into ‘tokens’ via a blockchain-based system can offer investors both big and small the opportunity to invest in any property of their choice, based on how much they please. This makes the lack of liquidity in real estate get more autonomy, thereby giving both sides (owner and investor) the opportunity to make deals – and fast.
Blockchain can also apply to rentals and hotel stays in the same way. While tenants can get rates that are precisely calculated as per the property’s history, hoteliers can store customer data for targeted recommendations in order to offer customers exactly what they need. Additionally, mortgages are also made easy, as every bit of data is transparent across a peer-based network, while formalities are carried out via smart contracts. If construction management is of importance to you, then blockchain also facilitates project management through its decentralised ledgers and smart contracts. This way, all parties are informed of the latest happenings in real-time, giving project managers more time, energy and freedom to focus on tasks that need their fullest attention.
When it comes to blockchain and real estate, both developers and real estate business owners stand to benefit from this combination. While blockchain developers are in high demand by many of the world’s leading tech-oriented companies, real estate business owners have the potential to strengthen their business by creating a safer, secure and transparent working system, through blockchain.
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