Landshare has announced the first-ever security token offering for real estate on Binance Smart Chain.
The sale will offer investors the opportunity to own a real-world yield-generating asset.
The property is located in Fargo, North Dakota, and has a current value estimated to be $170,000 with a $10,000 renovation budget. It has already been rented out on a year-long lease on November 1.
Coin Rivet spoke with Landshare CEO Jordan Friske, who explained the team saw great potential in the concept of real estate on the blockchain, and asset tokenisation has proven to be a great model for that.
“We felt there was not a true real estate presence in the Defi space, which is why we wanted to create a platform where you can not only buy tokenised real estate, but also leverage the asset tokens through various DeFi features”, he said, adding that Landshare wants to provide a real estate solution for the DeFi space.
He also confirmed the company plans to list as many properties as people are willing to buy.
“Going forward, we will be able to list properties at a much faster rate – the only limit is how quickly we can sell them,” he added.
“There are many markets across the US that offer great cash flow opportunities, so we’d like to expand into those as much as possible.”
Investors benefit from real estate appreciation
Landshare added that tokenisation could turn real estate into a fully liquid asset class. Each property has its own asset tokens which can be bought or sold directly on-chain.
Friske said he thinks this model could become a norm in the real-estate sector.
“Just as DeFi has challenged traditional financial systems with lower fees, higher yields, and seamless global capacity, real estate tokenisation will prove to be a disruptive alternative to traditional modes of fractional real estate investment,” he explained.
“The tokenisation model can be used for everything from fractionalising a rental property to raising funds for a multi-million dollar development.”
He also added that normally, real estate is thought of as a single, tangible asset that can be difficult to buy or sell.
“In other words, you cannot easily convert a house into cash or vice versa – it requires a lot of time and paperwork,” he stressed.
“But with tokenisation, the asset becomes liquid because shares can be easily bought or sold on the blockchain to other approved investors in a matter of seconds.”
This is the first US real estate tokenisation on the Binance Smart Chain while, in the UK, Alliance Investments already started to tokenise £500 million of real estate projects across the country.
Friske claimed tokenisation would continue to grow and expand throughout the world as real estate developers and others begin to see its value.
“The expansion and large scale and institutional interest in tokenisation are very promising,” he said.
“With Landshare, our goal is to offer standalone residential properties that are easy to manage and rent out, thus reducing overhead and increasing cash flow to investors.”
Disclaimer: The views and opinions expressed by the author should not be considered as financial advice. We do not give advice on financial products.