We’re in the endgame now.
Well, not quite, but I’ve always wanted to start a post with that. Besides, I’ve always said that if life was an idle game, real estate investment would be close to the endgame.
RealT is tokenised fractional real estate on the blockchain.
That’s a lot of big words. Put into simpler terms, RealT allows you to buy a share, or part, of a property, and receive a share of the rent based on how much you own.
I like to think of it more like a low-medium risk savings account that pays between 9-15% interest.
To get started, you’ll need valid ID, and an Ethereum wallet to hold your shares and receive your rent payments. If you don’t have an Ethereum wallet, I’ve written a handy guide to getting started with Ethereum here.
Head to RealT and click ‘SIGN IN’ to register an account.
You’ll have to wait for your ID to be verified before you can make a purchase. RealT is currently available to everyone except US citizens, due to regulations, but I have on good authority that they plan to introduce services to the US in 2020.
Once you’re all set up, head to the Marketplace.
Now for the exciting part! At the time of writing, there are 3 properties available in RealT’s Marketplace, currently all located in Detroit, MI.
One is valued at $69.40 per share (or token) and offers 10.24% annual return.
The second is $145.56 per share, offering 11.82%.
And the third is $62.70 per share, offering 10.25%.
You can choose to pay with PayPal, or with cryptocurrencies including ETH, DAI, BTC, and USDC.
Check your email!
Once your order has been processed, you’ll receive emails containing contracts for any properties you’ve bought shares in.
You need to provide an electronic signature for these contracts before you can receive your tokens.
RealT will also sign the contracts, and then your tokens (representing your shares) will be sent to the Ethereum wallet address you registered with.
The whole process typically takes a couple days.
You’ll receive daily rent payments directly to your wallet, based on your total share of the property.
For example, one share of 20200 Lesure St, Detroit, MI 48235 will pay $7.11 annually, or $0.019 per day.
Payments are made in the form of stablecoins (tokens that are pegged to $1.00—typically USDC or DAI) which you can send to Coinbase to trade them for GBP, USD, or EUR and withdraw them to your bank account.
Why not move your stablecoins into another Ethereum application to earn interest? The most popular are Compound Finance and dYdX, which currently offer around 4% interest on DAI. I recommend keeping track of current interest rates at LoanScan if you’re interested!
Sell your tokens at any time, with no fees on sales before December 2020.
Properties are re-valued every year by an independent professional appraiser. This means the value of your tokens may increase or decrease depending on the real estate market.
The Risks
I can’t talk about investment opportunities without making you aware of the associated risks.
- Property value. As I mentioned above, changes in the real estate market will affect the value of your shares, and affect your rental income accordingly.
- Dollar fluctuations. If your local currency is not the dollar, there’s also a small risk that the dollar will lose value against it and your holdings will drop. That said, there’s also a chance the dollar will gain value against your local currency and your holdings will increase! A small risk, considering the potential rewards.
All of the properties in RealT’s portfolio are insured to their full value, so even in the event of catastrophic damage such as the property burning to the ground, insurance funds are paid to token holders as stablecoins.
I highly recommend giving RealT a try.
It’s a fantastic investment opportunity that opens up the real estate market to everyone. If you’re interested, head over to their site and start your registration.
I currently own 6 tokens, spanning 3 properties, and valued at $862.32 as part of my ongoing Idle Experiment. Regular readers of those posts can expect to hear a lot more about RealT going forward!
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