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Cryptocurrency and the Future of Real Estate Investing

Kyle Investor Using a Tablet to Buy Property with CryptocurrencyAs technology evolves, the real estate market is under pressure to evolve. The latest technologies and techniques of buying and selling rental properties have already revolutionized many aspects of buying investment properties. For some, such new developments are just the beginning. One of the emerging technologies that many real estate investors are closely watching is cryptocurrency.

Although it is still in the very early stages, an ever-growing number of real estate transactions are completed using cryptocurrency every month. As using cryptocurrency to purchase or sell property is becoming more common, it is vital to distinguish what it is and how it may affect rental real estate investors like you.

Cryptocurrency Defined

Cryptocurrencies, like Bitcoin and Ethereum, are digital currencies. These currencies differ from other kinds of currency in that they cannot rely on a central bank or administrator – they can be transferred directly from one user to another. These transfers take place on a cryptocurrency network that verifies each transaction through incorruptible network nodes and are then recorded in a digital public ledger called a blockchain.

The idea behind cryptocurrency is to improve a transaction’s efficiency and safety and reduce the risk of fraud. Since all cryptocurrency transactions are open to the public, there is enhanced transparency. And, since the data in the blockchain isn’t susceptible to corruption, information can be verified faster and more safely than through previous methods.

Automating Real Estate Transactions

No doubt that the potential of cryptocurrency has already captured the imagination of many real estate investors. And, many can see how that cryptocurrency could change nearly every stage of a real estate transaction. Anyone could effortlessly authenticate the type of deeds, access the full history of a property, and more as soon as using blockchain. Banks, real estate agents, buyers, and sellers would all have access to the same verified information.

Transmitting data between all parties in a transaction would be faster and safer, and transfers of funds would happen immediately. All of this could significantly reduce the amount of time between a preliminary sales agreement and finalizing the transfer of title.

The Power of Three

The actual advantages of utilizing cryptocurrency to invest in real estate come into focus when mixed with the affordances of smart contracts and blockchain. Smart contracts are digital agreements programmed to carry out transfers once certain conditions are met automatically. Therefore, using a smart contract and cryptocurrency, all concerned parties could receive the fund due to them the moment a property is sold. Attorneys, appraisers, real estate brokers, and so on would all be paid through an instant transfer of funds. Every transaction would be automatically recorded in the blockchain, creating a transaction history that is both publicly accessible and stored indefinitely.

Title deeds, surveys, ownership information, and other information would be available in real-time to all parties, allowing instant validation. It’s not hard to see how carrying out real estate transactions this way will eventually change almost everything about real estate investing.

The Future is Now

While buying and selling investment properties using cryptocurrency is still not that common in the Kyle rental market, there are instances where properties have already changed hands via digital currency. One noteworthy example is the recent sale of a penthouse in Miami Beach, which sold for $28 million in cryptocurrency. The deal took less than ten days to close, which is virtually unheard of via traditional methods, even for a cash buyer.


Would you like more expert advice about buying investment rental properties? Contact us online or by phone at 512-520-9060.

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