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Crypto Real Estate: A New Way to Invest

Investing in cryptocurrencies is one of the trends that skyrocketed in recent years. Nevertheless, most people want to know what they can do with them. Among other things, you can invest in crypto real estate or even buy real estate with cryptos.
Bitcoin, Ethereum and other cryptocurrencies have been a great asset to invest money in, but when people think of stability, they usually go to the real estate industry. The question that usually comes up is “Can I buy a house with Bitcoin?”, and the answer is: Yes, you can.
Users who want to be less exposed to risk see in real estate a great hedge against market fluctuations. In this sense, swapping from a more volatile asset such as traditional cryptocurrencies to a property is a great deal for more conservative investors.
Through this article we will dive into the possibilities of buying or investing in real estate with cryptos. We will review what you need to take into account when you mix both worlds and the benefits out of them.

Buy Real Estate with Cryptos

Former Disney actor Brock Pierce, now a successful entrepreneur, director of Bitcoin Foundation and even independent candidate in the 2020 US presidential election, was reportedly the first person in the world to buy a home using cryptocurrency, back in 2019.
He bought a house in Amsterdam using US$1.2 million worth of Bitcoin as collateral to secure a loan for the property. Since then, a lot of cryptocurrencies’ investors started looking to purchase a home with their investments.

3 Ways to Buy a Home with Cryptocurrencies

There’s more than one way to purchase a property with cryptos

  • Use cryptocurrency as collateral: There are companies that allow you to use your cryptocurrency as collateral to get a traditional loan in fiat money. You can use this money to buy real estate.
  • Convert your cryptos into cash: The easiest way to use your cryptos is selling them for fiat money. This is a good idea when cryptos are at a higher price than when you acquire them. If it’s a great amount of money, you will need to keep that money in your personal account during a certain time due to IRS or your country's regulation.
  • Transfer cryptos peer to peer: While it is harder to find sellers that will accept cryptocurrency as payment for their properties, the idea is warming between owners. It requires a little more effort, but if you find a seller looking to acquire Bitcoin, Ethereum or other crypto, your offer will be tempting to them.
    ### 3 Benefits of Buying Real Estate with Cryptos
    It is more and more common to see purchases of real estate properties with cryptocurrency. This is because it brings great benefits.
  • Acquisition of a stable and secure asset: while cryptocurrencies’ value can vary from month to month, real estate is one of the most stable assets in the world. It works as a great hedge against inflation or bear markets.
  • Speeding up the purchase: if you pay directly with cryptos you will avoid classic obstacles that come with mortgage processes. It will be immediately credited in the seller’s wallet.
  • Better deals: Sellers who prefer cryptocurrency as payment will probably be more leaned to offer you a discount.
    ### 3 Things to Take into Account when Buying a House with Cryptocurrency
    If you’re thinking of using your cryptos to buy a home, you need to consider a couple of things beforehand.
  • Not every seller accepts cryptocurrency: despite the growing trust in cryptos, there still are a lot of owners that aren’t familiar with this industry, which limits your buying options.
  • Market volatility: some of the cryptos’ value is constantly changing. If you buy a house with Bitcoin and 3 days after its price skyrocket or fall 30% it’ll be on yours or the seller’s behalf.
  • Lenders may be hesitant to approve loans: the feature that makes cryptocurrencies a high-security asset it’s the same thing that may cause hesitation on mortgage lenders: no paper trail for lenders to trace the origin of funds.

Invest in Real Estate with Cryptocurrency

Investing in real estate with cryptos opens new ways to use your money, increasing your returns and reducing the risk. Unlike buyers, investors have a much easier path to get into the crypto real estate industry.
The most common way to invest in real estate with cryptocurrency is through tokenized crowdfunding. This is a fundrise method commonly used to reach great amounts of money needed to finance real estate developments.
This way, small investors can be part of large-scale projects with a minimum investment. A property is digitalized and divided into equal value tokens given to each investor’s wallet based on their share of the project.
After a project is completed, earnings are divided between all investors according to their initial investment.
Tokenized crowdfunding is a great way to get into real estate. Since it's backed by a real estate asset, it avoids the volatility of a traditional cryptocurrency, keeping the same benefits of security and transparency that the blockchain system provides.

To Summarize

Today you can do pretty much anything with cryptos: buy, sell or invest. Of course, it’s encouraged for you to know as much as possible and read everything you can on the subject in order to clear any doubts.
Cryptocurrency is not going anyway, it’s actually growing every day and it will eventually reach every market. If you’re reluctant to this industry, we produce constant articles for you to stay informed with the latest updates. In this article we talk about real estate tokenization and its benefits.
In such a changing and challenging world, information is the best hedge for your investments.

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