Today’s hyperconnected and digital world calls for a need to innovate in every industry, including real estate. The Blockchain technology is definitely a hit in the financial services industry but can we use Blockchain in real estate? Blockchain technology is a digitized, distributed ledger that immutably records and shares information that is sought to address inefficiencies and reduce fraud/error in the operational aspects of the business.
Here we look at 3 main points of how the adoption of Blockchain technology would streamline Real Estate.
The traditional lease contract can morph into a smart tenancy contract on the blockchain platform where lease terms and transactions are enabled in a more transparent manner. The contract could use fiat or tokens for automated payments to real estate owners, property managers and other stakeholders with near real-time reconciliation.
Information stored on many systems are being scattered on different points causing data redundancies, duplication of records and opaqueness. An open and shared database for all involved parties would enhance real-time data as well as prevent multiple copies of the same set of data. This could also result in timely fraud detection as well as improve compliance and security.
Financial and legal review documents are predominantly being drafted offline during the due diligence process which have proven to be time-consuming and paper driven. These documents include supporting the history of the ownership, tenants and repairs/maintenance activities. The manual verification process is prone to loss of information and errors, especially often requiring third party service providers which could increase the risks of misplaced documents during the transfer. Blockchain technology could partially or fully automate the processes and have a great impact in reducing inefficiencies and inaccuracies. Online records would vastly improve the time taken to draft lease information agreements which would ultimately ease the due diligence process.
(All information was adapted from Deloitte: Blockchain in commercial real estate)
Why Blockchain in Real Estate?
3 ways to revolutionize Real Estate using Blockchain was originally published in Data Driven Investor on Medium, where people are continuing the conversation by highlighting and responding to this story.