The use of cryptocurrency for payment in the real estate industry is gradually picking up. A lot of investors have now decided to leverage on the gains of the blockchain to invest in the property sector. There are clear examples of investors wishing to invest in the property market with the intention of exchanging their properties for Cryptocurrency.
Some financial pundits are of the view that this trend will continue since it has completely eliminated the need for middlemen in the property trading process.
BUYING A HOME WITH BITCOIN IS EASY
There are several benefits when you buy property with digital currencies, one of which is the elimination of middlemen and reduction in the fees charged when sending a large amount of fiat-based currency to the seller.
“In the property market, it would make a lot of economic sense if an investor makes payment with cryptocurrencies. Leveraging on the blockchain technology, it’s a lot easier to send a huge amount of money to property sellers. Also, the Blockchain technology will cut off middlemen in the transaction as well as offers a huge reduction in the fees charged,” Neeraj Agrawal, Coin Center’s Director of Communication told the LA Times.
For these reasons, the Director of Communication feels that virtual currencies; especially Bitcoin is useful when making payment for big items such as properties and vehicles, rather than using it to buy small items like food, clothes, toys, among others.
The following are seven (7) tips that potential investors should consider before purchasing properties with cryptocurrencies.
Tip #1; Research: There is every need for potential investors to carry out rigorous research on cryptocurrencies. Youtube videos are viable research option for you.\
Tip #2; Understand: Mr. Neeraj cautioned investors not to concentrate on investment side alone, but to consider cryptocurrency as a real currency that the market will accept in exchange for properties
Tip #3; Hire an expert: Property sellers need to interview the expert they intend to hire with a view to determining their expertize level of the crypto space.
Tip #4: Verify, Verify, and Verify: Cryptocurrency is vulnerable to hacking and fraud, despite its much-touted security. Cryptocurrency is a new innovation and may be fraught with a lot of fraud since it is not being controlled by any central government. When there is a lacuna in the system, it is very difficult to trace its source and destination. Know your clients very well. You can even go the extent of carrying out Know Your Customer (KYC) on your clients, before dealing with them. Until the crypto space is properly regulated, there is a need for carrying out verifications.
Tip #5: Practice or lean: You can practice cryptocurrency by downloading a crypto app such a Coinbase and then trade Bitcoin with as low as $20. This will enable you to understand how the market works
Tip #6; Stay Updated: As a property seller, you need to stay updated with other cryptocurrencies such as Bitcoin cash, Litecoin, ethereum, and ripple, among others.
Tip #7: Set a standard: The crypto market is highly volatile. It is important for you to set a standard. Use the worth of your properties in fiat-based currency to set a standard.