The real estate market has drastically changed in the last few years thanks to the COVID-19 pandemic. Inventory is low, demand is high, and home prices are through the roof. In addition, a new trend of buying and selling using cryptocurrency has emerged in the market.
Digital currencies may be new, but property investors are increasingly turning away from traditional money for faster, safer, and more affordable alternatives, but there are some risks involved. If you’re thinking of entering the market soon, we’ve laid out the pros and cons of using cryptocurrency to conduct real estate business versus traditional money transfers.
The pros: cryptocurrency is fast, secure, flexible, and more affordable
While some consider cryptocurrency to be less secure, in reality, it’s one of the fastest and safest ways to transfer money thanks to blockchain technology. Traditional real estate can be slow, while crypto transactions are virtually instantaneous.
Especially when purchasing property globally, the rules and regulations of banks from different countries may differ, making purchasing international properties a slow matter. Crypto transfers are immediate, and money can change hands in the blink of an eye.
Furthermore, while traditional money comes with exchange fees, broker fees, investment fees, and other costs, crypto benefits from very few and very low transfer fees. The value of crypto may fluctuate and the real estate market may be plagued with high home prices, but eliminating fees tied to traditional money transfers could alleviate the financial burden of buying a home.
Also read: 5 Tools to Speed Up Real Estate Recruiting
Cons: the risks and regulations of crypto transfers
While crypto comes with plenty of benefits, there are, of course, some risks.
Cryptocurrency is new and unfamiliar. Transfering huge sums of money using a new technology requires a leap of faith — one not many people are willing to take when fraudsters are rampant. While crypto may offer massive gains to those willing to take the risk, those using crypto should do their prior research before diving headfirst.
Furthermore, the value of crypto ebbs and flows. Just as traders may revel in their massive gains, equally massive losses are possible. Investing your bitcoin in real estate is a great option to turn digital money into tangible assets, but always ensure you’re taking the advice of a top-notch real estate agent in order to navigate the process smoothly and decrease the risk of fraud.
Using crypto can be a roller coaster ride, so property investors would be smart to ensure all digital currency is exchanged quickly into fiat currency to limit your exposure to fraud.
In addition, some countries have strict regulations on how cryptocurrency should be controlled. Some have played with the idea of banning or severely limiting crypto transactions, which makes it difficult for those wanting to use bitcoin to plan ahead.
Ultimately, while some consider cryptocurrency ‘pretend money with no intrinsic value, those who understand digital currency may find it a faster, simpler, and more affordable way of conducting real estate business.