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The Growing Relevance Of Bitcoin In Real Estate

Guest Post | June 3, 2022

Bitcoin and real estate - The Growing Relevance Of Bitcoin In Real EstateAbout 14 in every 100,000 properties listed on the real estate market accept Bitcoin. Since the currency has only been in existence since 2009, this figure speaks to the growing relevance of Bitcoin in real estate.

What do you need to know about Bitcoin in the real estate industry?

Keep reading to learn how Bitcoin is being used in real estate transactions and the benefits and disadvantages of selling and buying homes using Bitcoin.

The Increasing Relevance Of Bitcoin In Real Estate

Bitcoin is being used in the real estate industry in several ways. More and more real estate companies are enabling transactions using Bitcoin. This section will cover how you can use Bitcoin in the real estate industry.

Listing Homes For Sale Using Bitcoin

For sellers looking to get in on the Bitcoin phenomenon by selling their home for Bitcoin, there are real estate companies that can list your home for sale in exchange for Bitcoin. Not all real estate agents deal with Bitcoin transactions, but some do.

Sellers can list their homes for sale using Bitcoin, which allows them to make a considerable investment in the cryptocurrency, which could increase significantly in value over time as cryptocurrency becomes more present in everyday transactions.

Bitcoin In The Rental Market

It is also possible to list your home for rent in exchange for bitcoin, offering property investors the chance to diversify their income.

Buying Homes Using Bitcoin

Buying homes using Bitcoin is a little more complex, as you will only be able to buy homes listed for sale via Bitcoin. This will significantly impact the number of homes you can choose from.

See:  How Proptech is changing the real estate industry

You could potentially speak with the seller and place an offer in Bitcoin, but there is no guarantee that they will accept this offer.

When you buy a home with Bitcoin, this is an excellent way to diversify your investment portfolio. If Bitcoin decreases in value, you will have real estate investments to fall back on. Buying homes using Bitcoin is recommendable if you have a significant amount of money invested into bitcoin, as it will reduce the risk factor.

The Pros And Cons Of Bitcoin In Real Estate

To help you understand why Bitcoin is becoming more relevant in the real estate sphere, here, we will cover the benefits and disadvantages of using Bitcoin in real estate transactions.

The Pros Of Bitcoin In Real Estate

Here are some of the benefits to consider with Bitcoin real estate transactions:

  • Diversification of investments - holding all of your assets in Bitcoin can be particularly risky, as the value of Bitcoin has risen dramatically since its origins in 2009 and could potentially drop, just as other cryptocurrencies have collapsed. So, by diversifying your investments, you can ensure that a more stable real estate investment mitigates the risk of your cryptocurrency investment.
  • Increased privacy - when you buy or sell a home using Bitcoin, you are offered significantly more privacy. You can also avoid tax on the transfer of property rights.
  • Profit - if you have made money on your cryptocurrency investments, and wish to lock in your assets, then investing in property is an excellent opportunity. More and more real estate agencies are adopting cryptocurrency in their transactions to appeal to the market of Bitcoin investors who wish to secure their investments.
  • Negotiating power - if a buyer is willing to make a transaction in Bitcoin, this will give them a more competitive edge over sellers. Using Bitcoin in real estate transactions will provide buyers with more room to negotiate with the seller and get a better deal.
  • Easier international and overseas real estate transactions - Bitcoin facilitates easier international and overseas real estate transactions that will primarily take place online.

The Cons Of Bitcoin In Real Estate

Here are some of the disadvantages that real estate investors, sellers, and real estate agents must consider when it comes to using Bitcoin in real estate:

  • Limited availability - if you’re looking to purchase a home using only Bitcoin, limit your choices. You could reach out to sellers and discuss the potential for a Bitcoin transaction, but this will increase the length of your property search. There will be fewer properties on the market for sale with Bitcoin, so you must be prepared for limited availability.
  • Fewer interested buyers - Bitcoin investors make up a small percentage of home buyers and real estate investors, so you will have fewer interested buyers when you put your home up for sale using Bitcoin. You will likely have to wait longer for your home to sell, putting you at a disadvantage.
  • Less negotiating power - if you wish to sell your home for Bitcoin, then the lack of interested buyers will put you at a disadvantage when it comes to negotiations. You could get less for your home than you would by selling it for cash.
  • Missed opportunities - securing Bitcoin gains with a real estate investment, or diversifying your investment portfolio, could cause buyers to miss out on future profits..
  • Complex tax situations - cryptocurrency is an unregulated currency, which means that any tax calculations could be tricky to navigate. The transaction will likely be subject to capital gains tax, and it’s best to get the advice of a tax expert well-versed in cryptocurrency transactions to avoid a visit from the authorities in the future.
  • Lack of regulations - with the lack of restrictions on cryptocurrency transactions comes the potential for new rules that could make the transaction more complicated than you bargained for.

Summary

Bitcoin is new to the real estate industry, but it doesn’t appear to be going anywhere. There are both advantages and disadvantages to using Bitcoin in real estate transactions, so it is up to the seller or buyer’s discretion whether they think real estate transactions using Bitcoin are right for them. In the future, we can expect to see more transactions being made with Bitcoin in the real estate sphere, which will likely come with more regulations and an increased number of tax experts proficient in cryptocurrency transactions.


NCFA Jan 2018 resize - The Growing Relevance Of Bitcoin In Real EstateThe National Crowdfunding & Fintech Association (NCFA Canada) is a financial innovation ecosystem that provides education, market intelligence, industry stewardship, networking and funding opportunities and services to thousands of community members and works closely with industry, government, partners and affiliates to create a vibrant and innovative fintech and funding industry in Canada. Decentralized and distributed, NCFA is engaged with global stakeholders and helps incubate projects and investment in fintech, alternative finance, crowdfunding, peer-to-peer finance, payments, digital assets and tokens, blockchain, cryptocurrency, regtech, and insurtech sectors. Join Canada's Fintech & Funding Community today FREE! Or become a contributing member and get perks. For more information, please visit: www.ncfacanada.org

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