Recent years have seen cryptocurrency enter the mainstream in some pretty significant ways. More businesses are certainly accepting crypto as a valid form of exchange, and you might even nip down to your local bakery and flex your digital wallet. But did you know that cryptocurrencies are also making waves in the real estate market?
Investors are increasingly using cryptocurrencies for their real estate investments, and the benefits of doing so include a smoother buying process, reduced fees, and diversification across tangible assets. But, how exactly can you ensure a successful crypto-property exchange? Keep reading to find out.
# 1 - Grow Your Crypto Wallet
First, ensure that you have enough cryptocurrency to afford a house. This may sound simple, but it’s a harder task than you might imagine. For instance, if you’re dealing in Bitcoin, you’ll probably need between 3 and 4 Bitcoins to buy an average four-bed property (obviously, depending on the market), and that goal can take some time to achieve. And that’s no easy task.
You’ll certainly need to make large investments to see those kinds of returns. This can cause problems in itself, as major investments run the risk of impacting market price. To avoid that, opt for otc crypto trades that are better suited to large transactions, which don’t have this knock-on effect. It’s also vital that you diversify, research your options carefully, and set clear goals that see you cashing in long before markets crash.
# 2 - Know Your Options
There are an increasing number of options when it comes to crypto real estate deals. For instance, you can now purchase a property directly using cryptocurrency if your wallet’s healthy enough. Alternatively, you may prefer to convert cryptocurrency through an exchange. This is probably the most common option, and it ensures you can use crypto investments to top up existing purchase pots.
Less commonly, there are also now a limited number of crypto loans and mortgages, which might be worth your while for ongoing investment. Alternatively, some real estate owners will allow you to get started by gradually buying crypto shares in a property for the sake of portfolio diversification and perhaps eventual ownership.
# 3 - Tackle Legality
While real estate and crypto are relatively new bedfellows, there is already a fair amount of legality around purchases of this nature. Predominantly, you’ll need to be prepared to prove the source of your crypto funds in accordance with anti-money laundering laws. You may also need to pay capital gains if you sell any cryptocurrency before purchasing property. And, of course, remember that additional costs like stamp duty will still be calculated according to the GDP value of that property, not the cryptocurrency you used to buy it. The better you understand all of this, the less you’ll end up paying in the long-run.
It may be too early to say whether bricks and blockchain make a good pair, but if you approach with these tips in mind, you may well be in store for your best real estate investment yet.
