The buzz word being kicked around by all the “kool” kids quietly in 2018 and in 2019 is blockchain. But what the heck is it?
First of all, blockchain is so much bigger than what you may typically associate the term. If you only consider blockchain as Bitcoin and other cryptocurrencies, strike that preconceived notion from your brain.
One of the real estate industry’s bleeding edge publications, The Swanepoel Trends Report, published an excellent article on blockchain and the implications of its creation and extension into the financial and real estate markets.
This article removes all the high-brow dialogue and boils it down nicely. I have attended a handful of industry presentations by “geeky” experts in the area the past few years and read other articles, but was still unable to wrap my head around the issue without getting a migraine.
“No one really understands blockchain and its potential but it is on track to be probably the industry’s next multi-million dollar opportunity.” -Stefan Swanepoel from the Blockchain + Real Estate Swanepoel Trends Report.
What is blockchain?
Blockchains record events in a chain (or ledger) that is distributed across a network of computers. (Swanepoel Trends Report, Blockchain + Real Estate). These events are verified and recorded across each computer, making a blockchain an extremely secure repository of information.
The NAR (National Association of REALTORS) is already taking advantage of the benefits of blockchain. In 2018, the NAR built the REALTOR Association blockchain which establishes a record tied to each member that REALTOR associations across the country can access. This has allowed local chapters to access member statuses for REALTOR in a centralized place, expediting the time it takes to verify a REALTOR’s membership.
Benefits for landlords and property managers
Right now, I think the biggest benefit for landlords and property managers could be the ability to verify identities and source documents of tenants. Imagine the risk reduction possible if blockchain can remove the issues of false ID’s, false paystubs, false addresses.
Another example would be never having to worry about wire fraud when buying or selling a property.
And that’s just the beginning.
Once it’s rolled out, blockchain will impact residential property management, real estate investing, and certainly how real estate is bought and sold. You can purchase the full report here.
Now does it make sense?
Here’s to your pursuit of financial freedom through rental properties!
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