Investments in real estate were already a safe way to use money in order to achieve an economic return. In this context, digital assets are here to stay and further enhance the market: between 2021 and 2022, according to industry data, shares in proptech companies in Latin America quintupled.
In this sense, Argentina is the perfect target for this type of company. Currently it takes 14.2 years of median income to get a standard apartment of two rooms of 42 m2 in the City of Buenos Aires, according to a report prepared by Real Estate Report.
“Our goal is that any citizen has access to financial products and that this means having access to mortgages, loans, good investment products. Reental wants to help make these products available to anyone and that only an internet connection is needed”, he explains. Eric Sanchez, CEO of Reental, a Spanish startup dedicated to the technological tokenization of real estate.
How to “tokenize” a property
The innovative company, born in 2020, is also an alternative to the decline of cryptocurrencies and the variation of values. “The market crash does not affect our tokens at allsince they represent a financial product associated with a property. The tokens issued by Reental are security tokensvalidated by the CNMV in Spain, and its value depends on the value of the property and the yields obtained from it”, says Sánchez.
The company proposes to its users to carry out a participating loan agreementthat is, a proportional part of that property in which you have invested. Dividends generated are achieved between the rental or sale of the same, which can vary between 10% and 15%. At that time, users receive monthly returns in dollars.
How do they do that? Reental, like other proptech companies in the world, acquires a property, “tokenizes” it and divides it up in small amounts registered through the Blokchain. A favorable result can generate greater traceability, facilitate transmission and, above all, eliminate intermediaries that are present in conventional businesses.
The success of Reental in Spain and its sights set on the United States
The Spanish startup that was born almost a year ago saw its main source of growth in Spain. currently owns 16 tokenized properties in the Valencian community, with a total of 43,210 tokens. The Spanish portfolio adds up like this 51,928 tokens which translates into 5.2 million euros.
La Marina Building, a building located in the Port of Valencia, is one of Reental’s most ambitious projects and where it has sold almost 26,000 tokens (2.6 million euros), the equivalent of 26 properties.
The initiative on this property, launched at the beginning of March, has already obtained enough tokens to acquire five floors of the building, which allows it to rehabilitate and restore the building.
Today, the company led by Sánchez is expanding to the markets of Latin America, opened a new headquarters in Miami, United States, and plans to be present in more than 70 countries by 2023.
“Why the United States? There are several reasons: the absence of state taxes, the migration generated by the Covid and, especially, due to a series of advantages in the field of Real Estate,” he says. Fernando Ors, president of Reental in America.
The first real estate marketplace in Argentina
In a regional and national context with inflationary policies, Argentina and Latin America are monopolized by digital businesses through the Blokchain. According to a report from World Economic Fund, It is estimated that for 2027 10% of world GDP will be tokenized.
A group of Latin American entrepreneurs analyzed this beta and launched Build up, the first digital crowdfunding project in the regionin tune with the concept of democratization.
“Wbuild was born with the objective that people can access to invest in properties around the world, starting with the US, with low income tickets to become owners of a percentage of the property. We divide and digitize a property into a certain number of shares that represent the number of m2 it has”, he says Daniel Pardo, CEO of the company.
On August 15, the virtual platform was launched so that people can reserve m2 in advance in which they want to invest when the process of selling the property formally begins.
Those interested in participating in the crowdfunding must buy at least one m2 of the Quadro Residences building located in the Design District of Miami, United Statesminutes from South Beach. The process is entirely online and the minimum investment is enabled starting at $50.
What does the Argentine real estate market say
With the phenomenon of digital assets in Real Estate already established in Argentina, the real estate chamber puts the eye and thinks favorably about it. “The main advantage that is seen is how investment would be democratized for practically anyone,” he says. Alejandro Bennazar, president of the organization.
Precautions when investing in a property
However, Bennazar warns that there is a danger of regulation and lack of education by investors: “In Latin America we already know that it is propitious for scammers can do their thing with these types of schemes.
From the Real Estate Chamber they assure that, for example, not knowing how to use a wallet (digital wallet) means a certain danger and puts the savings in cryptocurrencies at risk. For this, the short-term objective in Argentina will consist of “accompany evolution with education”.
The Federal Real Estate Institute is currently promoting financial educational courses from the Real Estate Training Institute so that potential investors can democratize through the “real” world, as well as the new decentralized world with new technologies.
“Today you have many small savers who would love to have access to a lot or a property. Many times These people cannot access the purchase or the payment plan of a property for the mere fact that they don’t have an advance,” adds Bennazar.