Dave Marcinkowski is a Founder/Partner in Madera Residential and Quext, focused on creating smarter, healthier apartment communities.
GETTY
Have you ever tried to describe the concept of cryptocurrencies to the uninitiated? How about blockchain technology and non-fungible tokens (NFTs)? The attempts may lead you to exasperating conversations where you have to describe yet again how cryptocurrency works like regular currency but is not kept in a bank—defining ideas such as fungibility and convincing others it is not a scam.
Confusion and skepticism often precede a transformational innovation becoming a fully accepted and appreciated norm. True, cryptocurrencies have seen a couple of bad apples in the bushel recently, but the concept and underlying technology are far from unsound. I and many others believe cryptocurrency will be the next major leap in making payments and storing and verifying transaction information. As more use cases open up, it has the potential to move from the realm of the farfetched to becoming the standard for secure global transactions. This includes the multifamily industry.
Blockchain technology is tailor-made for the multifamily industry.
The multifamily residential industry is a sector that could richly benefit from blockchain innovation. Some forward-thinking property owners already accept Bitcoin and other cryptocurrencies for rental payments. Others use crypto to invest in new properties and have their transactions securely recorded on a blockchain. When will the rest get on board?
I think blockchain is ideally suited to handle title insurance policies, transitioning deeds, and other sensitive data surrounding real estate transactions. With this method, all transaction records are linked together by cryptography and stored in a block on the chain. Once recorded, the transaction cannot be altered in any way, ensuring a secure, easy, accessible, and visible distributed ledger process. Blockchain gives immediate insight into the exact transaction date, the amount, and the remaining account balance. There are already 44 million blockchain wallet users worldwide, with over half of them created in the last five years.
In light of spiraling cybersecurity crime, it looks as if the appeal and inherent data control behind self-sovereign identity (SSI) will drive this trend to become standard practice. Self-sovereign identities are digital identities that are decentralized. Users are empowered to self-manage their identities and personal info without the use of third-party providers to store and centrally manage their data. Crypto, blockchain, NFTs, and SSI technologies are innovations that promise to revolutionize multifamily real estate as well as how we purchase and record transactions.
The matrix of functions surrounding blockchain technology and cryptocurrencies can create an ecosystem for how we live, purchase, invest and achieve personal goals. Use cases go far beyond mere rental payments. In the near future, here are the applications I see for these emerging technologies in the multifamily industry.
• Use of blockchain for signing, recording, and filing of residential leases and other lease-related documentation.
• Expanded use of crypto for rental payments and secure transactions via biometrics on smart devices.
• Democratization of real estate investment enabling anyone to transact fractional and incremental crypto buy-ins and tradings.
• Renters invest in their own rental units, leading to better property stewardship and personal profit if the property sells.
• Property operators offering crypto and NFT rewards and incentives for rent on time, referrals, and early renewals in the form of NFTs for furnishings, art, community shops, restaurants, onsite amenities, and fractional ownerships.
• Property owners supporting their locale by delivering NFT pop-ups on residents’ phones to local shops, grocers, and events, building a sense of community and convenience that appeals to current and potential renters.
Multifamily operators shouldn’t wait to embrace the future.
A multifamily property can become the perfect example of this modernized lifestyle, as more and more future residents will own cryptocurrency and seek environments that accept its use. By the end of 2022, the largest cryptocurrency ownership group will be adults ages 25 to 34, followed by those ages 35 to 44, which also happens to represent the largest demographic of rental ownership.
The multifamily sector should be motivated to embrace a blockchain ecosystem to capitalize on its future potential. Multifamily operators can begin today by deciding upon and accepting a cryptocurrency for rental payments, experimenting with NFT offerings and incentives, and cultivating a community environment to attract the next generation of tech-savvy and convenience-driven residents. When that happens, before long, you won’t have to keep explaining NFTs because they will likely be using them themselves.
0 Comments