See More

Where To Buy Tokenized or Fractionalized Real Estate and Art

12 mins
Updated by Maria Petrova
Join our Trading Community on Telegram

Art and real estate have been associated with wealthy people for centuries. This is primarily because the entry barriers to owning high-end art or property are quite high. But those barriers are shifting. Today, thanks to fractionalized real estate and art tokenization, it’s possible for small-scale investors to begin investing in real estate or digital art for as little as $20. This guide lists the top fractional real estate and art investment platforms that enable you to buy tokenized assets.

Top 5 platforms to buy fractional and tokenized assets

You can use several tokenized asset investment and fractional ownership platforms to buy tokenized or fractionalized art and real estate. Let’s look at the top five platforms you can utilize today:  

1. Ark7

Invest in rental homes & earn $50 bonus
Specialty
Fractional real estate investing
Fees
One-time 3% sourcing fee
Welcome bonus
$50 when invest $1,000

2. Angelo

Collect art tokens & meet the artists
Specialty
SocialFi art marketplace
Fees
1% per trade on Angelo Marketplace (with $1.50 min fee)
Welcome bonus
$10 trading voucher
Specialty
Tokenized real estate investing
Fees
Current business model is based on monthly subscription fees
Specialty
Fractionalized tokenized real estate
Fees
A single token for RealT properties costs between $50 and $150 per token
Specialty
RWA tokenization
Fees
The pool creators set their own swap fee

What are fractionalized assets?

Fractionalized asset investing occurs when several investors pool together funds to purchase a portion of a high-value asset like artwork, collectibles, or real estate, allowing each investor to hold a fraction of that asset.  

Fractionalization is the process of subdividing a single asset, such as real estate, into small, tradeable units. These fractions then represent a corresponding ownership stake in the real estate asset. Fractionalization allows investors to buy a fragment of a high-value asset, like artwork, luxury goods, or real estate, without buying the whole asset altogether. 

Fractionalization is particularly prevalent in the real estate industry as it allows small-scale investors to pool funds together and participate in a market with generally high barriers to entry.  

What are tokenized assets?

Blockchain tokenization is the process of digitizing assets and depicting them as digital tokens on a particular blockchain. Each token then becomes a representation of the fractional ownership of the underlying asset. Tokenization can also be applied to real-world assets (RWAs) like commodities, intellectual property, real estate, and even stocks. 

Almost any asset can be tokenized, as tweeted by DefiHawk, a DeFi researcher and writer.

While tokenization can happen to almost any RWAs, their most common use cases are currently in the art and real estate sectors. For example, tokenization makes it possible for renowned physical art to be converted into digital art and for art enthusiasts to own a fraction of it, thus democratizing the art market. 

Didi you know? The real estate tokenized market is projected to grow to an 18.2 billion dollar industry by 2032, as reported by Forbes.

Tokenization vs. fractionalization

Essentially, both fractionalization and tokenization allow investors to enjoy fractionalized ownership in high-value assets that they would have otherwise been unable to access. Although tokenization and fractionalization offer alternative art and real estate investment options, they have some differences, as shown below:

Key aspectsFractionalizationTokenization 
LiquidityFractionalized assets are managed by asset managers or financial institutions. Tokenized asset platforms can be accessed directly by investors without the need for any intermediaries thus reducing management fees.
Market accessFractionalization is facilitated via mutual funds or asset-backed securities in the TradFi markets.Tokenization provides a secure, tamper-proof, and transparent record of asset transactions and ownership thanks to the utilization of the blockchain.
Technology Fractionalization represents the division of assets into shares. It is not dependent on a particular technology, although it is often facilitated by digital platforms, for example, in the case of real estate crowd funding. Thanks to the utilization of the blockchain, tokenization provides a secure, tamper-proof, and transparent record of asset transactions and ownership.

Why should you invest in tokenized or fractionalized real estate and art?

Real estate web3 fractionalized

Investing in tokenized or fractionalized real estate and art offers several compelling advantages. It allows you to diversify your portfolio by owning shares in high-value assets that might otherwise be out of reach. This approach reduces risk by spreading your investment across multiple properties or artworks instead of concentrating on a single asset.

Additionally, tokenization enhances liquidity, making buying and selling fractional shares on various platforms easier. It also allows smaller investors to participate in markets traditionally dominated by wealthy individuals and institutions.

Investing in tokenized or fractionalized real-world assets (RWAs) and AI art can benefit from potential appreciation and income streams while enjoying greater flexibility and access to a wider range of investment opportunities.

What to look for while selecting the platform?

Several factors should be considered when selecting a platform to buy tokenized or fractionalized art and real estate. Here are a few you should pay attention to.

To start with, look for a platform with a robust security system and compliance with the relevant authorities. Secondly, for platforms that leverage blockchain technology, ensure that you appraise the underlying blockchain network used. Consider factors like consensus mechanism, interoperability, scalability, and transaction speeds. 

Thirdly, consider the supported asset type. Different fractionalization and tokenization platforms may support a specific asset class. For instance, Ark7 supports fractional real estate investing, making it suitable for investors looking to diversify into real estate. Thus, consider the kind of asset you want to tokenize first before choosing a platform. 

Fourthly, the tokenization platform should have robust smart contract capabilities to define the governance rules and automate asset management. 

Democratizing access to luxury investing

Tokenized and fractionalized real estate and art investing provide exciting opportunities to diversify into potentially lucrative asset classes that are otherwise difficult to access. Anyone can invest in high-end art and property thanks to tokenization and fractionalization. Ensure to always DYOR; regardless of the figure, never invest more than you can afford to lose.

Frequently asked questions

Top crypto projects in the US | July 2024
Harambe AI Harambe AI Explore
Uphold Uphold Explore
Exodus Exodus Explore
Coinbase Coinbase Explore
Chain GPT Chain GPT Explore
Top crypto projects in the US | July 2024
Harambe AI Harambe AI Explore
Uphold Uphold Explore
Exodus Exodus Explore
Coinbase Coinbase Explore
Chain GPT Chain GPT Explore
Top crypto projects in the US | July 2024
Disclaimer

Alex-Lielacher-BIC.png
Alex Lielacher
Alex Lielacher is an experienced figure on the Crypto world. Journalist and founder, an agency that works with a range of bitcoin businesses. He first came across bitcoin in 2011 and has worked full-time in the cryptocurrency industry since 2016. Previously Managing Editor of Bitcoin Market Journal, Alex holds a first-class honors in Investment and Financial Risk Management from Bayes Business School. Today, Alex contributes to leading media publications and works with a range of bitcoin...
READ FULL BIO
Sponsored
Sponsored