Tokenized Real Estate: Brick and Mortar Enter the Internet of Value

Tokenization is reshaping real estate by making it accessible, fractional, and liquid. The sector now offers predictable cash flows through rents, tangible underlying assets, and the ability to purchase fractional shares rather than entire properties. The vision is clear: transform property shares into tradable assets available 24/7, usable in DeFi, with rental income settled in stablecoins. Yet, the challenge lies in distinguishing credible projects from mere narratives.

Five distinct models are emerging—DeFi-native structures, compliance-focused frameworks, securities-backed tokens, and tokenized rental streams. Investors must scrutinize legal frameworks, governance mechanisms, and liquidity pools before committing capital. The traditional barriers—six-figure minimums and bureaucratic hurdles—are dissolving. Exposure can now be acquired in smaller increments, with ownership rights recorded on-chain and traded on secondary markets.

The infrastructure hinges on legal entities like SPVs or trusts, robust KYC/AML protocols, and decentralized ledgers that track ownership and cash flows. One pioneering approach bypasses rental monetization entirely, focusing instead on digitizing deeds and titles through NFTs to slash transaction costs and delays.