What in your opinion is the best application of blockchain in real estate/renting?
The blockchain application that gains the most monetary efficiency for both the owner and the renter is the ability to eliminate the middleman from the transaction.
Realty companies have served to be a choke point of information flow between owners and renters, which has been necessary for their own survival. Even with the advent of sites like VRBO, information is still retained back for a fee at a choke point of information flow. This can be eliminated with a P2P, decentralized social app specifically for real estate owners and renters to find each other.
With blockchain technology owners and renters could openly communicate with each other socially, with each of their reputations on the line for others to see, such as the owner’s responsibility to deliver what he is advertising, and the renter’s responsibility to pay promptly and properly protect the property that they’re renting. Realtors will charge as much as one month’s rent for a yearly rental agreement, or as much as three months rent for longer. These fees can be eliminated with owners and renters finding and performing for each other socially on the blockchain.
Will smart contracts replace traditional rental agreements any time soon?
Experts agree that we are witnesses of the major break-through in real estate, some even refer to it as a “ revolution”. More and more property owners are considering buying property with smart contracts.
I regard that smart contracts will replace traditional rental agreements sooner than real estate transactions that involve a transfer of title. There acceptance as evidence in a court of law is another question, but this too is inevitable and we’ll soon see the boundaries of contract law within the blockchain determined in jurisdictions throughout the world.
Besides that, smart contracts are more secure than traditional rental agreements. Bitcoin has a function called multi-signature. In bitcoin, you use your private key to approve the sending of the digital currency to another person, so risk-mitigation is another advantage of concluding a smart contract.
When someone rents an apartment, the landlord takes a security deposit in case the tenant damages the property. By law, he’s supposed to keep the funds in a separate escrow account and not spend it. Once the lease ends, the tenant has to rely on the landlord to return the deposit. But this system fails very often, deposits are not returned and litigations and lawsuits are not uncommon between tenants and their landlords. With blockchain technology, real estate escrows are secure, and homeowners are protected from any kind of fraud.
In my opinion, the more closely blockchain rental agreements resemble clearly established precedents for lessors and lessees in a given locale, the quicker that the technology will be accepted in jurisdictions across the world.
What are the benefits of using cryptocurrency/tokens when paying for rental-related services?
What is a dollar if not for an expression of value that’s value is determined ultimately by an autonomous third party that we don’t really know and we can’t even question? We can’t even audit their books!
Cryptocurrencies are also expressions of value, but their values are determined largely by the buying and selling across various open markets.
We would be naive to think that cryptocurrency values can’t be or aren’t ever manipulated, but even still, cryptocurrencies offer far more transparency than the shady backroom deals proffered by the Federal Reserve and global bankers across the world. For every crooked blockchain company that has ran away with the people’s money there’s twenty different instances of powerful people of influence within nation states ruining the wealth of their own people for their own benefit. There are great cryptocurrencies today and even more promise for the future, so I’ll take my chances with cryptocurrency.
Aside from the philosophies of money supply and manipulation, cryptocurrencies are more portable and ultimately more transferrable. You don’t have to declare cryptocurrencies kept on the blockchain when you cross international boundaries. Robbers can’t mug you and steal your tokens. Cryptocurrencies can be freely traded and used as a hedge against runaway hyperinflation that can happen with any country’s given fiat currency. Would anyone want to be a landlord today in Caracas accepting Bolivares as payment? I read somewhere that it costs the USD-Equivalent of $125 just for large plate of French fries at McDonald’s. So you have renters paying landlords in Caracas less per month than a box of French fries costs at McDonald’s. Contracts denominated in cryptocurrency provide a nice hedge against the stability/instability of a given country.
What are the biggest bottlenecks of home rental industry at the moment and how in your opinion blockchain technology can help us solve them?
The biggest bottleneck of the home rental industry exists in professional middlemen circumventing the free flow of information between real estate owners and renters. A decentralized social app designed to support the flow of information between landlords and renters is the most obvious and most applicable use of blockchain technology in my opinion. It has the power to provide both cost savings to the landlord as well as cheaper rent for the tenant.
Blockchain technology offers total transparency, eliminates fraud, middlemen, including real estate agents, notaries, escrow agents, and guarantees easy and free tracking of all records. With blockchain technology homebuyers will be able to gain free and fast access to public records, which cannot be tampered. No one could go back in time and forge records that didn’t exist.
Blockchain technology will end up with middlemen, provide free access to records and save money. The process of buying or selling property will be safe, secure and transparent.