Cryptocurrency Offers Opportunities for Real Estate Investors and Homeowners

The combination of cryptocurrency and real estate is finding increasingly widespread resonance in the Estonian market, with bitcoin payments being offered in real estate listings as well. Specialists explain what to keep in mind when trading in real estate with virtual currency and how it works.

One of the world's first and largest real estate transactions using cryptocurrency income was conducted in 2014 in Estonia, when a new crypto millionaire purchased Malla Manor for one million euros using profits earned from bitcoin. Crypto expert Asse Sauga sees a bright future for cryptocurrency in Estonia's real estate sector even today. "We have an active crypto community that develops existing solutions and comes up with ever new ways to use cryptocurrency, supported by Estonia's digital environment. However, the real estate transaction side and notaries would need more innovation, and there are still many opportunities to use technology to make processes faster, more convenient and more secure."

According to Urmas Uibomäe, CEO of Kinnisvara24, listings have also appeared in real estate portals where the property description includes the option to pay for real estate with bitcoin. He does not rule out the possibility that one day prices will be displayed separately in crypto on the portal. "Transaction terms are and remain an agreement between the parties, so if someone wants to pay in crypto, for example, we won't object," added Uibomäe. "If portal users develop a broader interest, we see no problem in adding a corresponding filtering option to the search."

However, experts' opinions on the crypto and real estate combination are divided. According to Jaan Liitmäe, member of the board of Domus Kinnisvara, crypto adds unnecessary risks that people are not willing to take when buying a home. "Real estate is often purchased using bank loans, which can be repaid to the lender in euros. The money needed for loan repayments is in turn earned from salary or other income, which is usually paid in euros or another currency," added Liitmäe. "In theory, crypto can appreciate and simplify making down payments and subsequent loan repayments, but due to negative price movement it has the opposite effect, and it is very difficult to predict changes in the value of crypto money."

According to Liitmäe, it is unlikely that crypto will become a widespread and currency-comparable value carrier. "In today's financial system, where central control of money supply is carried out through the cooperation of central banks and governments, it is not in the interests of these parties to allow elements onto the market that would reduce the influence of the banking system or governments," explained Liitmäe.

However, Liitmäe believes that both real estate and various personal property registers could adopt blockchain in the longer term. According to Sauga, thanks to crypto technologies, one can look beyond money, one example of which he cites tokenization. "Through real estate tokenization or fractionalization, homeowners can sell a small piece of their home or, for example, divide rental real estate among investors and distribute rental income accordingly," explained Sauga. "By now we already have several real estate crypto projects and I myself am participating as a co-founder in one RedCurry.co project. We are creating an entirely new financial system related to a real estate fund that is protected against both price fluctuations and inflation and backed by commercial real estate."

However, Sauga advises novice investors to be cautious: "Before investing, research and clarify to yourself where you are putting your money. The crypto world is rife with fraud. You should be skeptical of any offer that promises quick and high returns and profits."