Resources

Educational resources, frequently asked questions, and curated links to help you understand real estate tokenization.

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Frequently Asked Questions

Is real estate tokenization legal?

Yes, real estate tokenization is legal when done in compliance with securities regulations. In the US, most tokenized real estate offerings are conducted under SEC exemptions like Regulation D, Regulation A+, or Regulation CF. Platforms must register with the SEC or qualify for an exemption.

How do I receive rental income from tokenized properties?

Rental income distributions vary by platform. Some pay directly to your connected bank account, others distribute to your digital wallet in stablecoins or the platform's native token. Distribution frequency ranges from daily to quarterly depending on the platform.

Can I sell my real estate tokens?

It depends on the platform and offering. Some platforms operate secondary markets or Alternative Trading Systems (ATS) where you can trade tokens. Others have limited liquidity, and you may need to wait for the property to be sold. Many Reg D offerings also have a 12-month holding period.

What happens if the platform goes out of business?

Your ownership rights are typically held through an SPV (Special Purpose Vehicle) or similar legal structure, separate from the platform. However, you may lose access to management services, secondary markets, and distribution infrastructure. Always review platform risk disclosures.

Do I need a crypto wallet to invest in tokenized real estate?

Some platforms require a compatible crypto wallet (like MetaMask), while others handle custody on your behalf. The requirement depends on the platform's technical implementation. Many newer platforms offer custodial solutions for easier onboarding.

How are tokenized real estate investments taxed?

Tax treatment varies by jurisdiction and token type. Generally, rental income is taxed as ordinary income, and gains from token sales may be subject to capital gains tax. Some token structures may offer pass-through tax benefits. Consult a tax professional for your specific situation.

What's the difference between REITs and tokenized real estate?

REITs are companies that own multiple properties and trade on stock exchanges. Tokenized real estate typically offers direct fractional ownership of specific properties. Tokenization may provide more transparency, specific property selection, and potentially different liquidity characteristics.

Are tokenized investments FDIC insured?

No. Tokenized real estate investments are not FDIC insured and carry investment risk. You could lose some or all of your investment. These are securities, not bank deposits.

External Resources

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