Tokenized Real Estate: How to Invest in Property On-Chain
From RealT to Lofty: How to buy fractional property, receive daily rental income, and understand the legal and tax implications.
Introduction
Tokenized real estate democratizes property investing. Instead of needing $50k for a down payment, you can buy a $50 token representing a fractional share of a home in Detroit or an apartment in Miami.
The Mechanism: SPVs & LLCs
The property isn't "on the blockchain" physically. Here is the legal structure:
- SPV Creation: An LLC is created specifically to own the property.
- Tokenization: The LLC shares are tokenized digital securities.
- Ownership: Holding the token means you legally own a share of that LLC.
- Income: Rent is collected, expenses paid, and net income is distributed to token holders daily/weekly.
Where to Invest
RealT
Gnosis Chain | 9-12% Yields
The market leader. Massive portfolio, mostly Section 8 housing in Detroit/Chicago/Cleveland. Daily rent payments in USDC. Tokens act as collateral in RMM (Aave fork).
Lofty
Algorand | 6-10% Yields
Known for great UX and "Airbnb-style" browsing. Diverse locations across the US. Uses a DAO structure for property decisions (e.g., voting on repairs).
Pros vs. Cons
Advantages
- Low minimums (~$50)
- Daily liquidity (via secondary markets)
- No landlord headaches (fully managed)
- DeFi composability (RealT)
Risks
- Vacancy risk (no tenant = no rent)
- Property devaluation
- Regulatory uncertainty (Securities laws)
- Platform risk (if RealT/Lofty shuts down)