What is real estate tokenization?
Last updated: 2025-11-26
Real estate tokenization is a way to turn property rights into digital shares on a blockchain. Instead of one person buying a whole building or apartment, many investors can buy small pieces called “tokens”.
You can imagine a building divided into 100,000 digital parts. Each part is one token. When you buy some of these tokens, you get a small share of the project. You do not get a key to the apartment, but you do get rights to income or profit, as written in the legal documents.
In a typical setup, the property is owned by a company or SPV (special-purpose vehicle). This company holds the building, signs contracts with tenants, and receives rent. The SPV then issues a fixed number of tokens. Each token represents a part of the value or income of the property, or both. When investors buy tokens, they get rights to the benefits from this company.
Real estate tokenization does not change the physical asset. The building stays where it is. Tenants continue to live or work there. Local laws, land registry rules, and property taxes all stay the same.
What changes is the financial layer above the building: how ownership, investment and cash flows are recorded and managed.
In traditional real estate, ownership and investor shares are often stored in paper contracts, PDF files, or private databases. Transfers can be slow and need notaries, many signatures, and bank paperwork. With tokenization, ownership and investor rights are reflected in tokens on a blockchain. Transfers can be done digitally, with a clear record on the ledger.
Because tokens are digital, they can be moved, sold, or managed online, often faster and with lower costs than classic, paper-based systems. This can make real estate investment more accessible for smaller investors and more flexible for property owners and developers.
Simple comparison
| Aspect | Tokenized real estate | Traditional real estate |
|---|---|---|
| How you invest | Buy small digital tokens linked to the property | Buy full property or big share (JV, fund, company) |
| Record of ownership | Blockchain ledger that shows who owns each token | Paper contracts, notary records, private registers |
| Minimum ticket size | Can be much lower (hundreds or a few thousand) | Often very high (tens or hundreds of thousands) |
| Transfers between investors | Digital, can be faster and partly automated | Slow, manual, needs lawyers and banks |
| Transparency | On-chain transfers plus online dashboards and reports | Information spread across many documents and systems |
| Physical asset | Same building, tenants and location (only investment layer changes) | Same building, tenants and location |