Can I Buy Properties With Cryptocurrencies?

 

 

 

 

Did you ever know that you can buy properties with cryptocurrencies? Well, of course, it isn’t impossible to do and just like any other fiat currency, cryptocurrencies have value in them. 

Depending on where you are buying the property, you can always convert your crypto to fiat currencies. However, every property will have different requirements, so you must pay close attention to that. 

Statistics show that around 14 homes per 100,000 accept cryptocurrencies and the number is growing. This is an excellent fact to hear. 

Well, let’s not wait any further because in this article, we will learn more about buying properties with cryptocurrencies. 

Let’s dive right in!

4 Ways to buy a house with cryptocurrencies 

1. Use it as a down payment

If you want to leverage your crypto for real estate, you need to use it as a down payment. Several new fintech platforms are releasing new products for this purpose. For example, several crypto lenders online offer you a crypto-backed loan with low annual percentage rates from 1% to 6%. Most of these loans can be used for large purchases such as real estate and autos. 

What are some popular online crypto lenders that you can use? 

 - CoinRabbit 
 - Celsius
 - Gemini 
 - BlockFi 
 - MoneyToken 
 - CoinLoan, etc. 

These types of companies can help each individual, regardless of whether they have large capital. The whole idea of a crypto loan is to ensure that borrowers don’t need to liquidate their crypto holdings to access financing. Moreover, you don’t need to cash out your crypto and pay taxes when buying a house or property! 

However, remember that not every crypto loan is suitable and differs in each state, so it’s pretty challenging to determine their loan-to-value (LTV) ratio because cryptocurrencies are always volatile. 

Each lender giving you a loan will have its own LTV ratio and be issued based on the current market price. For instance, due to the crypto market crash, if you were to get a loan for 1 BTC (Bitcoin), its market price would be around $17,000. 

Unless you are using USDT (Tether), the private value of cryptocurrencies is constantly swinging back and forth. Therefore, the loan-to-value (LTV) ratio continually moves back and forth. 

2. Converting your crypto assets to USDT or any other fiat currency

When buying property, you can convert crypto assets to fiat currency whenever the coins are more profitable. Overall, cryptocurrencies fluctuate in price each day and are highly volatile. Depending on which country you live in, you should invest in that type of cryptocurrency. 

Sometimes, this is a significant issue because each cryptocurrency changes in value and may be different after a couple of hours, a day, etc. Therefore, if the property you are purchasing requires you to pay in USD, always ensure the value is high enough and refrain from making any purchases when the price is low. 

For example, if you buy SOL (Solano) and your crypto capital is all invested in SOL, you can convert it to fiat currencies available on the platform. 

3. Purchase directly with cryptocurrencies

Plenty of properties don’t require you to pay in fiat currencies but allow the payment to be made in cryptocurrencies as well. Moreover, several brokers promote the ability to accept cryptocurrencies for home purchases and convert them into fiat currency. 

Furthermore, there is only a small drawback when purchasing properties with crypto because it falls in the area of trust accounts. Once a deal is done, a lawyer or broker will hold an agreement on the purchase price used. However, remember that digital currencies can’t be entirely trusted and you must always be careful. 

4. Non-fungible tokens (NFTs) 

Non-fungible tokens (NFTs) are another form of digital art collectibles. Digital code records are also known as smart contracts. In other words, the NFT can act as a payment form if the property owner accepts it as payment. 

NFTs are becoming extremely popular and many of them are increasing in value. You can purchase NFTs earlier and have more value from them in the long term. Once they gain value, you can use them to purchase properties. NFT prices vary and there are plenty that are worth millions. If you want to buy NFTs on the best sites, here are some we recommend you can use: 

 - OpenSea
 - Binance
 - Nifty Gateway 
 - SuperRare 
 - Rarible 

Advantages of purchasing properties with cryptocurrencies 

Smart contracts 
Since cryptocurrencies rely on the blockchain, it has completely changed how real estate transactions are recorded. In short, cryptocurrencies reduce the paperwork needed when conducting a real estate transaction, so this is eco-friendly and better for you. 

Very few intermediaries 
When there are fewer intermediaries involved in property purchasing, it’s much better for you. With fewer intermediaries, you pay fewer fees and see a much more efficient closing process. However, remember that you can never avoid lawyers, closing costs, and agents. Even though it’s the crypto world, you still must take on them when purchasing properties with cryptocurrencies. 

Properties can be traded online
Using this blockchain makes it possible for properties to be traded online the same way a cryptocurrency token is. Moreover, you can now trade in virtual properties in the metaverse. These properties aren’t the same and it’ll take some time for virtual properties to become even more popular in the future. 

Deflationary
Yes, cryptocurrencies are “immune” to inflation and aren’t impacted by it. However, just like the current global situation, inflation affects fiat currencies, which causes a problem in purchases. As a result, prices go up; thus, it’s a huge issue for customers who are part of the low and middle classes. 

However, purchasing properties with cryptocurrencies isn’t the same. Even though the market is quite volatile, you still have many less volatile cryptocurrencies and highly stable long-term. 

A few disadvantages when purchasing a home with a cryptocurrency 

The locations are limited

A downside of purchasing properties with cryptocurrencies is how few global sellers are, narrowing down the choice of choosing a location for buying a home that you wish to do so. 

Not enough sellers 

Sometimes it might be hard to find real estate agents that accept cryptocurrencies, but there are still quite a few. Over time, they are becoming more available, but it’s a matter of time before most of them start accepting cryptocurrencies. 

Why is purchasing a home with a decentralized currency a good idea?

Before you move on with your purchase, you need to identify what you want to do with your purchase and how you can use cryptocurrencies to purchase a house. Crypto was initially supposed to be a decentralized asset and while the mortgage industry is built around lenders, 

it’s pretty awkward that you need to take a mortgage out of a bank and then pay it back. However, this isn’t the case with a decentralized system because it entirely promotes a payment system that is quicker and requires fewer financial intermediaries to be involved. 

Online digital assets, such as cryptocurrencies, give you a much higher level of diversity. In this case, you are trading a volatile asset for one with lots of long-term benefits. For example, imagine if you invested in Bitcoin in 2010. During the first year it got released, its price value was less than $100. If you invested back then in Bitcoin, your return on investment would now be much larger. 

Furthermore, every time you cash out your crypto holdings, pay close attention to the price points and whether or not you made any gains during the investment. 

Will you need to pay any maintenance fees when using cryptocurrencies to purchase properties? 

When you buy a property with cryptocurrencies, you might be required to pay maintenance fees. Maintenance fees are the type of fees you pay for when keeping up with the property and having to pay for small repairs and improvements that need to be made. 

Furthermore, there are many properties that won’t accept cryptocurrencies just yet, but there isn’t any reason for them to not accept it further on. You never know! The future is going towards a decentralized system, so always stay updated. 

Are cryptocurrencies the future of buying properties? 

You bet so! Cryptocurrencies are continuously changing in value and an excellent method for buying properties. Even though many sales agents still haven’t approved the process of allowing cryptocurrencies to purchase properties. However, it’s becoming more common each day, because the future is heading towards a new start. 

Even though they are highly volatile, they still have great value and might be an excellent conversion for you in the long-term. In short, you are exchanging a volatile asset for a long-term one and there is nothing bad about that. 

About the author: 

 

Tony Ademi is a freelance SEO content and copywriter. He has been in the writing industry for three years and has managed to write hundreds of SEO-optimized articles. Moreover, he has written articles that have ranked #1 on Google. Tony’s primary concern when writing an article is to do extensive research and ensure that the reader is engaged until the end.