In 2011, a person could buy a single bitcoin unit for about $1. That same unit is worth over $4,500 today, and a modest $100 investment in 2011 would be worth well over $450,000 now. Several people who took advantage of the lucrative opportunity back then became millionaires, and they are looking for ways to use their virtual currency. In recent months, some bitcoin millionaires have set their sights on the real estate market.
Miami Mansion Selling For Bitcoins
A well-known bitcoin trader in Miami listed his mansion for 1,400 bitcoins, which is equal to $6.5 million. Also, the millionaire said that he would accept greenbacks or Zcash if interested buyers did not want to pay in U.S. dollars. The opulent home boasts 9,500 square feet of space and is nestled in one of Miami’s upscale neighborhoods. This creative man is not alone in hoping to sell property for bitcoins or another cryptocurrency. Experts in blockchain technology agree that bitcoin and other cryptocurrencies will bring revolutionary changes in the real estate market soon.
Why Bitcoin For Real Estate?
A coder created the bitcoin currency in 2009, and it became the first cryptocurrency. Several virtual currencies emerged in 2010 and beyond. However, bitcoin took the strongest hold and grew significantly during the next several years. Lately, real estate agents in Miami have been realizing the advantages of using the bitcoin network for high-value home sales. Since bitcoin became popular, experts in the community have debated over its purpose. While some believe that it should retain low fees and be used for smaller transactions, others believe that it should be a virtual storage of cash.
Today, bitcoins are used as digital cash and for value storage. The bitcoin block size has been reduced, and the reconciliation area for pending transactions has been simplified. With the good news of a transaction cost reduction on the horizon, more investors and merchants are considering bitcoin transactions for both small and large purchases. Since property values often reach into the millions in bigger cities today, there are hefty bank fees associated with purchasing a home. If bitcoin transactions become cheaper, buyers have a crafty way to avoid traditional bank fees associated with using U.S. dollars.
According to multiple research papers focusing on American and Australian real estate transactions, most banks charge about $4,000 for a $100,000 purchase value. When a home’s purchase price reaches into the millions, the transaction fee climbs up to about $10,000. If bitcoin holders want to use the cryptocurrency to make a transaction of $1 million through a SegWit-enabled wallet, they can do so and will only have to pay a transaction fee of about $10. If other conditions are right, it is possible for sellers to accept even smaller fees for payment processing.
Bitcoin transactions also make payment facilitation simpler for real estate agents. Bank wire transfers in the millions can take over a month to process. Also, they create a large amount of paperwork and more correspondence for real estate agents. Financial and identity verification processes take several weeks as well. Bitcoin experts believe that making transactions with the popular cryptocurrency may yield fewer risks than cash purchases. When bitcoins are transferred from one party to another, the deal is complete. There are no lengthy identification processes.
The real estate agents who helped the previously mentioned Miami millionaire list his property agreed that the process was simpler. Although the transfer of funds happens faster, they said that a person must still make a modest escrow deposit while the transfer is in progress, which is a required part of the title process. According to the agents, the law requires that a transfer of value must happen for a real estate transaction to take place. However, the law does not specify that the value must be in dollars or cents. For example, a person could transfer ownership of a home to another person in exchange for 10 potatoes. This means that there are no regulations barring people from using bitcoins to make real estate transactions. People who are interested in buying or selling a home using a virtual currency should follow cryptocurrency trends.
About Samuel Strauch
In 1994, Samuel Strauch earned a bachelor’s degree in international business from Hofstra University. He also earned credentials in executive education in real estate and capital markets from Harvard University, and he studied international finance in Rotterdam at Erasmus University. After college, Mr. Strauch started a promising banking career. However, he decided to leave it and join his family’s South Florida real estate business. After gaining some experience, he started his own company in 2002 called Metrik Real Estate. That company has grown and is thriving today. Mr. Strauch specializes in real estate acquisitions, equity sourcing, management, development and brokerage. His company works with clients throughout South Florida and in parts of Latin America.
As an entrepreneur, Samuel Strauch is involved in several other business ventures. He is part of multiple web-based companies. Mr. Strauch is interested in photography and art. As a mental and physical health enthusiast, he enjoys meditation and cycling. Mr. Strauch believes that every person should be proactive in contributing to human growth and promoting positive change. Samuel Strauch attributes much of his success to his perpetual curiosity, which he said has helped him broaden his perspectives in his personal life and in his business ventures. He analyzes trends and watches how people want to live, travel, socialize and do other activities to help himself develop innovative ideas. Mr. Strauch is excited to watch how real estate transactions evolve in the future as cryptocurrencies gain more momentum.