Frequently Asked Questions
Tokenization is the process of representing a fractional ownership interest in a property with a blockchain-based digital token. Real estate asset tokenization represents the convergence of real estate investment and blockchain technology. Each token represents direct ownership of the asset, such as a parcel of real estate, a share in a company owning real estate, a participation in a real estate investment fund, property-related payment rights (such as dividends, distributions or a share of profits), or any number of potential derivatives.
Blockchain is just the name for the secure digital ledger technology built on. Since these digital ledgers are protected with cryptography, the whole field came to be known as “crypto.” This technology has already been around for over a decade and is used by regulated organizations such as banks and governments for applications like supply chain tracking, internet of things (IoT), as well as for digital currencies most famously, Bitcoin.
A digital accounting of value prompts a number of risks. It is important to have a system where issuance, storing, and transferring of value is performed with a sufficient level of reliability, efficiency, and transparency for all participants. For this reason, blockchain technology is well suited; security of data is guaranteed by cryptography, while any attempts to violate the accounting rules are particularly apparent to an auditor.
Yes it is. PropertyHandle follows strict know your customer (KYC) and anti-money laundering (AML) protocols and is compliant with regulations in various jurisdictions. We provide rigorous identity checks prior to an investment opportunity being listed.
In cases which require it, we also ascertain that an individual or organization is a properly accredited investor when there is a regulatory requirement to do so. We strongly advise all investors and asset owners to find out the rules for proper reporting of tokenization income to comply with their local tax regulations. We believe regulatory compliance rules exist to keep investors and asset owners safer, and we go above and beyond to ensure compliance and use our technology to make the process easier.
Tokens are issued as a secure digital file. Investors may store the tokens in their wallet if they choose to or entrust them to a custodian.
An investor is provided with a legally relevant ownership of the underlying asset and is also able to quickly and reliably transfer this right to others without having to transfer the asset itself. The property token is legitimate and unique in the registry where the record of property tokens is maintained and a custodian secures the physical asset. Once a real estate asset is represented by digital token and governed by the transactional rules of the smart contract on PropertyHandle where these tokens are issued, the frictions of transacting between two or more parties is considerably reduced and most importantly, completely online. Our award-winning blockchain solution allows investors to customize their diversification, without being locked up for 7-10 years in an investment. Additionally, tokens offer investors more liquidity due to the fact that their investments are exposed to a global digital economy.
PropertyHandle creates an opportunity for investors who couldn’t ordinarily invest in real estate investments. More investors can mean a quicker time to completing the raise. Investment is also faster and simpler thanks to operating transactions through a fully-digital online platform rather than third parties, bureaucracy, and paperwork.
Primarily, a token implies a record in the property rights registry that states that an asset belongs to a certain user. Transferring a token “hand-to-hand” means changing the owner of an asset in the registry. In addition, this approach opens up a number of opportunities for trading; an asset can be bought, sold, or donated and you are able to do it swiftly and securely.
Yes they are! PropertyHandle tokens are fungible, meaning they can be traded. Investors can enjoy the benefits of secondary trading to support our commitment to maximum liquidity.
Because the real physical asset is stored locally by the custodian, while the transfer of ownership rights for this asset is carried out within the digital accounting system. We implement the system in such a way that the change of ownership history can be easily traced.
For example, it is possible to tokenize the property rights to Joina City building in Harare. Due to the possibility of fractional ownership, one token can be equal to 1 square meter of the building. Therefore, there will now be a particular number of leaseholders (renters) and thousands of lease providers (investors) who are regular people who fractionally own Joina City and earn their monthly rent profit out of the tokens they have invested. The guarantor of token change to Joina City is the current owner. In such a case, an external auditor confirms updates of an accounting system in real time, while an extra auditor verifies the correct interaction of a token and shares of the building.
No. Property tokens offered on PropertyHandle shouldn’t be confused with cryptocurrencies like Bitcoin, Ethereum, et cetera. You may have also heard of utility tokens, which are not backed by real assets but rather represent future value of a company’s goods or services. Unlike both of these models, PropertyHandle tokens are backed by real estate, which has the advantage of a standardized valuation (appraisal methods) giving the tokens a verifiable real-world value.
Each investor will own a share of a specific property. The returns earned on a property will be issued to you as dividends according to your proportion of ownership in the property using smart contracts and provides certain tax benefits. Dividends calculated are based on the rental incomes of the property less the property related costs. These costs include and are not limited to, repairs and maintenance, management fees, utilities and SPV administration fees.
In order to raise capital on your property or development, PropertyHandle requires you to verify your account and share certain personal, business and property information. Your property can be either a development or an existing property.
A SPV (Special Purpose Vehicle) is created for each listed investment with the sole purpose of holding the property, to accommodate a multitude of investors and manage all incomes and expenses as well as external record of ownership to the token holders. The title deed of the property is registered under the name of the SPV, however the tokens/shares that you will receive as an investor will entitle you to ownership in the underlying asset. Each investment property is held in a separate SPV for the purpose of ensuring that no other investment can negatively impact another unless it is a REIT or FUND structure with a diversified offering. The tokens of each SPV are unique.
- ID Document or Valid Passport
- Certified proof of residence
- Income tax number (optional)
- Company Registration Documents
- Company proof of residence
- Proof of tax number and VAT number (if registered for VAT)
- Directors ID Documents
- Directors Proof of Residence
PropertyHandle reserves the right to ask for additional verification. In addition to the above requirements, property owners and developers are required to provide the necessary information on their property asset that will be used in the due diligence process.
Let's Find You Together the Place You Deserve
Get in touch with us and we will reply shorty.