Before diving into how do you know that you can Buy a House with Cryptocurrency? Yes, this whole Bitcoin-meets-penthouse is undoubtedly real. Cryptocurrency is quickly escalating as the new preferred peer-to-peer payment method. Many favorable investors want cryptocurrency to become a mainstream asset. And sure, it looks that way; everything will soon be bought via virtual currency, from parking spots to high-end mansions.
According to the famous US magazine Business Insider, in 2018, luxury apartments were sold in exchange for cryptocurrency. Several real estate developers express their desire to sell their properties for cryptocurrency; this is especially popular among online brokers(buyers, sellers, and investors)
For example, global real estate firms such as Kuper Sotheby’s International Realty and Glen Oaks Escrow of the Pango Group started using bitcoin for real estate transactions in 2017 and 2021, respectively. If one searches for examples of such real estate properties, Madinat Jumeirah Living and Port De La Mer Le Ciel are among the top.
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So how can you buy properties with cryptocurrency?
There are two different options for real estate and doing transactions & buying properties with cryptocurrency.
The first option is Bitcoin- USD real estate transaction.
This option implies that a seller wants to trade only with dollars, not bitcoin. Hence, in this case, you can exchange your cryptocurrency for cash and pay as required.
Next option is All-Bitcoin real estate transaction
Here, the seller is willing to accept bitcoin. So, the purchaser will transfer the Bitcoin from his digital wallet to the seller. Thus, in this case, you can negotiate the price and freely pay with your Bitcoin.
Regarding real estate transactions, Bitcoin rules over every other cryptocurrency. It can be and already is an alternative to standard, long-established real money. Due to its wide reception and integration, many states have equipped an online payment system or the property you buy at its expense with a digital property or a commodity.
You can also borrow against cryptocurrency. For instance, companies like Nexo accept using your cryptocurrency as security/assurance to obtain a loan in authorized money, which you can use to buy real estate. However, it’s just that you might encounter higher interest rates than you would with a typical mortgage (8% or more. And there can be issues with the IRS flagging your account when a big chunk of money appears. On the plus side, if you want to use your cryptocurrency as a long-term investment, it will remain in your account, and its value can continue to follow the market trends.
Read more: A Beginner’s Guide to Real Estate Tokenization
Real estate transactions, even via crypto, aren’t a tax-free procedure so have a proper legal and tax structure in place. Go for title insurance and escrow companies that handle cryptocurrency transactions and don’t just focus on cash. If you find these, the transaction will be in Bitcoin or Ethereum.
Get a more secure asset as bitcoin is highly volatile; the value can drop more than what you paid for it. Or it could also become more valuable. There are daily fluctuations, so opting for a relatively secure asset is crucial. Find a seller with cryptocurrency; chances are they might also offer you a potential discount.
To sum up, the answer to whether you can buy a house with cryptocurrency is a yes, as long as you can find sellers open to cryptocurrencies. The most glaring drawback when purchasing real estate with cryptocurrency is that people still know little about virtual currency. This payment method has only recently come to light. So there is no wonder people feel nervous making payments with cash they don’t understand. Difficulties with finding a seller
Finding someone who can accept Bitcoin might not be easy if you would like to trade your crypto for a house. You know, this is not about traditional home listing sites. The path will not be so easy.
Some sellers will indicate that they are crypto-friendly. But these are rather exceptions. For cryptocurrency users, security and anonymity are two of its main selling points. However, transactions are difficult to trace, so you could face a sticky legal situation if anything goes wrong. A legal professional needs to be consulted to know how to protect yourself. Also, consult a tax professional to learn about your tax liability and how using cryptocurrency to acquire a home may affect you because the IRS considers cryptocurrency a type of property that must be sold to realize its value in dollars. Having said that,
Cryptocurrency deals are legit, legal, enforceable, efficient, and here to stay. While not everyone can be a “Bitcoin billionaire” like Pierce, you can convert your cryptocurrency into real estate. Cryptocurrencies are disrupting several industries, and real estate is one of them. The possibility of these spectacular gains that can earn you a huge fortune is the most exciting quality of the cryptocurrency world. It goes without saying that the first fundamental thing one needs to do before any investment or trading is – research. Get an estimate of the risks involved, and avoid investing in the project if the stakes are too high. The cryptocurrency community is putting its best efforts into regulating token sales. You must conduct due diligence and take the help of useful resources and guides such as crypto exchange guides and wallet guides. All this will help you start your journey in the complex crypto world.