In recent years, cryptocurrency has proven to be a phenomenal investment for many people, provided that it’s invested wisely. An inherently volatile commodity, the price of crypto can surge or fall at a moment’s notice. This volatility has made many people rich and some people quite the opposite.
Some cryptocurrencies, like Bitcoin, have transformed themselves from being worth a couple of cents to being worth thousands of dollars. It’s clear to most people that digital currencies are a force to be reckoned with and are here to stay. This means that investors are starting to think big about what to do with crypto profits.
However, any savvy investor will tell you that it’s important to diversify a portfolio. In fact, many market experts recommend limiting your crypto portfolio exposure to just 10%.
But if you love crypto, but are looking to diversify to weather any financial storms and not put all of your eggs in one basket, then property is the answer for you. More specifically, buying a property with crypto!
Historically, a solid property purchase can provide an investor with a reliable income stream, a form of stability to add to a portfolio, and access to leverage at relatively low risk.
It can be a steady source of income, lends stability to the portfolio and allows leverage at very low risk. But can you buy a property using cryptocurrency? Yes, you can! This guide will show you how to do it and the benefits involved, easily!
However, before we begin, it’s crucial to drop some solid advice on investing and trading in crypto. This is a volatile space, so ensure you know what you’re doing before investing and never invest more than you can afford. Following the guidance of crypto experts, make sure to trade crypto through reputable apps and platforms only. Bitcoin Up, for instance, offers free registration and access to reliable brokers to minimize potential risks from trading. To benefit from all the available tools and information that the platform offers, you will need to sign up for free or login to your Bitcoin up account. It will be also helpful if you look for a bitcoin ethereum fr guide if you want to sign up
Wait, I Can Buy a Property with Crypto?
Yep! It might have sounded crazy just a few years back in the early days of crypto, but buying properties using crypto is now amazingly commonplace. The first person to do so was a former actor turned entrepreneur, Brock Pierce.
Pierce, now the director of the Bitcoin Foundation, successfully bought a luxury property in the heart of Amsterdam using more than $1 million worth of Bitcoin.
Of course, you don’t need to be a successful millionaire like Pierce to buy a property with crypto. However, due to cryptocurrency being a relatively new concept, it’s not all plain sailing, and there are a few important things to consider before diving in.
After all, the volatility mentioned above that often comes as standard with digital currencies can present a range of serious issues sometimes.
But don’t worry; we’ll guide you through the entire process. By the end of this guide, you’ll be nothing short of a crypto property-buying pro!
The Top Three Ways YOU Can Buy Property with Crypto
Depending on your personal situation, the property in question, and the method that works best for you, there are three main ways that you can buy a property using decentralised currency. Let’s look into them!
Convert Your Crypto to Cash
The first method of using a crypto portfolio to buy a property is also the most straightforward one. You simply need to exchange the adequate amount of crypto for conventional fiat cash and then utilise the money to purchase the property you have your eye on.
Borrow Against Your Cryptocurrency
The following method is using a third-party platform, such as Nexo, to utilise your crypto assets as collateral to secure a fiat loan. Then, once you have a loan, you can use it to buy a property of your choice.
However, it’s worth bearing in mind that, using this method, you’ll likely find that interest rates are higher than a conventional mortgage.
Transfer Crypto to the Person Selling the Property Directly
The third and often most challenging method is to pay for a property directly using cryptocurrency to cover the money owed to the seller. The initial hurdle for this type of method is finding a seller who is open to accepting such a large amount in crypto, to begin with.
After all, crypto is still a relatively new concept to an age-old market such as property. However, it is becoming increasingly popular amongst sellers who are more open to the financial technology of the future. If you find the latter, especially if they’re actively seeking to pump up their portfolio with a reliable crypto asset like Ethereum and Bitcoin, you may find yourself in an advantageous position as their ideal buyer.
What Are the Upsides to Using Cryptocurrency to Buy Property?
The pros of using crypto to buy property can vary drastically, depending on which method outlined above you use. However, here are a few upsides that you’ll likely find engaging.
- You’ll be swapping the volatility of an asset like crypto for a less volatile and more stable investment in the form of property.
- The volatility of crypto means its price can swing wildly, sometimes in the space of hours. Property is often far more stable and can maintain a reliable price.
- Comparing the transfers involved in conventional property sales, the transfer of cryptocurrency as payment is much quicker. It can be compared to buying a home with cash as it eliminates the need for the stress, paperwork, and long-drawn-out affairs that come with the likes of mortgages and other loans.
- Find a pro-crypto property seller who is actively seeking to boost their portfolio with cryptocurrency. You can use the fact you intend to pay with crypto to your advantage and potentially get a lower price and other benefits.
What Are the Downsides to Buying Property with Digital Currency?
Where there are pros, there are naturally cons. The property market is as old as time, and cryptocurrency isn’t! So across the property industry, cryptocurrency is still becoming established. If you’re planning to buy property with crypto, be aware of the following:
- Property sellers who will accept the entire property value entirely in crypto are few and far between. This means that the range of property you can buy with crypto will likely be limited.
- Unlike conventional transactions, buyers are awarded lesser protection when paying for a property with crypto. One of cryptocurrency’s biggest draws is that most digital assets are secure and anonymous. However, this means that you may be in an awkward situation if anything goes wrong with the transaction or the property itself. So always consult a licensed legal professional.
- And last but not least is the volatility of crypto working against you. The value of cryptocurrencies changes like the weather and can go from a few cents to thousands of dollars in the space of a few months. Can you imagine offering a stack of Ethereum for a home, only to watch Ethereum then quadruple in value a few months later?
In Conclusion
And so, to sum up, it’s absolutely possible to buy a property with cryptocurrency, and there are a number of ways to do so. There are a lot of upsides to using crypto in a property transaction, but quite a few downsides to consider too.
So, if you’re thinking of using crypto to buy a property, do your research and understand what you’re getting into. If you’re not comfortable being the first ones into the fray regarding crypto and property, perhaps give the latter industry a little more time to incorporate digital currency into its midst properly and, in the meantime, use your crypto to trade wisely on the markets.
But if you don’t want to wait, feel free to get stuck into the wild world of buying a property with cryptocurrency and take advantage of the numerous benefits that can potentially come with it!
