Bitcoin is a next-gen, all-digital currency that’s already a global phenomenon.
Developed with high levels of security and anonymity in mind, it’s touted as a potential replacement for paper- and coin-based money in the near future.
Some industries, including real estate, are capitalizing on this emerging trend by letting clients buy property via Bitcoin. It’s a significant departure from tradition, but it’s one that is quickly gaining momentum.
- Miami, Florida
A Miami man recently made news by selling his home in Coral Gables for over $6 mln — or approximately 1,600 BTC.
The steep selling price is enough to rattle the headlines, but Bitcoin has been a part of the Miami real estate market for several years. Although it was only launched in 2009, tech-savvy real estate agents, investors and buyers quickly embraced the new cryptocurrency.
Realtors in the area are confident that South Florida — particularly Miami — is an ideal market for Bitcoin. They cite the worldwide reach of Bitcoin as a primary factor in driving increased interest and attention to the region. Using an alternate form of currency opens up properties to buyers and investors from all over the world, including Asia, Canada, South America and more.
- Dubai, UAE
The United States isn’t the only country to capitalize on the growing Bitcoin trend. A developer located on the Isle of Man recently announced plans for a joint residential-commercial development valued at $325 mln. Prospective residents will be able to use Bitcoin to purchase their property, with studio apartments starting at 33 BTC and one-bedroom apartments from 54 BTC — or approximately $250,000.
Some of the development’s units have already been sold for modern currency, but the remaining residential properties are reserved for Bitcoin purchases. Commercial units are not currently available for purchase via the popular cryptocurrency.
- New York, New York
Investors and real estate agents in The Big Apple also believe Bitcoin is the way of the future. The team with Magnum Real Estate is assuming a huge risk by accepting Bitcoin for deposits and purchases for recently converted apartments in Manhattan’s East Village. Known as Liberty Toye, the property represents a huge shift in the way we conduct business this century.
Real estate investment trusts have been looking to diversify their portfolios this year, and New York City provides the ideal launching ground. Known as an entrepreneurial-minded city that isn’t afraid to take risks, we already see homes and apartments available for Bitcoin. It’s only a matter of time until commercial buildings follow suit.
- Lake Tahoe, California
The popular vacation destination of Lake Tahoe accepts Bitcoin, too. An unnamed buyer recently purchased a 1.4-acre property with Bitcoin on a 42-site resort. The undeveloped property sold for $1.6 mln, or 2,739 BTC, making it the largest Bitcoin-driven real estate transaction at the time it happened in 2013.
According to reports, the Bitcoin purchase was originally the buyer’s idea. While we haven’t seen any further developments involving Bitcoin in the Lake Tahoe real estate market, the sale shows off the potential of digital currency in the industry and opens the way for future deals in both the residential and commercial sectors.
- Bali, Indonesia
The island of Indonesia isn’t the first place you’d expect to see a Bitcoin-backed real estate transaction, but it was actually among the first locations to support the cryptocurrency.
An unnamed buyer spent more than 800 Bitcoins, totaling approximately $500,000 at the time, for a villa in Bali.
Although residential real estate agents and buyers are comfortable with using Bitcoin to purchase real estate in Bali, we have yet to see any listings in the commercial or industrial markets.
Despite the uncertainty of the Bitcoin market, tech-savvy investors and agents are — at least for the time being — willing to take a risk on the cryptocurrency.
There are many advantages in doing so, but the risks are too steep for some to take the plunge.
To learn more about purchasing real estate with Bitcoin, contact an expert member of the 9 Core Realty team.