Fractional, low-capital investment in real estate

The world of real estate investment is undergoing a significant transformation with the rise of fractional ownership and blockchain technology. These innovations are opening up new opportunities for young and tech-savvy individuals who have traditionally been excluded from the property market due to high capital requirements. CNBC Africa recently sat down with Joshua Johnson, partner at Liquid Manzana, to delve into how this technology is revolutionizing the investment landscape. Johnson explained that fractional real estate differs from traditional crowdfunding by providing investors with real legal ownership of land through digital tokens. Rather than just pooling money with limited control, investors can now own shares in international real estate, similar to owning stocks on a local stock exchange. This new model offers passive income potential from property revenue and a unique staking program that rewards long-term investors with a share of marketplace trading fees. The concept of holding tokens to earn dividends for property ownership marks a shift towards democratizing real estate investment. However, Johnson acknowledged the limitations of using cryptocurrency due to regulatory challenges and integration issues. To address these concerns, Liquid Manzana has ensured full compliance with regulatory standards and worked closely with regulators in El Salvador to create a secure marketplace for African investors. The company accepts both traditional fiat currency and cryptocurrency, providing flexibility for investors to participate in global real estate markets. Despite the volatility of cryptocurrency, Johnson emphasized the security of smart contracts in protecting investors' interests. Smart contracts serve as a trustless system that executes transactions based on predefined parameters, eliminating the need for intermediaries and ensuring transparency in real estate transactions. In terms of market trends, Johnson highlighted the importance of liquidity in driving the adoption of tokenized real estate assets. Liquid Manzana has implemented strategies to enhance liquidity for investors, including professional market makers, token buybacks, and a tiered system that rewards active participants. These initiatives have transformed real estate from a traditionally illiquid asset class to a highly tradable investment, particularly beneficial for African investors seeking to diversify their portfolios. Johnson emphasized that liquidity will play a crucial role in unlocking the full potential of tokenized real estate investments and driving market growth.