Whether we are talking about trading, investing, renting or buying, the truth is that this idea comes with perquisites as well including cost reduction, privacy, particularly for those who intend to purchase property, easier international transactions and tax avoidance.
Of course, we cannot forget the most obvious benefit of all – using Bitcoin in real estate transactions captivates the attention of the press – probably this explains how a Bitcoin enthusiast managed to sell his property in 2017 through a non-so-typical real estate transaction based on cryptocurrency.
Since the moment it made its appearance, Bitcoin undoubtedly enjoyed great popularity, which also led to a considerable rise in value, but will it offer stability? Can you use it in DST Real Estate Investments & 1031 Exchange?
Find someone willing to accept Bitcoin as payment
Taking into account that real estate professionals have no intention of giving up on cryptocurrency, some states even started working towards changing their laws in order to give them the permission to finance real estate transactions with Bitcoin.
Consequently, the industry does not miss a single opportunity to make use of this popular digital currency in various ways. For instance, those who intend to purchase properties have the possibility to resort to Bitcoin for the payment. In this case, sellers have two options: accept the Bitcoin in his current form or turn it into cash – the traditional currency.
However, the following question inevitably arises: how do you actually conduct a cryptocurrency real estate transaction? Well, even though cryptocurrency gradually became a common topic of conversation in various industries, not just real estate, not everyone is willing to accept it as a payment method.
For this reason, those who want to buy a house with Bitcoin need to find someone willing to accept the exchange to begin with or at least agree on converting it into money, which represents an additional step to the process.
Converting the Bitcoin to real cash might require additional steps
The only inconvenient is that converting the Bitcoin not only takes more time, but it also requires a specific fee.
Furthermore, when it comes to house mortgages, although opting for Bitcoin is more than possible, it makes the buying process more complicate because home sellers might agree on a Bitcoin offer, but lenders might not share the same enthusiasm for this popular digital currency.
Apart from these minor details, the process is not very different from a cash sale.
However, documenting the conversion is crucial because mortgage lenders must determine where the cash deposits come from to rule out any potential illegal activity. In some cases, the buyer has to sign a declaration, which states the source of the money because it eliminates the possibility of a debt. In conclusion, including Bitcoin in real estate transactions is possible, but it comes with additional precautionary measures.