Real Estate Tokenization: Making Premium Property Investment Accessible for Small Investors
Real estate tokenization is revolutionizing the way small investors can access high-value properties, making it as easy as investing in a mutual fund.
Real Estate TokenizationProperty InvestmentSmall InvestorsAlt DrxMint Money FestivalReal Estate NewsSep 30, 2025
It is the process of dividing a property into digital tokens on an online platform, each representing fractional ownership. This allows investors to buy small portions of high-value properties through these tokens, making real estate investment more affordable and accessible.
“Avinash Rao, founder of Alt DRX, highlighted at the Mint Money Festival that it can be as accessible as a mutual fund. Real estate need not be a hyperlocal asset class,” he said. He argued that the scale of opportunity is significant.
Around 300,000 homes are sold each year in India’s primary real estate market alone, representing more than $200 billion in value. Yet, only a fraction of investors actively participates because of high entry costs and illiquidity.
The income from tokenized real estate is in the form of rent and capital appreciation. If the property generates rent, investors receive a share in proportion to the tokens they hold. Rao emphasised the potential of such investments in portfolio diversification.
“You don’t need to make a bank-breaking investment to participate in capital appreciation. Smart, smaller investments across multiple properties can yield meaningful returns over time,” he said.
Platforms such as Alt DRX allow investors to browse listed properties, check related information like location, market value, and developer details, and invest digitally. Investors can choose from land plots, holiday homes, and rental housing, depending on their goals.
The platform lets investors track rental income and asset updates and provides access to a resale marketplace to sell the tokens.
“Most people invest in real estate for capital appreciation and tokenization makes that possible even with small ticket sizes,” Rao said.
Rao mentioned that these are treated like digital assets and income is taxed at a flat 30% tax rate.
Real estate tokenization is different from Real Estate Investment Trusts (Reits). Tokenization gives investors direct fractional ownership of a property, and the returns are linked to its rent and value appreciation. Reits, on the other hand, pool investor money to buy and manage a portfolio of properties, and investors own units of the trust, not individual properties. In short, tokenization is property-specific, whereas Reits offer diversified, fund-like exposure.
While tokenization democratizes real estate investment, it is not without risks. It is currently unregulated and sudden regulatory changes could impact investors. Rao said they are working with regulators to become a regulated financial product.
“Gift City has already mooted norms for tokenization,” he added. The International Financial Services Centres Authority, the regulator at Gift City, is examining tokenized models for physical assets.
Liquidity may also be constrained since the secondary market for tokens is still developing, meaning exits may not always be immediate. As with all investments, careful research, platform selection, and a long-term perspective remain essential for mitigating these risks.
Frequently Asked Questions
What is real estate tokenization?
Real estate tokenization is the process of dividing a property into digital tokens on an online platform, each representing fractional ownership. This allows investors to buy small portions of high-value properties through these tokens.
How does real estate tokenization benefit small investors?
It makes high-value property investment more affordable by allowing small investors to buy fractional shares of properties with as little as ₹10,000, thus democratizing access to premium real estate.
What are the potential returns from tokenized real estate?
Investors can earn returns from rent and capital appreciation. If the property generates rent, investors receive a share in proportion to the tokens they hold.
What is the difference between real estate tokenization and REITs?
Tokenization gives investors direct fractional ownership of a property, while REITs pool investor money to buy and manage a portfolio of properties. Investors in REITs own units of the trust, not individual properties.
What are the risks associated with real estate tokenization?
Risks include regulatory uncertainty, as it is currently unregulated, and liquidity constraints since the secondary market for tokens is still developing. Careful research and a long-term perspective are essential.
Related News Articles
Retail Revolution: India's Retail Space Expected to Boom by 50%
The top seven cities in India, including Mumbai, Delhi NCR, Bengaluru, Hyderabad, Pune, Kolkata, and Chennai, are projected to witness a surge in retail space, with Delhi NCR leading the charge.
Insolvency Proceedings Initiated Against Jaiprakash Associates by NCLT
The National Company Law Tribunal (NCLT) has initiated insolvency proceedings against Jaiprakash Associates, a leading real estate developer, following a plea by ICICI Bank.
Whiteland Corp Partners with Marriott International for Luxurious Housing Project in Gurgaon
Real estate developer Whiteland Corporation has signed an agreement with Marriott International to bring Westin Residences to Gurgaon, offering a luxurious housing project with hotel-inspired lifestyle
New LTCG Rules Bring Relief to Homeowners, Boost Real Estate Stocks
The Finance Minister's decision to amend the LTCG rules has brought cheer to homeowners and boosted real estate stocks. Here's what it means for you.
Shaping Urban India: The Evolution of Real Estate Since Independence
India's real estate sector has played a pivotal role in shaping urban development since independence. With the urban population growing from 62 million in 1947 to over 485 million today, the sector has undergone significant transformations.
Mumbai Police Arrests Conman Who Duped Real Estate Developer of ₹4 Crore and 3.5Kg Gold
Worli police apprehended Dhirendra Chandrakant Shukla, a wanted real estate agent, for duping Avighna Group of Rs2 crore and 3.5kg gold by promising a vacant plot in Worli for development.