When it comes to making financial decisions, it is common to encounter choices that may seem similar, but have very different implications and outcomes. An example of this is the choice between receiving a sum of €50,000 in cash or acquiring 500 real estate tokens. In this article, we will explore the differences and the potential benefits that each option can offer.
WHAT ARE TOKENS?
First, it is important to understand what real estate tokens are and how they work. Real estate tokens are digital units that represent a fraction of a property. In the case of Equito, each token is worth €100, which means that purchasing 500 tokens would be equivalent to investing €50,000. Property tokenisation allows investors to participate in the real estate market with smaller amounts of money, democratising access to this type of investment.
BENEFITS OF TOKENISATION
But what are the benefits of choosing 500 tokens instead of €50,000 in cash? The answer lies in the generation of income and possible long-term capital gains. If we take the example of EQT-0004 where the return is 7%. This means that, if we invest in 500 tokens with a total value of €50,000, we could expect to generate an annual income of 7% on that amount, i.e. €3,500.
In addition to the rental income, there is the possibility of making a capital gain by selling the property tokens in the future. If the value of the properties increases over time, the price of the tokens would also increase, which could generate an additional profit. It is important to note that the capital gain will depend on fluctuations in the real estate market and is not guaranteed.
In contrast, receiving €50,000 in cash might seem a more attractive option at first glance. However, it is essential to consider that this money will not generate income on its own. Unless you are an investment expert or have a sound financial strategy, that €50,000 may not grow significantly over time. In addition, the value of money is subject to inflation, which means that over time that €50,000 could have less purchasing power.
On the other hand, the 500 real estate tokens offer us the opportunity to earn monthly income and participate in the real estate market in a diversified way, as an investment in several properties is distributed across the tokens. In addition, tokenisation allows for greater liquidity, as investors can buy and sell tokens more easily compared to selling a physical property.
50.000 € VS. 500 TOKENS
It is important to note that there are pros and cons to choosing between receiving €50,000 in cash and acquiring 500 real estate tokens. It will depend on each individual's personal circumstances and financial goals. However, it is crucial to consider the income-generating potential and diversification that real estate tokens can offer, as well as the potential for long-term capital appreciation.
As with any investment, it is advisable to carefully evaluate the options and seek professional financial advice in order to make the most appropriate decision for your needs and objectives.