When you're planning your financial future, you may feel overwhelmed by options. In this article, we’ll compare two popular choices – bonds and real estate tokenization. While the first one offers familiarity, the second presents a modern opportunity. Let’s figure out which one may better serve your goals.
Bonds are a classic safe haven
Stable income
A bond is basically a loan you give to a government or a company. They promise to pay you back with interest. What's good about bonds is that they're predictable. You know exactly what you'll earn, and they're easy to buy and sell.
Low return rates
The downside? Returns are usually just 3-4% per year, which may not even beat inflation, meaning your money doesn't grow much in real terms. Bonds are slow and steady savings, but not very exciting.
Traditional real estate is great, but expensive
Backed by real properties, offering both steady income and long-term growth, real estate is usually considered a solid investment. But the problem with traditional real estate is that you need lots of money to start, it's hard to sell quickly if you need to, and being a landlord often means a lot of work. This is why many people never get to invest in property – it's just too difficult and pricey.
However, tokenization helps to solve this problem.
How tokenization changes real estate
Tokenization converts a physical property into digital tokens, each representing a share of the property. Instead of buying an entire apartment, you can purchase tokens according to your budget. When you own a token, you’re entitled to a share of the property’s profits. As a result, you can start with a minimal investment amount.
Profits of tokenization
With tokenized real estate, you benefit from two revenue sources:
- Rental dividends – regular income from your share of the property’s rental earnings. It is usually paid monthly or quarterly.
- Property appreciation – as the property’s value increases, so does the value of your initial investment. As a result, the amount of money you invest grows over time.
High returns
Most importantly, tokenized real estate targets higher revenue, with a specific return on investment (ROI) individually projected for each property over the project's term. The ROI combines rental dividends with property value growth. For example, through NOVA, investors have the potential to earn up to 20% in annual returns.
Transparency and safety
Token ownership is managed through smart contracts, self-executing programs stored on the blockchain. These contracts securely issue tokens and record their data to eliminate human error, ensure transparency, and verifiability. Investors can monitor, transfer to personal wallets, and securely hold their tokens.
Investment in many properties
Tokenization allows you to diversify your portfolio effortlessly. Instead of tying up capital in a single property, you can spread your investment across multiple real estate assets. This diversification reduces risks and increases potential returns.
Easy to buy and sell
Unlike traditional real estate, which can take months to sell, tokens are traded much faster on digital platforms. This liquidity ensures you can access your funds way faster than in traditional real estate.
No management worries
When you invest in tokenized real estate, the responsibilities of property management, such as maintenance and tenant relations, are handled by professionals. This allows you to earn passive income without the hassles of being a landlord.
Final comparison between bonds and tokenized real estate
Amount of returns
Unlike bonds, which offer 3-4% returns, tokenized real estate delivers significantly higher profits –up to 15-20% annually.
Income streams
With bonds, you can benefit only from the accrued rate, while tokenized real estate provides two sources of return: rental dividends and property appreciation.
Accessibility
While bonds are accessible, tokenized real estate makes premium property investments available to everyone. You can start with minimal capital and build a diversified real estate portfolio token by token.
Investment goals
Bonds are a safe choice when the economy is unstable. They offer steady, long-term growth when markets are volatile. But real estate is a strong investment in any market, both for short-term and long-term goals. This is especially true for fast-growing cities like Dubai.
Making your decision
While bonds ensure security, they have limited growth potential. Tokenized real estate combines the stability of real estate with the flexibility of digital assets, offering much stronger returns through both rental income and property value growth.
Don't let traditional investment limitations hold you back. With NOVA, you can invest in premium apartments in Dubai and build your real estate portfolio today with whatever amount you're comfortable with – prices for our tokens start from $25.
Download the NOVA app now to enjoy passive income and long-term appreciation potential tomorrow.
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