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Traditional Real Estate Investing vs. MetaWealth

Daniel Boltinsky

July 7, 2023

You already know that the real estate market is probably the best way to build wealth and grow your income. It’s by far the most rewarding, stable and least risky investment compared to all others available.

This is why here at MetaWealth we are taking this success avenue and opening it up for everyone, because we think anyone should be able to invest in real estate. Through tokenized real estate, the real assets we choose become fractionalized and instantly available to investors.

But how does MetaWealth and our tokenized real estate investing compare to traditional real estate investing? 

Traditional Real Estate Yields vs. MetaWealth Tokenized Real Estate Yields

First thing’s first: how much can you earn with MetaWealth and how can you tell whether this is a good amount or not?

The latest data on the average rental ROIs of real estate properties in Europe show that MetaWealth is consistently providing higher returns that the country average of all of our assets. 

As you can see from the data, every MetaWealth real estate asset available for investing on our platform offers at least as much ROI to our investors compared to the average rental ROI for the country where each asset is located.

For example, for our first two real estate assets which are located in Romania, the net yield per year is 6.1%, whereas the country average gross yield is 6.1%, which would convert into a percentage closer to 5.4% net earnings. 

This puts the earnings you can get from MetaWealth far higher than what you would earn by buying an apartment and renting it out yourself. Not to mention that we’re also saving you the hassle, friction and paperwork that come with it!

Traditional Real Estate Investing Process vs. MetaWealth Process

Now let’s take a look at how MetaWealth compares to traditional real estate investing from a process perspective. 

Traditional real estate investing is an excellent way for the rich to get richer. However, the promises far outshine reality for most.

It takes months to close a property you'll be stuck with for years, leveraging years of savings on a single asset you hope appreciates and hosts good tenants. This is entirely antithetical to the core tenet of good investing—there's no diversification.  

Here’s how a traditional real estate deal usually looks like, after you’ve found a house or unit you like. 

  1. Finding a lawyer and real estate agent: One to 2 months
  2. Pre-approval and rate shopping: One to 2 months
  3. Negotiations: Up to 1 month
  4. Closing Fees: One month spent & thousands of dollars*
  • Survey: $1,000 - $2000
  • Home Inspection: $250 - $700
  • Property Appraisal: $300 - $600
  • Title Transfer & Insurance: $500 - $1,200
  • Government Registrations (Mortgage, Title, etc.): $150
  • Land Transfer Tax: 0.5 - 2.5%
  • Lawyer Fees: $1,000 - $3,000
  1. On-going Fees:
  • Property taxes - between 1-1.5% depending on location
  • Management costs - friction with renters, property repairs, etc. - between 3-5% per year;

*Costs vary significantly by location and the fees here reflect closing fees in large Canadian & U.S. cities. 

And with MetaWealth: 

  1. KYC Verification: Instant
  2. Transfer or purchase USDC: Can vary between instant to 3 business days depending on payment method chosen
  3. Place Order: Immediate
  4. Fees:
  • Transaction Fee: 1.9%
  • Asset management fee: 0.6%
  • Rental income fee: 5% of the total rent earned

All other fees including property tax are handled by MetaWealth on your behalf, leading to the bigger rental earnings explained above. 

Because of the time and money required, it’s simply impossible to do this at scale for 90% of people. Other problems with traditional real estate investment include:

  • The economy can weaken, causing your property to fall below purchase price for years.
  • Interest rates rise, meaning you stop saving home equity and pay most of your income to the bank.
  • Tenants might stop paying rent, leading to a lengthy eviction process and severe economic hardship, especially in tenant-friendly jurisdictions. 
  • Bills add up sporadically and unexpectedly, especially if you did not expertly vet a property and its developers beforehand. 
  • You're priced out of good deals. Unlike stocks, in which you can pick whichever asset you feel most confident about, your RE choices are limited by your pre-approval amount. 

While deep-pocketed real estate investors face these issues to some degree, they don't keep them up at night. By leveraging the economy of scale, high net-worth individuals and funds mitigate the above problems in the following ways:

Note: These are all benefits afforded to investors on the MetaWealth platform.

  • Discounted rate on assets: Buying a large amount of property gives you discounts below the assessed value, making you not entirely subject to recessions in the housing market. 
  • Vetted assets in high-growth markets: An experienced real estate team vets the best assets, allowing the investor to expand beyond their local market. 
  • A diversified real estate portfolio: Being able to afford multiple assets and the legal team to close deals quickly allows real estate pros to own dozens of properties—the failure of one asset is rarely catastrophic.
  • Property management: Investors don't need to deal with tenants and maintenance themselves, while this often turns into a full-time job for small landlords. 
  • A simple closing process: When you have an established relationship with lawyers and agents, and experience with real estate deals, closing is efficient. 

By making all of these benefits available to anybody, MetaWealth allows you to diversify your portfolio and focus on growing your wealth. 

A glimpse of how the MetaWealth rental income comes in once a month in the app.

Instead of an expensive, multi-month process which ties you up with a single asset, you can start investing in minutes with as little as $100 thanks to the power of tokenization

Users are tapping into the same advantages afforded to high net-worth real estate investors and are already seeing rental income in their accounts. 

How about REITs? How Does MetaWealth Compare to REITs?

We published a deep dive into Real Estate Investment Trusts here and yes, the facts still show that MetaWealth is by far the better option to invest in the dynamic real estate market with maximum benefits and minimal risks.

So, what are you waiting for? Get the app and take your first step towards a brighter investing future!

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