Choosing Between Ready-Made and Custom Real Estate Tokenization Platform Development

So, you’re looking to tokenize your real estate assets to increase liquidity and enable digital ownership. 

You’ve identified your target audience, and now all you need is to develop a platform for your tokenized real estate assets

But right from the get-go, you’ve been confused about the perfect solution to develop your platform. 

Continue reading if that describes you! 

All the information you want is contained in this article.

If you want to venture into real estate tokenization, you must decide between investing in a custom-built solution that fits your specific demands and using a ready-made white label platform.

Each of these platforms has advantages and disadvantages. White label platforms are typically more affordable dependable, and facilitate quick deployment. However, specially designed platforms are more tailored and flexible. Yet, the cost of centralized exchange development may discourage many businesses from considering this option.

In this article, we will discuss the intricacies of both options. We will highlight their respective advantages and drawbacks while providing practical insights to help you make informed decisions. 

Let’s find the right fit for you! 

What is a Ready-Made (White label) Real Estate Tokenization Platform?

As the name suggests, a white label tokenization platform is an already-built platform that you can rebrand and use as your own. Although such a platform is pre-built, it remains flexible and customizable, so you can tweak its features and branding to match your organization. 

White label tokenization platforms come equipped with all the features a company needs for offering tokenized real estate

Some of these vital features include the following: 

• Digital asset Management: This comprises software programs that an organization uses to store, organize, manage, and distribute digital files and assets among investors. 
  
  
• Investor Dashboards: Digital tools such as mobile or web applications through which individual investors track and manage their real estate tokens. 
  
  
• Compliance Tools: Software solutions that the tokenization platform uses for auditing investor activities, streamlining risks, and maintaining control in accordance with the requisite regulatory and legal statutes. 
  
  
• Payment Processing Systems: These are services that facilitate electronic transactions, such as when investors purchase tokenized real estate units. 

Related Article: Real Estate Tokenization Platform Cost

Key Features Of White Label Real Estate Tokenization Platforms 

A white label real estate tokenization platform is distinguishable by the following notable features: 

1. Tokenization Capabilities

The first and foremost important thing a tokenization platform must do is create tokens. Tokenization capabilities allow you to convert physical assets into digital tokens representing smaller units of ownership of the real world asset. 

Smart contracts are a vital component of a white label platform’s tokenization abilities. 

They ensure secure transactions and automate management by stipulating immutable rules guiding the process of assigning tokens to investors after fulfilling set conditions. 

2. Investment Management Tools

White label platforms typically come with built-in portfolio management tools. These tools allow investors to manage their investments, track performance, and access real-time data. Additionally, investors can access insights into investment status, distributions, and market trends through comprehensive dashboards. 

3. Regulatory Compliance 

White label platforms come with built-in Know Your Customer (KYC) and Anti-Money Laundering (AML) checks to ensure that you comply with regulations. Additionally, they also have built-in tools for generating reports that meet regulatory requirements and assist with compliance audits. 

4. Marketplace Functionality 

As a standard, white label platforms can list your tokenized real estate properties for sale or investment. They also facilitate detailed descriptions and accurate financial projections. Furthermore, they come with options for investors to trade tokens on a secondary market, which makes it easier to sell these tokens.

5. Payment Processing

A good white label platform should allow investors to purchase tokens using various cryptocurrencies and fiat currencies and ensure secure payment processing. 

6. Security Features

A white label platform should include data encryption and secure storage of sensitive information as a basic feature. It should also include multi-factor authentication to ensure secure access for users. 

Related Read: Launching a Real Estate Tokenization Platform

Advantages Of a White Label Real Estate Tokenization Platform

White label platforms come with several benefits, including:

1. Speed of Deployment

With white label real estate tokenization platforms, you can get to market quickly. This way, you can capitalize on immediate opportunities without the lengthy development process associated with custom solutions.

2. Lower Costs 

White label platforms are much cheaper than custom-built platforms. This is because they share a standardized framework with other white label platforms. As a result, there is no need to incur exorbitant development and operational costs. 

These private-label solutions often include essential features at a fraction of the cost of developing a custom solution. Therefore, they are a great fit for small real estate blockchain companies with limited budgets. 

3. Established Infrastructure: 

As highlighted above, white label real estate tokenization platforms often share an existing infrastructure with other established platforms. Therefore, they have been tested and are proven to be functional. This makes some organizations, especially those new to real estate tokenization, consider them more reliable and secure than custom solutions. 

Who Needs a White Label Real Estate Tokenization Platform?

White label tokenization platforms are cheaper, highly customizable, and guarantee a quick market entry. Consequently, their target audience usually comprises organizations looking to reduce operation and development costs. 

Some of these organizations include the following: 

• Small and Medium-Sized Businesses
• Startups aiming for a quick launch
• Private individual enterprises venturing into real estate tokenization for the first time. 

The category of entities listed above often have a tight budget, making them a better fit for white label solutions

Related Article: How Real Estate Tokenization Works

What is Custom Real Estate Tokenization Platform Development? 

Custom real estate tokenization platform development refers to the comprehensive process of building a well-tailored platform that matches a business or organization’s unique needs, requirements, and infrastructure. 

It contrasts sharply with a white label real estate tokenization platform in that companies build such platforms from the ground up according to their goals and plans. This allows them to customize features and functionalities to meet their specific operational requirements and provide more wholesome user experiences. 

Key Features of a Custom Real Estate Tokenization Platform

A bespoke real estate tokenization platform built from the ground up is expected to have the following attributes: 

1. Advanced Tokenization Features 

Customized platforms take tokenization a step further. 

With these platforms, you can create and manage different token types for various investment structures. Additionally, these platforms allow you to develop bespoke smart contracts that meet all the necessary legal and operational requirements for your business.

2. Robust Investment Management Tools

These custom platforms are often built from the ground up, which means they are targeted at very high-net-worth individuals and institutions. These investors commit to high-volume tokenized real estate investments and require advanced portfolio management tools. 

Therefore, custom real estate tokenization platforms customize their token management and analytics tools to reflect the unique requirements of their investors. Furthermore, they also tailor reporting features to maximize user experience and satisfaction. 

3. Flexible Integration Options:

In addition to the robust investment tools discussed above, these high-net-worth individuals sometimes require other third-party tools for comprehensive analysis before making investment decisions. 

That’s why most custom platforms facilitate multiple integrations with the most relevant external services to improve functionality. They may also optimize for Blockchain interoperability, which allows interaction with multiple Blockchain networks and more options for tokenization. 

Advantages of Custom-Built Real Estate Tokenization Platforms

Incorporating the advanced features discussed above attracts some benefits. Some of them include: 

1. Scalability

In response to the growing user demands, custom platforms are often equipped with the right infrastructure to scale operations. This simply means that you can easily add new features and increase functionality as your business expands. 

2. Customized User Experience

During the planning phase of building a custom real estate tokenization platform, all the possible needs of the target users are already considered. As a result, the platform has all the right features necessary to deliver a unique and branded experience for each user, helping it meet the specific needs of each customer. 

3. Flexibility in Compliance

Custom solutions make it easy for businesses to embed compliance measures that are specific to their industry. 

Who Needs a Custom Real Estate Tokenization Platform?

The custom audience of custom-built tokenization platforms is usually large enterprises with unique requirements and a large budget. These real estate blockchain companies usually seek full control over their platforms and are ready to meet the financial requirements that make this possible. 

Key Differences Between Ready-made and Custom Solutions 

Here are some of the most important differences between white label and custom tokenization solutions 

1. Development Time

White label platforms offer ready-made solutions, guaranteeing quicker deployment. Custom platforms, on the other hand, can take several months as they are built to precise specifications and often require multiple tests to guarantee reliability.

2. Cost Implications

White label platforms are cheaper to set up. They are a perfect fit for small businesses with lean purses. 

In contrast, custom solutions require higher upfront costs. However, this considerable financial investment is justified by the long-term value it provides through tailored features, increased functionality, and scalability. 

3. Customization and Flexibility

With custom solutions, your business can adapt the platform to meet needs as they arise. White label platforms, on the other hand, can limit your business in the long run since they offer fewer customization options. 

4. Scalability

Custom platforms are built to scale as your business grows. This way, you can add new features and increase functionalities as necessary. 

In contrast to this, white label platforms are limited by the vendor’s infrastructure and capabilities. 

Use Cases For White Label Real Estate Tokenization Platforms

If you own a small to mid-sized business with a limited budget and you’re looking to enter the market immediately, then white label platforms are perfect for you. These platforms offer plug-and-play solutions with core features like tokenization, compliance tools, and payment gateways. 

White label platforms are also a good fit for you if you want to test the tokenization waters without investing a considerable amount of time or money upfront. With white label platforms, you can explore tokenization while staying focused on your core business. 

Example of a real estate business using white label platforms for tokenization

RealIT, a US-based company, uses a white label platform to tokenize real estate. This company allows its customers to buy fractions of rental properties. It automates layouts in cryptocurrency and capitalizes on the white label model’s speed and infrastructure without paying an arm and a leg to develop a custom platform. 

Use Cases For Custom Real Estate Tokenization Platforms 

If you are sure that tokenizing real estate assets is right for your business and you can afford to invest in a custom platform, then you should go ahead and develop one. These platforms offer a lot of flexibility, advanced features, high scalability, and full control over platform functionalities, making them ideal for large enterprises with big budgets.

Businesses that operate in areas with particular regulatory requirements might also benefit from custom platforms. Businesses that intend to operate internationally or introduce sophisticated tokenized financial products in the future will also benefit from a custom-built platform’s flexibility, which makes it simpler to scale and adjust as laws or consumer needs change.

Example Of a Real Estate Business Using Custom Platforms For Tokenization

Red Swan, a tokenization platform for commercial real estate, created a unique platform to handle substantial real estate investments. This made possible their ability to manage many token types, develop customized procedures, and provide institutional investors with a smooth user experience. 

What to Consider When Making a Decision

Deciding on which platform type to use isn’t hard if you have a clear understanding of your current needs and your capacity. 

Here are the three major considerations when choosing a tokenization platform. 

1. Budget

This is the most important of the three considerations. It doesn’t matter what your business needs are or what the set timeline is for launching your tokens. If you don’t have the requisite financial investment, you can’t set up a platform. 

Even if you have the money to set up a customized platform, it isn’t always wise to do so. As long as a white label meets your needs, then you should stick to it and save costs. However, if you are thinking more long-term, a custom solution may be worth the shot because it offers improved functionality and higher cost savings in the long run.

2. Timeline

Are you looking to launch immediately, or can you wait for a tailored solution? 

If you must enter the market quickly, white label is the best option, but if you can afford to wait, you should consider developing a custom solution.

3. Business Needs

The features you aim to provide for your users heavily influence your business needs. These can range from support for multiple asset types and staking features to complex smart contract capabilities, cold storage functions, and more.

If your requirements are unique, you should go for a custom solution that can meet your needs. If, however, a standard solution can fulfill your needs, you should strike while the iron is hot and enter the market. 

4. Growth Plans

While you may start small, your business can grow quickly. If you plan to expand rapidly, you may need to use custom solutions, which are more scalable than white label platforms.

Why Choose Us for Your Real Estate Tokenization Needs 

At Debut Infotech, we are concerned about meeting your needs. As such, we prioritize a customer-centric approach that involves listening to your needs and tailoring our solutions to address them. Combined with our deep expertise in Blockchain technology, we are best suited to help you navigate the complexities of real estate tokenization. 

Whether you need a ready-made white label platform or a custom-built solution, our team of dedicated engineers will be with you all the way to ensure that the final product aligns with your strategic goal.

Conclusion 

Real estate tokenization is not just an investment fad. It is the next big thing in property investment. However, not all companies that invest in it will be profitable. For most, the difference between success and failure will depend on which platform type they use for tokenization. 

While both platform types offer unique benefits, the platform you choose should meet your needs, align with your timeline, and fall within your budget. Small companies will benefit from ready-made platforms because they are cheaper and offer faster market entry. On the other hand, larger companies will appreciate custom-built solutions because they are more flexible and offer improved scalability. 

Frequently Asked Questions