If you’re wondering whether you’re better off investing in Bitcoin or residential real estate, it depends on your tolerance for risk.
Investors who are comfortable with risk can do both, by taking merging their Bitcoin investment with their residential real estate interests, purchasing property with cryptocurrency.
That’s precisely what could happen with a South Florida waterfront mansion, listed for $59 million, as it’s now accepting Bitcoin as a payment option.
The 16,000-square-foot new construction mansion, located at 37 Indian Creek Island Road, is in Indian Creek, a 300-acre island which has less than 40 homes and is secured by its own police force.
The neighborhood is home to many high-profile people, such as Tom Brady and Gisele Bündchen, Ivanka and Jared Trump, and Enrique Iglesias.
The home is being developed by Todd Michael Glaser of Miami and will feature 12 beds and 13 baths on top of a 53,696-square-foot lot. Amenities include 12-foot ceilings, a club room, chef and prep kitchens, a media room, gym, a large deck, sleep pool and tanning beds.
Using Bitcoin to buy residential homes is a growing trend, according to Dina Goldentayer, the listing agent with Douglas Elliman.
“As more methods of crypto conversion become popularized and sellers become more comfortable with the process, it’s bound to be more streamlined,” said Goldentayer.
Bitcoin’s Future in Real Estate
For those interested in putting their Bitcoin into real estate, research is key.
“There is definitely a learning curve if you haven’t transacted a deal with cryptocurrency before, so make sure you are educated about the process and partner with someone who understands it, and you trust,” said Goldentayer.
Ataix, a crypto exchange and cryptocurrency trading platform, analyzed two years of data on price index changes of Bitcoin and residential real estate in major markets, and found that although the price of Bitcoin is volatile, it has increased by 19%. And while residential prices are more stable, they only increased 10% over the same two-year period.
Learning how to manage risk is the best way to avoid a loss when the market dips, according to Ataix CEO Arman Aleksanian.
“If you had invested $100 in Bitcoin in the first quarter of 2021, you would have made $119 by the end of the year. As for real estate investment, your earnings would be comparable with BTC [Bitcoin] if you had invested $100 in the real estate market in the same period you would have made about $110,” said Aleksanian.
The way the mansion’s developer, Glaser, sees it, cryptocurrency shouldn’t be excluded from real estate transactions, as it brings big benefits.
“If Gucci accepts Bitcoin, then Todd Michael Glaser will too,” said Glaser. “We can convert it to cash immediately. If there’s a cost it’s just part of doing business.”
Over the last few years, the intersection between cryptocurrency and real estate in South Florida has strengthened, and Glaser expects that to last.
“As long as Bitcoin makes it through the next 60 days, I think it’s going to be very widely used to purchase and sell South Florida real estate,” said Glaser.
The mansion is expected to be move-in ready within 18 months.