Overview
RealT is one of the first and most successful tokenized real estate platforms, operational since 2019. Founded by Jean-Marc and Rémy Jacobson, RealT enables investors worldwide to purchase fractional ownership in US rental properties. Each property is held in a dedicated LLC, and ownership shares are represented as ERC-20 tokens (RealTokens). Token holders receive daily rental income distributions in USDC, proportional to their ownership stake.
The model is straightforward: RealT acquires properties, places them in individual LLCs, tokenizes the LLC shares, and sells fractional tokens to investors. Properties are managed by local property management companies, and rental income flows through the LLC to token holders. This creates a genuine yield-bearing real-world asset accessible with investments as low as $50.
RealT has tokenized hundreds of properties, primarily in Detroit and other US cities, and has processed millions in cumulative rental distributions. The platform operates primarily on Gnosis Chain (for low-cost transactions) with Ethereum as a secondary chain.
Technology
RealT's technology stack is pragmatic rather than groundbreaking:
- ERC-20 tokens: Each property has its own token representing LLC ownership shares
- Gnosis Chain primary: Most tokens operate on Gnosis Chain for low transaction fees, enabling cost-effective daily rental distributions
- Whitelisting: Token transfers require address whitelisting, enforcing compliance with securities regulations
- RealT RMM (RealT Money Market): A lending protocol allowing RealToken holders to borrow against their real estate tokens as collateral
- YAM (Yet Another Market): A peer-to-peer marketplace for secondary trading of RealTokens
- Daily distributions: Smart contract-based daily rental income distribution in USDC
The technology is functional and purpose-fit but not technically innovative. The smart contracts are relatively simple ERC-20 implementations with whitelist restrictions. The value is in the legal-technical bridge — connecting on-chain tokens to off-chain real estate assets with proper legal structuring.
RealT RMM is an interesting addition, enabling DeFi composability for real estate tokens. Holders can use their rental properties as collateral for stablecoin loans, unlocking liquidity without selling their real estate positions. This is a genuine DeFi-RWA integration that few other platforms have achieved.
Asset Quality
RealT properties are primarily residential rental homes in Detroit, Michigan, with expansion into other US cities including Chicago, Toledo, and select Florida properties. The asset quality varies:
Strengths:
- Real, physical properties with genuine rental income
- Each property backed by an LLC with proper legal documentation
- Rental yields typically 8-12% annually, attractive for income-seeking investors
- Properties inspected and appraised before tokenization
- Professional property management handles tenant relationships and maintenance
Concerns:
- Heavy concentration in Detroit, a market with below-average property values and higher vacancy/maintenance risks
- Lower-income rental properties carry higher tenant turnover, non-payment risk, and maintenance costs
- Property values in many RealT markets have been volatile
- Some properties have experienced extended vacancies, reducing or eliminating rental distributions
- Property condition and maintenance quality depend on third-party management companies
- No institutional-grade commercial real estate — primarily single-family homes and small multi-family
The asset quality is "real but risky." Investors get genuine exposure to US rental real estate, but the portfolio is concentrated in markets and property types that carry above-average real estate risk. This is not the same asset quality as tokenized Treasuries or institutional commercial real estate.
Compliance
RealT has invested substantially in legal compliance:
- Regulation D exemption: Properties are offered under Reg D 506(c) for US accredited investors and Reg S for non-US investors
- LLC structure: Each property in a separate LLC provides legal clarity on ownership rights
- KYC/AML: All investors must complete identity verification before purchasing tokens
- Whitelisted transfers: Token transfers restricted to verified addresses
- Property documentation: Title, appraisal, inspection, and insurance documents available for each property
- Tax reporting: RealT provides tax documentation for rental income distributions
The legal structure is well-designed for current US securities regulations. Each property LLC isolates risk — if one property has issues, other properties are not affected. Token holders have genuine legal claims on LLC assets.
The primary compliance risk is the evolving regulatory treatment of tokenized real estate securities. While RealT's Reg D/Reg S structure is currently compliant, future regulatory changes could require adaptation. The restricted transfer model also limits secondary market liquidity.
Adoption
RealT has achieved meaningful adoption in the tokenized real estate niche:
- Hundreds of properties tokenized across multiple US markets
- Thousands of token holders across dozens of countries
- Millions in cumulative rental distributions paid
- Active secondary market (YAM) for peer-to-peer token trading
- RealT RMM lending protocol adds DeFi utility
- Consistent property addition with regular new offerings
The daily rental distribution model is a powerful adoption driver — investors see tangible returns hitting their wallets every day, creating a compelling and transparent yield experience.
However, RealT remains niche in the context of both the broader real estate market and the crypto ecosystem. Total platform AUM is modest (tens to low hundreds of millions) compared to the multi-trillion dollar US real estate market. The target audience — crypto-native investors seeking real estate exposure — is relatively narrow. Geographic expansion beyond Detroit-concentrated properties would broaden appeal but introduces operational complexity.
Secondary market liquidity on YAM is functional but thin. Selling RealTokens can take time and may require accepting discounts, particularly for less desirable properties. This illiquidity is inherent to real estate but may surprise crypto investors accustomed to instant trades.
Tokenomics
RealT does not have a native platform token — each property has its own RealToken. This means there is no "RealT token" to analyze from a traditional tokenomics perspective.
Property token economics:
- Price: Set by property valuation plus platform fees at issuance
- Yield: Rental income distributed daily in USDC (typically 8-12% annualized)
- Appreciation/Depreciation: Token value should theoretically track underlying property value, but secondary market pricing may diverge
- Platform fees: RealT charges fees on property acquisition and management
- No staking or governance: RealTokens are pure income/equity instruments
The absence of a platform token means no tokenomics games, no inflationary rewards, and no speculative governance premium — which is refreshingly honest but also means no value capture mechanism for "the RealT ecosystem" as a whole. Each property stands on its own merits.
The tokenomics score is moderate because while individual property tokens function as designed, there is no broader ecosystem value capture, limited secondary liquidity, and platform fees reduce net returns to investors.
Risk Factors
- Real estate market risk: Property values and rental rates can decline, reducing income and token value.
- Geographic concentration: Heavy Detroit exposure concentrates risk in a single, economically challenged market.
- Vacancy risk: Rental properties can experience extended vacancies, eliminating income distributions.
- Property management risk: Third-party managers may underperform, leading to higher costs or lower occupancy.
- Liquidity risk: Secondary market trading is thin; selling positions may take time or require discounts.
- Regulatory risk: Changing securities regulations could impact token transfer restrictions or compliance requirements.
- Platform risk: RealT as a company manages the platform; company failure would complicate property management and distributions.
- Currency risk: Non-US investors face USD exchange rate exposure on property values and rental income.
- Maintenance and capex risk: Older properties in lower-income areas may require significant unexpected maintenance expenditure.
Conclusion
RealT is a genuine pioneer in tokenized real estate with a working product that delivers on its promise: fractional ownership of US rental properties with daily income distributions. The legal structure is sound, the technology is functional, and the user experience of receiving daily USDC rental income is compelling. For crypto investors seeking real-world yield backed by physical assets, RealT offers something unique.
The limitations are primarily related to asset quality and scale. The portfolio is concentrated in lower-income US rental markets with above-average risk, secondary liquidity is thin, and total platform scale remains modest. RealT is not tokenized institutional real estate — it's tokenized single-family rentals in challenging markets, and the risk profile reflects that reality.
The 6.0 overall score reflects a working product with genuine utility, sound compliance, and real adoption — balanced against concentrated real estate risk, modest scale, and limited secondary market liquidity. RealT has demonstrated that tokenized real estate works; the question is whether it can scale to institutional relevance or will remain a niche product for crypto-native real estate enthusiasts.
Sources
- RealT platform: https://realt.co
- RealT documentation and property listings
- RealT RMM (lending protocol) documentation
- YAM secondary marketplace data
- Gnosis Chain transaction data for RealToken distributions
- US Regulation D and Regulation S securities frameworks
- Detroit real estate market data and analysis
- DeFiLlama RealT RMM protocol data
- Community forums and investor discussions