Monaco Estate – Business Model
After the short introduction to Monaco Estate last week, we are ready to continue covering the ICO. This week; the business model.
In case you have not read the previous article, follow the link below:
Tokenization of real estate funds significantly lowers the barrier to entry. Many people cannot afford to purchase a second house to rent out and therefore miss out on the opportunity to benefit from real estate investments. Monaco Estate allows people to reap the potential profits of real estate investments by helping people join hands in real estate investing.
So what exactly does Monaco Estate do? To put it simply, they purchase real estate in Monaco with the purpose of renting the properties out. The Monaco Estate team chooses the properties to purchase themselves, but will outsource the management of the properties to be able to invest their time into finding the best real estate investing opportunities. The income generated by renting the properties out goes to the token holders and to a fund that will be used to further increase the total value of real estate holdings. This means that there is compounding and there are dividends that token holders benefit from. To be precise, 60% of the income from the previous month will be paid to token holders every month.
The tokens also have utility, because people can use tokens to pay rent on properties owned by Monaco Estate. This will create an incentive for people to purchase tokens.
A question that we always ask ourselves is: “How does the company behind the token make money?” Sometimes you see that a real estate company like Monaco Estate will take a management fee of sorts for handling the investments/properties, but this is not the case here. The Monaco Estate team members hold 20% of the total token supply, and this is their only way to profit from the operation. The team has aligned their interest with the token holders by making the tokens their only source of income from the company.
Next week we will discuss the market that Monaco Estate is going to be in, stay tuned!