Tokenised Property: Do You Own Part of the Building or Just a Digital Token?

Investing in property through blockchain may lower the amount needed to get started. But investors need to know exactly what they are buying and how they will get their money back. Buying a property is expensive. Even a small apartment can be out of reach for someone who wants to invest but cannot afford the deposit, transfer costs and monthly expenses.

Tokenised property platforms are trying to change that. Instead of one person buying a building, a group of investors put money into it and receive digital tokens linked to the investment. It sounds like a straightforward way to get into property. But there is a detail investors should not overlook: buying a token does not automatically mean your name goes on the property's title deed. The token could represent shares in a company that owns the building, a right to receive rental income or a contractual claim. Each arrangement gives the investor different rights.

Oaksvale puts the structure under the spotlight

Oaksvale is among the African focused platforms working on this model. Its approach is to place each property in a separate company, known as a special purpose vehicle (SPV), and issue digital units linked to that company. Investors are meant to receive a share of rental income and proceeds if the property is sold. The SPV holds the property, while the agreements determine what investors can claim.

So, someone buying units linked to an apartment building is not necessarily buying a portion of the physical building. They are investing through a company structure. That raises practical questions. Who controls the company? Can investors challenge decisions? What happens if the property manager fails to collect rent or maintain the building? These answers should be clear before anyone transfers money.

Getting out is not as simple as selling a share

People often focus on how much it costs to buy into an investment. They pay less attention to how difficult it might be to sell. Oaksvale's published model describes an exit through the sale of the property, with investors voting on the decision and receiving proceeds according to their holdings. An individual marketplace for trading units is planned, but investors should not assume that they can sell their tokens whenever they want.

That could leave someone waiting for a property sale to recover their money. If the building takes longer to sell, or the offer is lower than expected, the investor may have limited options. This is worth considering before investing money that might be needed for other expenses.

How much of the rental income reaches the investor?

Rent collected from tenants is not the same as income available for distribution. The property has to be maintained. There may be insurance, rates, management costs and periods when apartments are empty. The platform may also charge fees for setting up the investment and distributing income. Oaksvale's published information refers to fundraising and distribution fees, but does not provide a confirmed minimum investment or a complete fee breakdown for a specific property offering. Those figures should be available before investors commit.

The platform also uses USDC, a digital currency designed to track the US dollar, for payments. Investors need to account for currency conversion, transaction costs and the practicalities of withdrawing their money.

A digital token does not fix a bad property investment

The building still has to make financial sense. If tenants stop paying, the area becomes less attractive or maintenance costs rise, investors could receive less income than expected. There is also the risk of the company holding the property running into financial trouble. Investors should understand whether their interests are protected if the platform closes or the property-owning company cannot meet its obligations. For African investors, the location of the property matters too. A building in Kenya, Nigeria or South Africa will operate under different property laws and company regulations. The legal documents should make clear which country's courts would deal with a dispute.

What should investors ask before putting money in?

Ask for the property's address, title deed details and the name of the company that owns it. Request the investor agreement and find out whether the tokens represent shares, beneficial ownership or a contractual right to income. The costs also need to be set out in writing. This includes the minimum investment, platform charges, property expenses and any fees involved in withdrawing or selling the investment.

An independent property lawyer should review the documents. Investors should not rely solely on the platform's explanation of how the arrangement works. Tokenised property may give people a way to participate in investments that would otherwise require far more capital. But a low entry price does not tell you whether the deal is sound.