RealT Rent Payments V2: Increasing Yields with Compound

RealT is passing all rental income through Compound in order to increase yields to property owners!

RealT Pays Rental Income Every 24 Hours to Property Owners

With Ethereum, there’s no need to wait for the 1st of the month in order to receive your rental income. The rules established by the antiquated banking system are not found on Ethereum. It doesn’t take 3–5 days to make a bank transfer, and the elimination of banking fees makes micro-transactions a reality. With these two obstacles removed, RealT is enabled to send the rental income from all of our properties to their respective owners every 24 hours.

…But Tenants Still Pay Rent Monthly

At RealT, a frequent question we receive is “are the tenants paying rent every day?” The answer is no; tenants in RealT properties have a very typical tenant/landlord relationship. The fact that their rental income goes through RealT and is converted to Dai, and sent to hundreds of different owners in over 50 different countries makes no difference to them. Like most tenants, they just write a check by the first of the month.

RealT takes this rental income, converts it to DAI, and simply sends 1/30th of it out every single day.

We do this for a number of reasons:

Daily rental payments are cooler than monthly payments. You receive your first rental payment just 24 hours after purchase!

RealT is an attempt to make property liquid. If you have to wait for the end of the month to collect your income and sell, that is an obstacle to liquidity.

With Ethereum, it costs $.006 per person to send rent. So why not?

Daily rental income stabilizes RealToken secondary market prices. Smooth distribution of rent keeps the secondary market valuations of these tokens stable because no one is trying to move in-and-out of the asset as the day of the rental payment comes and goes.

The Float

So RealT collects a full month’s rent, and then it sends it out to RealToken holders over the next 30 days. This means that over the course of the month, there is a supply of DAI sitting in RealT accounts waiting to be sent. Collectively, all RealT properties are pushing ~16,000 Dai per month to property owners, but this capital is only effectively deployed once it is in the hands of the property owners. The 16,000 DAI does nothing for anyone sitting in RealT wallets, waiting to be distributed. What to do with that DAI?