Real estate investing can be a lucrative way to build wealth, but the steep cost of entry prevents many potential investors from getting started. That’s where fractional real estate investing can help. It allows investors to purchase a fraction of a property and collect rent payments on their share.
Lofty AI is one platform that has made this process even easier by tokenizing fractional real estate investments using blockchain technology. But is Lofty AI legit? How does it work, and what are the potential returns and risks?
In this comprehensive Lofty AI review, we’ll dive into all of these questions and more to help you decide if it’s the right investment option for you.
What Is Lofty
Lofty is a tokenized real estate platform that enables investors to purchase fractionalized shares of rental properties. Using the Algorand blockchain, Lofty aims to simplify real estate investing and make it as easy as investing in stocks or crypto.
Lofty creates NFTs of the property’s LLC, allowing multiple owners to own a share of the property simultaneously. The platform sources properties, renovates them, and then lists them on the marketplace for buyers to choose from.
The properties are managed by property managers, meaning investors don’t have to manage the properties themselves. Investors can be located anywhere in the world and receive rental income payments from the first day through Lofty’s platform. Lofty charges a listing fee, which is their main source of revenue.
How Does Lofty Work?
To get started, investors can browse the Lofty website to view available properties and evaluate key rental investment metrics such as Cash on Cash Return and Internal Rate of Return.
When an investor finds a property they want to invest in, they simply click the “Invest” button and Lofty generates a unique wallet to store their tokens. The tokens are then used to represent the investor’s share of the property, and they can collect rent payments and sell the tokens on Lofty’s secondhand market.
The platform also provides all necessary information such as documentation, inspection reports, and historical rent payments to help investors make informed decisions. The Lofty Rentals platform interface is designed to be simple and user friendly, making it accessible even to those with little experience with cryptocurrency or financial platforms.
Lofty’s pricing structure is simple and straightforward: it makes money through fees. There are three main types of fees charged by Lofty:
Token purchase fees for buying Lofty tokens, which range from a $0.01 network transaction fee to 2.9% of the transaction value plus $0.30 per transaction for credit or debit card purchases, and 3.9% of the transaction value plus $0.30 per transaction for international card purchases.
Selling fees, which are charged when you sell your Lofty tokens. You can sell back to Lofty for a 5% fee of the original purchase amount, or sell on Lofty’s upcoming secondary market (starting September 2022) for a 0.5% fee of the sale price.
Listing fees, which are only applicable if you want to list your own property on Lofty’s marketplace. The closing fee for listing your property on Lofty.ai is 3%.
Lofty’s fee structure is designed to be transparent and simple, with no hidden fees or charges.
Lofty AI Review: Pros & Cons
- Simplifies the real estate investment process
- Offers daily income stream through micro-rent payments
- Strong track record
- Credit cards accepted
- Limited number of properties compared to competitors
- May not appeal to the crypto-averse
- No mobile app
- Lofty tokens only have value on Lofty’s secondary market
- Uncertain regulation around tokenized fractional real estate investing
If you are scared of investing with Lofty because of the crypto token aspect, but still would like to diversify in real estate, there are other great options out there. One company that deserves consideration is CrowdStreet. They do extensive research for you and have free registration on their intuitive website. To learn more about them, read this full CrowdStreet Review.
Is Lofty Right For Me?
If you’re interested in investing in real estate but don’t want to take on the hassle of being a landlord or putting down a large sum of money for a down payment, Lofty may be the right platform for you. Its user friendly interface and simple investment process make it an attractive option for investors, especially those who are already familiar with crypto and blockchain technology.
It’s important to consider the drawbacks of Lofty as well, such as its limited selection of properties and the uncertain regulatory landscape surrounding tokenized fractional real estate investing. So, before making any investment decisions, be sure to do your research and evaluate whether Lofty aligns with your investment goals and risk tolerance.
To learn more and see if Lofty is the right fit for you, click here to visit their website and explore their offerings.