*obligatory not financial advice*
What is Lofty?
In short, Lofty is a platform where you can buy tokenized shares of various real estate properties in the USA.
Normally you would need hundreds of thousands of dollars’ worth of cash or debt to start investing in real estate, which is a problem because it becomes increasingly harder to build up enough capital for that and once you can invest in real estate you cannot diversify or anything instead your capital would be locked into a single building until you could buy the next one. With Lofty you can buy shares of real estate for as little as $50 and you can easier and faster sell your shares on the secondary market than you could sell an entire house.
All of the properties are being rented out and the collected rent is being distributed to all the holders of the tokenized shares. This means your portfolio can grow both from appreciation and also from rental income. You can withdraw your earned rent in USD anytime you want.
Every property has a maintenance fund that is about 5-8% of its value. This funds are used for any repairs and should the reserves in the fund be used a share of the rent will be set aside to rebuild it.
You can buy tokenized shares with credit cards, bank transfers and even cryptocurrencies like ALGO. Because Lofty is a centralized service it requires KYC of their users. Both US and non-US citizens are allowed to invest with Lofty but people from countries that are sanctioned in the US are not allowed to use the platform.
Although the Lofty company itself is obviously centralized, it uses the Algorand blockchain to create tokens for all of their properties. This means that you need to connect an Algorand Wallet to your Lofty account if you want to use it. The advantage of using Algorand is that the holdings of every property are very transparent and can be checked by everyone with a block explorer. This also allows Lofty to offer some governance to their token holders, the company handles the management of the properties but they do let their investors vote on certain decisions.
Lofty could be good way to diversify a portfolio and invest in US real estate to earn rental income. There is also a $25 bonus for new users, which could be half of the first investment to try the platform.
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