Are you in the market looking for a property to invest in that will give rental returns? Or, are you planning to sell your property? But, then again, going to various locations, talking to realtors, finding the right property or the right seller, and then completing all the documentation and payment can easily take months. Why waste all that time and energy if you can invest or sell in US-based properties and also be part of the crypto market at the time using Lofty AI? In this article, we bring to you a detailed Lofty AI review. We will learn how does Lofty AI work, how much is Lofty rentals and more!
Lofty AI Review
This new-age crypto-based real estate marketplace is making selling and buying pretty easy and hassle-free. Many people want to invest in real estate but are afraid of the bureaucracy it involves. But with Lofty AI and Lofty rentals investing in real estate has never been easier. Let us learn more about this amazing platform.
What is Lofty AI?
Lofty is a crowdfunding marketplace where you sell or buy properties. But, the catch is that you are not going to buy the entire property; instead, you will be investing in only a share of the property based in the US. They create NFTs of the property’s LLC which can be owned by multiple owners at the same time. YCombinator, a reputable business incubator, is where Lofty first started as an AI as a Service company to assist investors in locating emerging districts around the US.
Lofty will source the properties; they will renovate them and then put them up on their marketplace for the buyers to choose from. Also, the best thing is that buyers will not have to manage the property themselves. Lofty has property managers who take care of the property. You can be anywhere in the world, be part owner of the property and get rental returns from the very first day. Through Lofty’s platform, investors are eligible for daily rental income payments. A listing charge is how Lofty makes money.
What Is Tokenization?
The process of producing fractional representing units of an asset is known as tokenization. In the context of Lofty, the estimated worth of each property is divided into tokens, worth $50 each. This means if Lofty rentals is worth $20,000, then there will be 4000 tokens of the property worth $50 each.
Lofty uses this concept since it provides investment opportunities for a sizable market both domestically and abroad for those who lack the financial resources or are hampered by a variety of restrictions to participate directly in real estate.
What is Algorand?
Algorand is founded in 2019, by a well-established computer scientist and professor of MIT, Silvio Micali. He is a Turing awardee for his work to make cryptography a well-designed and streamlined field of science. In 2017, he along with Jing Chen, a fellow professor from Stony Brook University, presented the Algorand white paper backed by the Singapore-based foundation called Algorand foundation.
Algorand is pretty new as compared to some of its direct competition in the market. It is a cryptocurrency that is designed to make transactions speed faster and more efficiently. Their main objective is to reduce the time taken to complete a transaction from the very start to the final step of adding it to the blockchain. This cryptocurrency is all but different from the usual cryptocurrencies in the way it has deviated from the traditional methods of design and functionality. This entire idea is based on proof of stake blockchain.
The most significant feature is that everyone who has a certain quantity of the ALGO cryptocurrency in their wallets gets some of it when a new block is added to the blockchain. Additionally, Algorand gives users the option to generate tokens that can stand in for both new and old assets as well as smart contracts.
All this has made this cryptocurrency quite a popular choice among venture capitalists to invest in. early investments and VC intervention has led to the early sale of ALGO and the fast development of the platform. The sudden growth is based on the fact that many crypto investors and enthusiasts think that proof of stake is the real future of cryptocurrency. In this Lofty AI review, let us now inform you about Algorand working process.
What does Algorand do?
The main work of this cryptocurrency is on the pure proof of stake principle. This consensus mechanism helps in speeding up the transactions without creating any issues with the decentralization of the network. In proof of work, only large mining pools get the chance to add blocks and in proof of stake, stakes with large stakes win the race. To solve this issue, Algorand has based its network on pure proof of stake mechanism. In this, the stakers are chosen randomly regardless of their stakes. This allows a better chance for the participants.
Users become participation nodes after staking which then generates their participation key. Algorand relay nodes serve as the route for communication between these nodes. The identity of the chosen block proposers is hidden till a new block is offered. Participation nodes are chosen at random for joining the soft vote panel after a block has been submitted.
This entire idea is to ensure that one single user can add at one time to the blockchain. A new committee is established to examine the integrity of the blocks of transactions and to look for double-spending. Then the block is added if the committee accepts the work. If not, a new block is chosen, the current block is rejected, and the blockchain goes into recovery mode.
Token of Algorand
ALGO is the token of the Algorand blockchain. Algorand foundation has mentioned that this cryptocurrency will only have 10 billion tokens in total. A blockchain explorer is used by the protocol to calculate the total number of tokens that are in circulation at a certain point in time. They have a clear distribution plan for ALGO which includes initial injection, participation rewards, node runner’s distribution, end-user grants, etc.
Uses of Algorand
Algorand is currently being used by multiple businesses to develop various applications. The ease of usage, minimal fees, and the chances of getting chosen as a blockchain validator make it an attractive choice for many. Currently, Algorand is being expanded on by hundreds of companies, including financial services, fintech, startups, and real estate like Lofty AI, and DeFi. The active community is fostering the development of a strong ecosystem of businesses that share Algorand’s longer-term objectives for the future of financing. Lofty is one such use case of the Algorand blockchain.
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How Does Lofty AI Work?
Now, that you are well aware of what Algorand is and why it is a highly demanded and coveted cryptocurrency for the finance world, let’s focus back on Lofty Rentals and how does Lofty AI work.
You may think that using Lofty Rentals is something that is complicated and requires experience with cryptocurrency and financial platforms. Well, that is not the case here. The interface of the platform is super simple and clean. You can easily navigate the platform from the very start without much hassle involved.
Signing Up & Submitting KYC Details
Signing up for the Lofty platform is pretty straightforward and foolproof.
1. Go to the official website and click on the Sign Up option.
2. Now fill in your email ID and set up a password. This will set up your account.
3. However, you will have to provide your KYC details like name, phone number, ID proof, etc. The know-your-customer process helps reduce the chances of fraud and scams.
4. Along with KYC, you can also add your MyAlgo or Algorand wallet address so that you can get your rental returns easily from the very first day.
Investing Using Lofty AI
Using Lofty is quite simple due to its user-friendly interface and easy-to-navigate features. You can easily find the best deal, make payments and receive tokens without much hassle involved. You will find the properties listed on the main page as mentioned in this Lofty AI review. All the details like the address, property type, cash dividend, IRR, etc. are mentioned in detail on the page. This will allow easy decision-making for real estate investors. You can find pictures and inspection reports on the marketplace page of the site as well.
Making Payment and Collecting Rent
After this, choose Lofty rentals you want to invest in. You will have to make sure that your Algorand wallet is already verified and submitted and linked to your Lofty AI account. You can make payments using your credit card or your bank account directly.
- If you use a bank account then the rental returns in form of tokens will be accessible only after a few days,
- whereas with a credit card, it will be accessible immediately.
You can withdraw the rent as ALGO. Other than this, there are other options like STBL and USDCa. In the beginning, you will get $50 as a token as the first rental payment.
Every month, Lofty rentals use the House Canary automated valuation model which is a basic price valuation system to calculate the rent. The model calculates the token appreciation based on the market price of the property. The rental tokens can be cashed out at any time, as there is no lock period. There are no fees for withdrawing the rent.
For US investors, all income and capital gains are taxable. The protocol omits these taxes at origin and provides the investor with the relevant paperwork that is submitted to the IRS. Similarly, taxes apply to non-US investors as well, though these taxes may be waived depending on the status of tax treaties between the home nation of the investor and the US. But, the investor’s native nation would continue to tax any money earned there.
Is Lofty AI Safe and Legit?
Now the question that is coming to your mind after reading Lofty AI review, is whether this investment platform is safe or not. It is common to worry among investors, as they are always speculative about the safety and legitimacy of an investment. In general, no investment is ever going to be completely safe or risk-free. There is always a certain amount of risk involved.
Lofty too has some market risks involved. The risks stem from the general market comprising the US economy and real estate market. A lot of common issues that affect the real estate market tend to affect the price and returns on the investment. One of the major factors is the location of the property. Areas with high crime rates will have cheaper properties and will have lesser value increments in coming years as well. Also, there is always a certain risk involved when it comes to physical properties like natural disasters, man-made hazards, etc. This eventually leads to damage control and repairs. Most of these issues are solved by Lofty itself by using third-party inspectors and insurance.
In case of any legal issues faced by Lofty, property owners’ status will not get affected. The investors own only a part of the LLC, therefore, being immune to any directly legal risk concerning the company itself.
Another common question asked is whether the price of Algorand will affect the token value. Well, no! Lofty is based on the Algorand blockchain to make the properties tokenized, but the price of the cryptocurrency has no direct link to the ALGO value.
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Benefits of Lofty AI
A few things that can be counted as pros of this platform as per this Lofty AI review are:
- There are tax benefits for the owners.
- There are no legal issues to handle while buying the property as you will own only a few tokens of the property.
- You will have passive participation, as they handle everything from sourcing to distributing rental dividends.
- They use ALGO as the crypto base, which is currently a highly competitive and safe blockchain to rely on.
Note: Blockchain technology ensures that ownership and governance are decentralized. There is a super-majority clause (60%) mandating that the token holders vote on all significant decisions, and no one investor is permitted to own more than 10 to 15 percent of any given property. The platform and the property manager are therefore constrained by these choices.
Are you eager to explore the world of Algorand and also dip your toes in real estate investment? Then Lofty AI is the answer to all your worries and questions. It is an easy place for those who want to find a suitable property to invest in for rental returns. This platform allows easy access to rental properties that are managed by the company, while you can be part owner in form of tokens.
We hope this Lofty AI review has made you more sure about US real estate investment via crypto. You now know how does Lofty AI work and important details about Lofty rentals but make sure you are fully aware of the risks involved before investing in this new platform.