There has been a new emergence of apps allowing for rental property co-ownership on the blockchain. Lofty AI, a Miami-based tech/crypto startup, has the goal of making real estate investing as easy as pulling up your stock portfolio and buying shares. “Diversification is the key to any investment strategy, but the barrier to entry for real estate has always been so high. We don’t believe that should be the case,” states CEO and Founder Jerry Chu.
With Lofty AI, you can invest in real estate by buying their tokens in different properties. For example, shares of the rental property at 917 Pawnee Ave today were $54.29, whereas shares of Debby Dr are $52.97, and you have the choice of which rentals you would like to invest in. There have been similar places to buy fractional ownership of real estate, like Fundrise and Rooftop, however the buy-in minimum is $1,000 plus, and there are restrictions on cashing out. With Lofty AI, you can invest with as little as $50 and sell at any time. Fractional ownership has been on the come up in not just real estate, but other assets like fine art and high-end automobiles.
So far, lofty features 90 rental properties, most of which are in rust-belt states like Illinois, Michigan, Missouri and Ohio, all with property management companies handling the day-to-day. Just like owning your own rental, when something breaks or the tenant needs help, it is up to the owners to decide to pay for upkeep. So, there are regular votes between all of the owners over issues in their properties. All buying and selling of the property tokens are recorded on the blockchain, something Chu believes is fit to replace old-fashioned record keeping of real estate because the transactions are completely transparent. “The buyer and seller do not trust each other sometimes, the reason for escrow and the whole settlement process. For us, settlement takes four seconds,” states Chu. We look forward to seeing the progress of Lofty AI in their quest of making real estate investment easy for the average investor!