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  • Welcome to Lofty's FAQ 👋
  • FAQ
    • What is Lofty?
    • How does the Lofty Marketplace work?
    • Which payment methods can tokens be purchased with?
    • Can non-US citizens participate?
    • Can I sell my tokens anytime?
    • How does Lofty make money?
    • How do taxes work?
    • How does governance work?
    • How are repairs handled?
    • How often do I receive rental income?
    • How do I withdraw my rental income?
    • Do I benefit from depreciation?
    • Will I lose my tokens if Lofty AI goes out of business?
    • As an owner am I liable if any lawsuits / accidents occur at the property?
    • Who manages the properties?
    • What is your Property Manager's process and tenant selection criteria?
    • Are Lofty properties purchased using debt?
    • Who owns the properties that are being listed on your platform?
    • How long after I pay will I receive tokens in my Algorand wallet?
    • Does the price of Algorand affect the price of Lofty tokens?
    • What is an Algorand wallet’? Why do I need one?
    • Which blockchain is Lofty AI using to tokenize properties?
    • How many tokens can I purchase in each property?
    • Can I do a 1031 Exchange with Lofty properties?
    • Who legally has ownership of these properties?
    • How is token appreciation determined over time?
    • How do we ensure each LLC owns the deed on its property?
    • Do I have to submit my ID before I can participate?
    • Why do I need to fill in personal information, and is it encrypted?
    • Why is my ID verification taking so long?
    • How can I track the performance of my property?
    • How long are properties held before they're sold?
    • Do you have 2 Factor Authentication (2FA) available?
    • What happens if a property doesn't sell fully by the deadline on the website?
  • Glossary
    • IRR
    • Cash on Cash return (CoC)
    • Cap rate
    • Appreciation
    • Net Operating Income (NOI)
    • Diversification
    • Operating Expenses
    • CapEx
    • Single-Family
    • Duplex
    • Triplex
    • Quadplex/Fourplex
    • Capital Gains Tax
    • Closing costs
    • MLS
    • HVAC
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  1. FAQ

How is token appreciation determined over time?

Tokens update in value on a monthly basis starting 1 month after the property sale is recorded on the MLS. The amount a token appreciates or depreciates is determined by using the HouseCanary Automated Valuation Model (AVM). HouseCanary is the largest property valuation company and is used by the majority of single family hedge funds like Invitation Homes and Amherst Holdings.

To determine the valuation of a property over time, we take the rate-of-change of the HouseCanary AVM of the property on a monthly basis, then apply that same rate-of-change to the principal value of your tokens on a monthly basis. For example, if HouseCanary’s valuation of your property is $100,000 and then one month later it’s $105,000 – your tokens would increase from $50 each to $52.50 each (a 5% increase).

The HouseCanary valuation is updated once per month between the 28th-7th, which is when the principal value of your tokens will update as well. Every time the value of your tokens updates, there will be a report from HouseCanary attached which walks through exactly how their valuation was calculated.

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Last updated 3 years ago