Invest in fractionalized multimillion-dollar paintings
Invest in fractionalized rental properties
Investments
$15,000
The minimum investment required is $15,000, which can be used to buy one or more assets.
Moderate Risk
3/5
Investing in art through Masterworks has risks, including concentration in a single artwork, limited insurance coverage, market volatility, and uncertainty in the secondary market.
Moderate Risk
3/5
Investing with Lofty carries typical real estate investment risks, including market volatility, economic changes, and property management challenges. Additionally, the use of cryptocurrency and tokenization presents legal and regulatory uncertainties.
Moderate Liquidity
2/5
You have the option to trade shares on the platform's secondary market, but there are certain restrictions on what and how you can trade.
Moderate Liquidity
2/5
Lofty provides liquidity by allowing investors to list their property tokens for sale on the marketplace at any time, with a 2.5% transaction fee. Orders are held in escrow and have a 30-day expiration.
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Low Return
5 %
Lofty offers a 5% cash on cash return, with token values updating monthly based on HouseCanary's Automated Valuation Model (AVM).
Short-term Investment
1 year
Investment time horizon on Lofty is not fixed and is determined by property owners' collective decision on when to sell through the governance system.
Who can invest
International
Masterworks welcomes individuals, corporations, or entities from any location, including the United States.
Who can invest
International
Investors from the US and abroad can invest with Lofty, excluding those from OFAC-sanctioned countries.
Moderate Volatility
3/5
Art market fluctuations can lead to rapid price increases and declines, posing risks for short-term investors who may lose a significant portion of their capital.
Moderate Volatility
3/5
The value of assets on Lofty's platform can be volatile, influenced by economic trends, interest rates, and real estate market conditions, potentially leading to variable financial outcomes for investors.
Regulation and audits
SEC Regulated
Masterworks provides SEC-approved offering circulars for each artwork, allowing public investment. AGD Legal reviews art investments annually.
Regulation and audits
Audited
Lofty's marketplace transactions are executed using a smart contract on the Algorand blockchain, which has been audited by CertiK for security.
Insurance
Yes
Artworks are insured for up to $500 million by Lloyd's of London, but coverage may not fully match the artwork's value.
Insurance
No
Lofty's specific insurance details are not provided, but properties on investment platforms are usually insured against physical damage.
Payouts
Rental Income
Lofty provides daily rental income to investors, which can be withdrawn at any time through various methods including ACH, PayPal, and cryptocurrency options.
Withdrawals
Investors should wait for the company to sell the painting to receive their share of the proceeds, after deducting fees.
Withdrawals
Investors on Lofty can sell tokens anytime on the marketplace and withdraw proceeds using methods like bank transfer, PayPal, or cryptocurrency.
Extra Fees
Yes
Masterworks charges a 1.5% yearly fee in equity, takes a 20% cut on art sales profits, and has a one-time sourcing fee per investment.
Taxes
Tax Form
US taxpayers: subject to collectible gains rate (capped at 28%), unless owning 10%+ of a single painting. Masterworks provides a free Consolidated Tax Statement. Foreign investors: no US taxes or tax withholding.
Taxes
Tax Form
Lofty provides US residents with pre-filled 1099 tax forms for income and capital gains reporting. Non-US residents may reduce withholding taxes with forms W-8BEN or W-8BEN-E if they have a US SSN or ITIN.