Real estate can be easy and tricky at the same time, talk more of a virtual one. You probably already know what Landa is if you were searching for reviews about them, but for the sake of those that may not know, let’s quickly brush through what Landa is all about and how they work before moving to its features, pros, and cons.
What is Landa?
Landa is an investment company that allows you to buy and rent properties, and invest in rental properties of different grades for as low as $5, all through your phone!
To put it more technically, Landa is a fractional real estate investment startup. They make it easy to invest as a beginner or just an individual who does not like to see their money being idle and is ready to take risks. I mean, you are working, why let your money sit idly?
Who can invest in Landa?
- If you are an accredited investor
- If you don’t care about track records or how many stocks they presently have- Because Landa is a new startup and your participation/membership would later make up their histories
- If you want to invest 10% or less of your net worth or annual income.
- If you are just looking to get into the “real estate assets” world, and you are unsure of where to start, then maybe start here(from Landa).
Why Risk Your Money in Landa?
I’m not here to tell you that Landa is the next big thing, because as stated earlier, Landa is a startup, and startups either succeed or they sink, (I hope it will be the former for them) but rather to give you the facts and let you decide for yourself.
In their words, “They are making property ownership inclusive, for the first time.”
Yes! With the unrelenting and consistent rise in market prices, owning a property is now seeming like reaching the peak of Mount Everest. Landa however, believes that everyone should be presented with the opportunity to partially or fully be a property owner.
That’s not all, they also help you handle all the stress involved, from inquiries to the paperwork, maintenance, and rent. Owning a property can quickly become a second full-time job and that is not encouraging, but with a platform like Landa, they do literally all the work and you can continue with your life as if nothing has changed. Everything comes with ease. Now you may be wondering, why and how they do all of this, and what they stand to gain. Their features will answer those questions.
Features of Landa (How it Works)
Now, before you decide to sign up to Landa and hope to evolve into the next Donald Bren, it would be best to understand virtually everything there is to know from the basics to the complexity of how they run their operations. Below is a summary of how everything works with Landa:
- They pinpoint properties that have potential
- They then find people who are interested in renting the new properties
- Interested parties sign the agreements and make payments through their app
- Finally, last month’s dividends will be paid on the first of every month and as stated earlier, Landa handles the maintenance of the properties.
Since relaunching in 2021 after its first launch in 2019, Landa has been able to come up with some interesting features such as:
- Low starting investment price
With just $5, you can invest with Landa
- Accreditation is not necessary
You do not have to be an accredited investor. In other words, it is not a requirement.
Your investments are used to purchase rental properties, either single-family homes or multi-family ones.
- Your money is yours
Landa charges zero fees for withdrawal, deposits, assets management, or membership. However, there is an 8% management fee on rental properties if and only if there is an occupant of the property. There is also a 6% fee attached to purchasing properties which are used to settle research, reports, and functional and managerial expenses.
- To help you increase your returns as an investor, Landa uses interest-only short-term loans.
- You can choose which property to invest in on the app, and in the case where you want to buy or rent a property, you still do all of that from your phone. No stress.
- You can buy or sell your shares through the Landa app once all the shares of an initial offering have been sold-out.
We can now move to their advantages and disadvantages.
Pros Of Landa
- No membership fee is required to invest with Landa.
- No accreditation is required to be a member.
- You get to earn monthly dividends and continue earning for as long as you maintain an active investment; or passive income.
- You can be an investor for as low as just $5.
- Landa invests and tries out various options and markets in the real estate space.
- The app is easy to understand and navigate
- Landa has a one-of-a-kind secondary marketplace in that you don’t have to worry about asset liquidity.
- Investments are open to anyone provided you are a resident of the United States and are at least 18 years.
Cons Of Landa
- A 6% fee for property acquisition will significantly increase the price of the property.
- Investments in residential properties for lease may lead to losing the house if there’s a decline in market prices.
- Landa charges 8% management fees on each property which is a bit on the high side.
- Since their lunch in 2022, they only recently (2022) started getting some recognition and recording significant growth.
- Lack of geographic diversity: As far as Landa’s real estate is concerned, they have properties only in Georgia and New York.
Going into real estate comes with plenty of potential risks as much as its benefits, particularly with ones that run online like Landa. Nevertheless, it is still a very good option to start as a beginner investor, or just as an individual who wants to have a gradual and passive side hustle. I will encourage you to carefully consider the ups and downs before going into the real estate space because it is not for the faint-hearted!