Investing in real estate can often seem like a daunting and capital-intensive endeavor. Arrived Homes aims to simplify this process by allowing individuals to invest in rental properties without the need for large sums of money or the hassle of property management.

With a low entry threshold and a streamlined investment process, Arrived Homes is opening the doors to real estate investment for everyone. Heres a detailed look at how it all works.

What is Arrived Homes?

Arrived Homes is a real estate crowdfunding platform that enables individuals to invest in rental properties by purchasing fractional shares. Founded in 2019, the platform has gained attention for its user-friendly approach and backing from notable investors like Jeff Bezos. By allowing investments starting at just $100, Arrived Homes makes real estate investment accessible to a broader audience, including non-accredited investors.

How Does Arrived Homes Work?

Arrived Homes is a real estate crowdfunding platform that makes it easy for individuals to invest in rental properties. By lowering the barrier to entry and managing all aspects of property ownership, Arrived Homes allows investors to earn passive income from real estate without the usual hassles.

Property Selection and Acquisition

Arrived Homes starts by identifying promising properties using a data-driven approach. The company focuses on single-family homes and vacation rentals located in high-growth markets across the United States. Once a property is selected, Arrived Homes acquire it either outright or through financing. They look for properties in desirable neighborhoods to maximize the potential for rental income and appreciation.

Investment Process

Once a property is acquired, it is listed on the Arrived Homes marketplace, where investors can browse and choose properties to invest in. Each listing includes detailed information such as the purchase price, expected rental income, and investment terms. Investors can buy shares in a property for as little as $100. These shares are structured through a Series LLC, which provides legal protection and tax benefits.

Management and Maintenance

Arrived Homes takes care of all property management tasks, including finding and vetting tenants, collecting rent, handling maintenance and repairs, and dealing with any tenant issues. This hands-off approach allows investors to enjoy the benefits of real estate ownership without the responsibilities of being a landlord. The platform uses local property management companies to handle the day-to-day operations.

Pros and Cons of Arrived Homes

Investing in real estate through Arrived Homes can be a lucrative and accessible option for many, but it's important to weigh the advantages and disadvantages before committing. Heres a balanced look at the pros and cons of using Arrived Homes as an investment platform.

Pros of Arrived Homes

Low Minimum Investment Arrived Homes allows individuals to start investing in real estate with as little as $100. This low entry barrier makes it accessible to a broader range of investors, including those who may not have significant capital to invest.

Hands-Off Investment Arrived Homes manages all aspects of property management, from finding and vetting tenants to handling maintenance and repairs. This hands-off approach allows investors to earn passive income without the responsibilities typically associated with being a landlord.

Diversification By allowing fractional ownership, Arrived Homes enables investors to diversify their portfolio across multiple properties and locations. This can help spread risk and potentially increase returns by not being tied to a single property or market.

Cons of Arrived Homes

Limited Track Record Arrived Homes was founded in 2019, which means it has a relatively short track record compared to more established real estate investment platforms. Potential investors should be aware of the limited historical performance data available.

Liquidity Concerns Real estate investments through Arrived Homes typically have a holding period of five to seven years for single-family homes and up to fifteen years for vacation rentals. This long-term commitment means that investors may not be able to easily liquidate their investments if they need access to their funds quickly.

Fees Investing with Arrived Homes involves several fees, including a sourcing fee (a percentage of the property purchase price), an annual asset management fee (1% of rental income), and a property management fee (8% of the rent collected). These fees can eat into the overall returns.

Who Should Consider Investing with Arrived Homes?

Arrived Homes are ideal for individuals who want to invest in real estate without the significant capital requirements and management responsibilities typically associated with property ownership. This platform is particularly suitable for those looking to diversify their investment portfolio with real estate assets. It appeals to new investors who may not have extensive knowledge or experience in real estate but are interested in earning passive income from rental properties.

Investors who appreciate a hands-off approach will find Arrived Homes attractive, as the platform manages all aspects of property maintenance, tenant management, and rent collection. It is also a good fit for those with limited funds, given the low minimum investment requirement of just $100. This allows for fractional ownership, making real estate investment accessible to a broader audience.

However, potential investors should be aware that real estate investments involve risks, including market fluctuations and property depreciation. Those who cannot commit to a longer investment horizon, typically five to seven years, may find the platform less suitable. Overall, Arrived Homes provides a convenient and low-barrier entry into real estate investment, making it a compelling option for both novice and seasoned investors looking to diversify their portfolios.

Conclusion

Arrived Homes offers a unique and accessible way to invest in real estate. By lowering the barriers to entry and handling all the complexities of property management, the platform provides a simplified and passive investment experience. Whether you are a seasoned investor looking to diversify or a beginner exploring real estate for the first time, Arrived Homes presents a compelling option to consider.

By understanding how Arrived Homes works and evaluating its benefits and risks, you can make an informed decision about whether this innovative investment platform aligns with your financial goals.