Reviewing Arrived’s strengths and weaknesses is a good way to get a feel for the platform.
By Vance Cariaga
What Is Arrived?
Who Is It Best For?
How it Works
Arrived vs. Competitors
Final Take
Accessibility
4.5
Account Minimum
4.5
Risk/Reward
4.0
Breadth of Products
3.0
What Is Arrived?
Arrived Homes is a real estate investment platform that lets you invest in fractional shares of rental homes for as little as $100 per house or as much as $20,000. The platform is open to all kinds of investors and doesn’t require you to be an accredited investor to take part. Arrived is backed by various financial heavyweights, including Jeff Bezos‘ Bezos Expeditions, Marc Benioff’s Time Ventures, and Uber CEO Dara Khosrowshahi.
Pros
- Low minimum investment
- Steady returns that historically average 3.2%-7.2% a year
- Passive income with no operational responsibility
Cons
- Minimum hold period of 5-7 years
- Small selection of available properties
The company uses a passive investment model that differs from other rental home investments, which might require you to take an active role in managing properties. Arrived takes on all operational responsibility, including acquiring homes and vetting tenants.
Who Is It Best For?
Arrived Homes aims to simplify real estate investing by offering low barriers to entry while maximizing returns and minimizing risk. It is best for casual investors who want to dip a toe into the home rental market with as little fuss as possible. Fees and investments are minimal, so just about all of your money goes into the investment itself. The platform is geared toward longer-term investors because it has a minimum holding period of five to seven years per property.
How to Apply to Arrived
To sign up for an Arrived account, hit the “Sign Up” link on its website. You’ll be asked to provide your email address and create a password. After that, you’ll be asked to provide various account details, including how you want to fund your account. The platform is open to U.S. citizens or residents above the age of 18, and you don’t need to be an accredited investor to participate.
How it Works
Once you set up your Arrived Homes account, the process of investing in a home is pretty straightforward. First, you browse the homes on the website, which are broken down into “Trending,” “For Sale,” and “Sold Out.” When you find properties you like, you’ll decide how much money you want to invest in each home and select the shares. The final steps are to review the terms, sign an online contract, and fund the investment by linking your bank account.
As an investor, you will receive quarterly cash dividends from tenants’ rental payments. The income you receive will be proportional to your ownership of the property.
Arrived itself takes care of all the operational work, including buying the homes, finding tenants, and managing the properties. From an investment standpoint, Arrived’s model is similar to a mutual fund because professionals determine the best way to invest the money while you sit back and wait for the returns.
How Arrived Earned its Scores
Accessibility
There are very few restrictions if you want to invest with Arrived. The platform is open to all U.S. citizens or residents above the age of 18, and you don’t need to be an accredited investor to participate. You can also invest through certain entities or self-directed retirement accounts. The account setup process can be done quickly and easily on Arrived’s website.
Account Minimum
With a minimum investment of $100 and a nominal fee, you don’t have to break the bank to invest with Arrived Homes. Just keep in mind that there is a minimum hold period for each property of five to seven years.
Risk/Reward
Arrived’s minimum $100 investment means there is little financial risk involved if you want to start out slow. Cash dividends from rental income at Arrived typically average a 3.2%-7.2% annual return on investment. If you’re looking for higher returns, however, you’re better off investing in other vehicles. For example, the stock market has returned an average of 10% a year over the past 50 years.
Breadth of Products
Arrived only offers investments in rental homes, so there’s not a lot of product diversification. Sometimes its inventory of investment opportunities is very limited, with only a few available investment homes listed on its website.
Arrived vs. Competitors
Arrived Homes competes with a few other platforms that offer similar investments and services. Here’s a quick look at how it stacks up against a couple of others.
Good To Know
When you purchase shares in an Arrived rental home, you are directly buying ownership in the individual series of a Series LLC that owns the home. If you buy 5% of the shares in a single home, for example, you are entitled to 5% of the economic interests of the asset over time. In addition to income from rent, this could also include income from property value appreciation.
Arrived vs. Groundfloor
Groundfloor is a real estate crowdfunding site that offers shares of short-term, high-interest real estate loans to the general public for a rock-bottom minimum investment of $10, which means it has an even lower financial commitment than Arrived. Arrived is a better fit for investors who want to own shares of the properties themselves.
Arrived vs. Roofstock
Roofstock lists hundreds of single-family rental homes on its website to buy, sell, or invest in, so it’s a better choice if you want to cast a wider net. But Arrived’s minimum investment of $100 for rental homes is much lower than Roofstock’s.
Final Take
Arrived Homes offers a viable alternative to traditional real estate investing, which typically involves spending large sums of money to acquire a rental home and then either managing it yourself or hiring a management company. With Arrived, you can get a piece of the market for as little as $100, without having to get involved in operations or management. The platform is best for long-term investors who prefer steady returns over big gains. You’ll have to make a commitment of at least five years, and your return might be lower than with stocks or other investment vehicles.
Click here to visit Arrived and learn more.
Who can invest in Arrived Homes properties?
The platform is open to U.S. residents above the age of 18. You don’t need to be an accredited investor to invest with Arrived.
Will I have any responsibilities for managing the properties I invest in?
No, Arrived takes care of all the home ownership responsibilities, including selecting, buying, renovating and managing the homes, as well as finding tenants.
What if I want to liquidate my investment before the holding period ends?
Arrived’s hold period for each property is five to seven years as of March 2022, though it said on its website that it is working on a program that would allow investors to request to redeem their shares and liquidate their investment earlier.
The platform is open to U.S. residents above the age of 18. You don’t need to be an accredited investor to invest with Arrived.
No, Arrived takes care of all the home ownership responsibilities, including selecting, buying, renovating and managing the homes, as well as finding tenants.
Arrived’s hold period for each property is five to seven years as of March 2022, though it said on its website that it is working on a program that would allow investors to request to redeem their shares and liquidate their investment earlier.
