Exploring the potential of rental properties as a source of passive income has always been an attractive proposition, thanks to their dual benefit of providing regular rental income and appreciating in value over time.
However, the barriers to entry, such as the hefty initial investment, the complexities of property management, and the challenges of dealing with tenants, often deter the average investor. This is where Arrived Homes revolutionizes the investment landscape, offering a unique opportunity for individuals to participate in the real estate market with considerably less stress and financial strain.
It’s an inviting option for those who wish to earn passive income but want no part of the traditional responsibilities of being a landlord. What sets Arrived Homes apart is its openness to non-accredited investors, breaking down the financial barriers that typically restrict access to lucrative real estate investments.
For those curious about how to invest in Arrived Homes and what it brings to the table, continue reading, as I get into those details and more.
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What is Arrived Homes?
Arrived Homes, established in 2019 by visionaries Ryan Frazier, Alejandro Chouza, and Kenny Cason, has quickly carved out a niche in the real estate investment landscape by amassing an impressive portfolio of residential properties.
It’s clear to me that Arrived Homes sets itself apart from the other fractional real estate investing platforms that have a commercial real estate focus. Arrived Homes instead opens the doors to investing in residential and vacation rental properties.
At the heart of Arrived mission, is a commitment to democratizing the wealth-building opportunities traditionally associated with rental property ownership. The company aims to achieve this by streamlining the investment process and reducing the financial barriers to entry, making it simpler and more affordable for individuals to start building their real estate portfolios.
How to Invest in Arrived Homes
If you are wonder about the process of how to invest in Arrived Homes, I broke it down below:
- Property Selection: Here’s how it starts – Arrived Homes scours the U.S. market using a mix of tech magic, data analysis, and market smarts to find properties with promise. They’re not just looking at any property, though. Each one undergoes a deep dive to check out its condition, location, potential for rent, and how much dough it could make us over time.
- Crowdfunding: Once they’ve picked a winner, it’s showtime on their platform. This is where you and I can chip in, buying shares for as low as $100. It’s like we’re all throwing in a bit to get a slice of the real estate pie without needing to buy the whole thing.
- Property Purchase: After we all pitch in and hit the crowdfunding goal, Arrived Homes steps in and buys the property. It’s then tucked into its own LLC, making us fractional owners but keeping our personal assets safe from any direct liabilities.
- Rental Income: The heavy lifting of finding tenants, chasing rent, and fixing leaky faucets? Arrived Homes has it covered. We just sit back and wait for our share of the rental income to roll in every quarter, all based on how much of the property we own.
- Property Appreciation: Besides the rent checks, there’s also the chance our slice of the property gets more valuable over time. When the property’s value goes up, so does the value of our shares. And when Arrived Homes decides it’s time to sell, we get a piece of the profit pie.
- Exit Strategy: Typically, Arrived Homes plans to hold onto each property for about 5-7 years for single-family homes, and a bit longer for vacation spots. When the time’s right, they sell off the property. Based on our share, we get our portion of the proceeds from the sale.
Arrived Homes Fees & Pricing
Now that you know how to invest in Arrived Homes, I think the next thing you need to do is understand the fees that Arrived Homes charges. They charge different fees depending on property type. Here is my breakdown:
- Agent Rebates: Arrived Homes benefits from rebates when purchasing properties, which is a common practice in real estate transactions.
- Sourcing Fee: A one-time fee is applied to cover the expenses related to finding, acquiring, and preparing properties for investors. This fee varies depending on the type of rental:
- For long-term rentals, the sourcing fee is pegged at 3.5% of the property’s purchase price.
- For vacation rentals, it’s slightly higher at 5% of the purchase price.
- Annual Asset Management Fee (AUM): To manage the investment and ensure its growth, Arrived Homes charges an annual fee. This fee is relatively modest in the crowdfunding sphere, at 1% of the property’s value for long-term rentals. For vacation rentals, the AUM fee is assessed quarterly at 0.125% of the property purchase price, reflecting the differing nature and potentially higher turnover of vacation properties.
- Property Management Fee: This fee covers the day-to-day operations of managing the property, including tenant interactions and maintenance. The fee structure varies:
- For long-term rentals, it remains constant at 8% of gross rents.
- Vacation rentals, however, incur a higher property management fee, ranging from 15% to 25% of gross rents, due to the additional complexities and higher maintenance needs associated with short-term rentals.
- Gross Rents Fee: Specifically for vacation rentals, Arrived Homes charges a fee of 5% of the gross revenue, which is part of managing the fluctuating incomes that come from short-term leasing.
Final Thoughts
For those of you dreaming of earning passive income through real estate but dreading the responsibilities that typically come with being a landlord, Arrived Homes is a game-changer. Its unique approach, focusing on residential and vacation properties and welcoming non-accredited investors, opens up the real estate market to a wider audience.
So, if you’re curious about dipping your toes into the real estate investment pool without getting overwhelmed, Arrived Homes is worth a look. It’s a chance to be part of a community of investors who enjoy the benefits of property ownership without the usual hassles.
Ready to see what Arrived Homes can do for your investment portfolio? Click Here to discover more and begin your journey toward smart, stress-free real estate investing.
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