Arrived Homes is a unique platform in the real estate investment arena. It simplifies the process of investing in rental properties by offering fractional ownership to retail investors. What makes Arrived Homes stand out is the low barrier to entry, as you can start investing with as little as $100, without the need to be a special investor.
This platform eliminates the complexities typically associated with real estate investments, such as handling large down payments, managing property maintenance, or dealing with tenants.
If you’re considering this platform, it’s essential to understand what to know before signing up to Arrived Homes. Like any investment, it’s crucial to assess whether Arrived Homes aligns with your financial goals and investment strategy. In my Arrived Homes review I aim to provide insights into the platform, helping you decide if it’s a suitable match for your real estate investment needs.
What To Know Before Signing Up To Arrived Homes
Before signing up to Arrived Homes you need to know all the important information such as, benefits, drawbacks, and Pricing. But before we get into all those details, let me give you a bit of background about Arrived Homes.
What Is Arrived Homes?
Arrived Homes, established in 2019 by Ryan Frazier, Kenny Cason, and Alejandro Chouza, is a trailblazing real estate crowdfunding platform. It’s designed to democratize the process of investing in residential rental properties, making it accessible for a broader range of individuals. Unlike many of its counterparts focusing on the commercial real estate sector, Arrived Homes zeroes in on the residential market.
The platform is renowned for its simplicity and user-friendliness, allowing investors to buy fractional shares in single-family rental homes with as little as $100. This innovative approach opens the door to real estate investment in high-growth U.S. markets such as Denver, Nashville, and Atlanta, traditionally reserved for those with substantial capital.
Arrived Homes’ offerings include a variety of properties, some acquired through long-term loans (leveraged) and others bought outright. Notably, the platform gained early investment traction from prominent figures like Amazon’s Jeff Bezos. Arrived Homes’ mission is not only to simplify the investment process but also to expand access to real estate’s wealth-building opportunities, traditionally limited to a select few.
Arrived Homes Benefits
Now that we have a common understanding of the history and mission of Arrived Homes, let’s look into the benefits. Here are the features I think you should know before signing up for Arrived Homes:
- Exclusive Focus on Residential Real Estate: Arrived Homes is one of the few platforms specializing solely in residential real estate investments.
- Low Minimum Investment: Investors can start with as little as $100, making real estate investment accessible to a wider audience.
- Quarterly Rental Income: Shareholders receive their portion of rental income on a quarterly basis, providing a steady passive income stream.
- Complete Property Management: Arrived Homes manages all property-related tasks, offering investors a hands-off experience.
- Hassle-Free Ownership: Investors avoid the typical responsibilities and time commitment of a landlord, as Arrived Homes handles tenant screenings and property maintenance.
- Legal Protection via LLCs: Each property is held within an LLC, safeguarding investors from personal liabilities in case of legal issues.
- Rigorous Renter Vetting: Arrived Homes implements thorough screening processes to find reliable, long-term tenants for the properties.
- Data-Driven Investment Tools: The platform provides advanced, data-oriented tools to aid investors in making more informed decisions.
Drawbacks of Arrived Homes
Now that I have outlined the benefits of Arrived Homes, the next thing we need to do is discuss the shortcomings of Arrived Homes. Here are a few areas that might give potential investors pause before signing up:
- Inventory Shortages: Arrived Homes frequently experiences a shortage of available properties, leading to many listings being marked as “sold out.”
- Communication Gaps: There’s room for improvement in communication, especially regarding property availability and fee structure clarity.
- Ethical Concerns: The impact of REITs and fractional ownership on rising housing prices has stirred ethical debates about its role in the real estate market.
- Long-term Investment Focus: Arrived Homes is primarily suited for long-term investments, which might not appeal to those seeking short-term gains.
- Comparatively Lower ROI: The potential Return on Investment (ROI) with Arrived Homes might be lower than what can be achieved in the stock market.
- Lack of Mobile App: Currently, there’s no dedicated mobile app for Arrived Homes, which could hinder accessibility for some users.
- No Sign-up Bonus: Unlike some investment platforms, Arrived Homes does not offer a sign-up bonus to new investors.
If any of these potential drawbacks are a red flag for you, there are other fractional real estate investment alternatives. Check out my Arrived Homes vs Fundrise article to see how they compare.
Arrived Homes Pricing
Now it’s time to get into the most important fact you should know before signing up for Arrived Homes: the cost. Here is my breakdown of the various fees you will incur with Arrived Homes:
- Initial Investment: A minimum of $100 is required to start investing with Arrived Homes, payable through a bank transfer or a checkbook IRA.
- Sourcing Fees: This one-time fee covers the expenses of locating and preparing properties for investment, with the amount detailed in the property’s Offering Details.
- Annual Asset Management Fees: Arrived charges an annual fee for ongoing expenses like tax preparation and insurance. This fee varies per property and is clearly indicated upfront. The fee is typically around 1%.
- Taxes on Earnings: Earnings through Arrived Homes are taxable, and the platform provides necessary tax documents for your filings.
- Early Liquidation Fees: Selling shares before the recommended holding period of three to seven years can incur transaction fees, as Arrived doesn’t manage secondary market sales.
- Agent Rebates: Arrived Homes receives rebates from real estate agents when purchasing properties. This will vary by property, but be disclosed upfront.
- Property Management Fee: 8% of rental income is allocated for managing each property’s day-to-day operations.
Arrived Homes offers a unique opportunity for individuals to enter the real estate market with a relatively low investment. Before signing up, it’s crucial to understand that Arrived Homes is best suited for long-term investments, typically ranging from three to seven years.
While some may wonder, “Is Arrived Homes a scam?”, it’s clear from its operational transparency, growth, and backing by reputable investors that it is a legitimate platform offering a novel approach to real estate investing. To learn more and make an informed decision about whether this investment aligns with your financial goals, Click Here.