If you’re looking to invest in real estate, especially in rental homes, but don’t have a lot of money to make an investment upfront, Arrived Homes might be for you.
Arrived Homes is a simple investment app that helps people invest in rental properties that are currently on the market. Once you’ve invested you’re entitled to returns on those rentals, which is a great way to make money.
After all, real estate is one of the most stable investments you can make, right?
The biggest problem with investing in real estate has always been that you needed considerable assets to be able to get a rental property. However, Arrived Homes is changing all of that.
This Arrived Homes review covers how it works, its pros, cons, and whether it is legit.
What is Arrived Homes?
Arrived Homes was founded in 2019 by Alejandro Chouza, Kenneth Cason, and Ryan Frazier.
It is a real estate investment platform that makes it easy for retail investors to dabble in rental properties starting at $100.
The company has raised over $37 million in funding from top investors including Jeff Bezos (Bezos Expeditions), Spencer Rascoff, Dara Khosrowshahi, Good Friends, and Hadi Partovi.
How Does Arrived Homes Work?
With Arrived Homes, you don’t have to worry about the responsibilities of being a traditional landlord. The company takes care of property management, including finding renters to make your cash flow is as consistent as possible.
Your initial investment can be as low as $100, and you’ll be able to choose what property you want to invest in from a bank of currently available properties.
Once you’ve invested you’re good to go.
Arrived Homes is designed for long-term investors, and has a holding period of 3 years on your investments. You’re entitled to earnings from increased property value, rent payment, and other increases in the value of the property you’ve invested in.
Since Arrived Homes handles all the details of the actual property management, this is one kind of investment that doesn’t usually take much of your time and attention. That way you can focus on the more important things in your life while Arrived Homes earns for you.
How To Invest in Real Estate using Arrived Homes
Investing in Arrived Homes is designed to be as affordable and in-reach as possible. That includes things like vetting properties to make sure they are a good value for investors and working to make sure investors get the best possible return on their investments at all times.
It’s relatively simple to get started, and you only need a minimum amount of $100 to make your first investment through Arrived Homes.
The first thing you’ll need to do is sign up for your Arrived Homes account.
Once you have an account, you’ll need to choose from the available properties to invest in. These have already been examined carefully using Arrived Homes’ process to make sure the price is right for the quality of the investment.
Their data-driven approach helps Arrived Homes buy only properties that are at a good price for their value, which means that investors have a lot more security in the quality of the investment.
You can choose one property or several different options. That means that you can diversify your investment to make sure you have the best chance of profiting from your investments.
That’s important since you can also choose from a wide range of rental locations and markets, so even if a local area sees a rental crash you’ll still be protected.
Investments can range between $100-$100,000, which means you have a lot of flexibility no matter what kind of investor you are. It also means that your earning potential is incredible with this company.
Investors receive payments quarterly. You can turn those profits around and re-invest in Arrived Homes, or accept the payments as another source of income. It’s entirely up to your business strategy and needs.
Arrived Homes Fees and Pricing
There are a few fees investors should know about before they decide to invest with Arrived Homes. These fees can reduce your share of the profits, and it’s important to be thinking about your investment fees when you’re calculating the earning potential of an investment.
The main fee investors need to worry about with Arrived Homes is the 1% annual management fee. This is pretty reasonable, all things considered, but it does mean that your quarterly payments will probably be a little lower since the fee is factored in.
Arrived Homes also keeps 8% of all rents as a management fee. This covers the operating costs for the management side of the company and makes sure Arrived Homes can function as a typical landlord for its renters.
Lastly, there is a one-time sourcing fee for all new investments. This fee is factored into the price of investing in that property, but it does vary from property to property.
This fee can shrink the size of your initial investment slightly, but since it’s only a one-time fee it’s not usually a problem for investors.
Arrived Homes vs Fundrise
Both Arrived Homes and Fundrise are real estate investment apps designed to be beginner-friendly and accessible to people at all income levels. It makes sense to compare the two though since there are pretty significant differences when you get into the fine print.
For one thing, Fundrise has a slightly more straightforward fees structure, with an annual 1.5% management fee. That’s compared with Arrived Homes’ 1% management fee, which is slightly lower but that has a few other fees included in the process.
Fundrise is also designed to automatically diversify your portfolio, with some customization options for investors to pick and choose from. Arrived Homes puts the control in the investors’ hands by letting you choose exactly the properties you want to invest in.
But one of the core differences is that Fundrise is a general real estate investor, while Arrived Homes focuses on the rental market.
That means that a portion of your income from Fundrise might come from buying and flipping homes, renting large office buildings, and other kinds of real estate income.
Arrived Homes will only ever work with rental properties, but the investor gets to choose exactly which properties they want to invest in.
Both options are highly beginner-friendly, but with enough earning potential to appeal to even experienced investors.
Benefits of Arrived Homes
Low Minimum Investment
The minimum investment is only $100, which is pretty low for a real estate investment. But it’s also a high enough number to help investors start making money, even if they can only make the minimum investment.
No Property Management Responsibilities
Unlike being a traditional landlord, Arrived Homes investors are not required to work with the renters or maintain the properties they’ve invested in. Instead, Arrived Homes manages all the details so you don’t have to worry about it.
No Personal Liability
All of the properties Arrived Homes owns are protected by an LLC, which means that investors have no personal liability if there is a problem with their investments.
Diversification Is Simple
Buying in diverse markets and different kinds of properties is relatively simple with Arrived Homes. It’s much easier than if you were choosing properties for yourself, especially since all of the available properties are pre-vetted and meet strict standards for financial success.
Downsides of Arrived Homes
It Can Be Difficult to Cash Out
One of the biggest downsides of Arrived Homes is that your money is tied up in the investment pretty thoroughly. You should plan on being an investor for several years before you cash out, and if you have to cash out early you have to wait for other investors to buy your share.
Small Property Library
Arrived Homes is a relatively new company, and its property library is still relatively small. There was a delay in releasing new properties for a while, but that seems to have been resolved since. New options are coming available for investors now, but there are still limited choices.
Is Arrived Homes Safe and Legit?
Arrived Homes is a legitimate investment opportunity, but all investment opportunities come with some risk. Thankfully, Arrived Homes works hard to make sure their investors are as secure as possible, which gives you a level of security.
It’s also a little safer than other kinds of investment because the real estate market is still one of the most stable markets available. Even after the crash in 2008, the real estate market is still consistent and usually grows, not shrinks.
Arrived Homes FAQs
You’ll receive quarterly returns and cash dividends for the duration of your investment with Arrived Homes. You can expect an average rate of return between roughly 5-7% on all investments with Arrived Homes.
The minimum investment with Arrived Homes is $100, but you can invest significantly more if you choose to.
Arrived Homes is a good investment if you have some money to spare and don’t have an immediate need for funds. It’s a long-term investment, which means you won’t be pulling money out of the account right away. The average rate of return is comparably high, which means that it’s worth the wait for many investors, but only if you don’t need immediate dividends.
Arrived Homes as a whole isn’t a REIT, or real estate investment trust, but each of the individual homes that you invest in is. That means that you’ve got an additional layer of protection on all of your investments, but also gives Arrived Homes a little more flexibility on the business side.