The idea of investing in real estate is enticing for many. Owning a rental property can both diversifies your portfolio and provides a steady passive cash.
But the thought of having to become a landlord is a deal-breaker for many of us. Finding the time to manage tenants and maintain a property can seem impossible when you already have a day job consuming 40+ hours of your week.
But what if you could have the best of both worlds? With Arrived Homes, you can enjoy the benefits of real estate investments without having to actually manage any rental properties. Intrigued? Let’s dive in for a closer look at how Arrive Homes works.
- Start collecting property dividends immediately
- Avoid the hassles of being a landlord
- Get started with as little as $100
Arrived Homes Details
Open To Non-Accredited Investors
What Is Arrived Homes?
Arrived Homes is a start-up that wants to create an opportunity for everyday investors to get into real estate investing. Earlier this year, the company raised $37 million in seed funding. One of their primary investors is Jeff Bezos.
Ryan Fraizer, the CEO and co-founder, says, “Our goal is to make the wealth-building potential of owning rental homes more accessible. We believe we can do that by simplifying the process and lowering the cost to get started.”
Essentially, you can start your real estate investment journey with just $100 through Arrived Homes. As an investor, you'll collect dividends from the properties and your share of the appreciation without handling the details like finding tenants or handling maintenance requests.
What Does It Offer?
So, what can Arrived Homes offer you? Here are the features that stand out.
Consistent Passive Income Without The Hassle
A major draw of investing in real estate is the potential to rent out a property for consistent passive income. But being a landlord can be a drain on your time, energy, and resources.
Through Arrived Homes, you won’t have to deal with tenants or property maintenance to enjoy the income stream. Instead, you can let Arrived Homes take care of the details. But you'll still be able to enjoy the rental income through regularly quarterly deposits.
In the second quarter of 2021, Arrived Homes' property dividends ranged from $0.13 to $0.16 per share. They said that this translated to annual returns of 5.21% to 6.42%.
Benefit From Property Appreciation
Since you'll be a part-owner of an actual property, you'll also take part in any returns due to property appreciation. You'll get to watch the property value grow over time. And once the property is sold, you'll receive a percentage of the profits based on your ownership shares.
Low Investment Minimum
You can start investing with Arrived Homes with just $100. But you'll be able to invest up to $20,000 per house. As you continue to work with Arrived Homes, you can build a property portfolio that reflects your goals.
Rigorous Property Requirements
Vetting a property for purchase is something that Arrived Homes takes very seriously. The company uses extensive data science to ensure they are acquiring homes at the right price.
Arrived Homes will take care of the paperwork from research to acquisition. With that, you won’t have to spend time hunting around for the perfect property.
No Personal Liability
As they build their real estate assets, some investors begin to worry about the personal liability associated with managing rentals. But this isn't something that you'll need to worry about when you invest through Arrived Homes.
The company will place all new properties into an LLC. That means there is no personal liability involved in your investment.
Related: How To Set Up An LLC For Investing
Are There Any Fees?
Arrived Homes does come with a few fees that you should be aware of. First, the company charges an annual management fee. We couldn't find a specific percentage listed anywhere on Arrived Homes' site. But several third-party source have reported that the AUM fee is 1%.
Second, Arrived Homes will charge 8% of the rent for property management at each home. The property management expenses are used to pay their third-party property managers. They don’t collect any income from the property management itself.
Third, you'll pay a one-time sourcing fee. This fee will vary by property and will be already included in the share price listed. You can find the sourcing fee for a property inside the Offering Details section of its investment page.
How Does Arrived Homes Compare?
Arrived Homes offers investors the chance to dive into real estate investing with minimal capital. However, the company isn't the only one to provide this option to budding real estate investors.
Roofstock offers investors a similar style of investment through Roofstock One. Roofstock One is currently closed to new investors. But when it relaunches, accredited investors will be able to buy whole or fractional shares of a managed investment property.
Fundrise doesn't allow investors to pick and choose individual properties. But, through its eREITs. it does make it easy to invest in many cash-flowing properties (residential and commercial) starting with as little as $10. Here's a closer look at how Arrived Homes compares:
Open To Non-Accredited Investors
How Do I Open An Account?
Ready to dive in with Arrived Homes? You'll need to start by creating an account with your email and a password. Next, you’ll have to provide your legal name and agree to Arrived Homes’ terms of service.
At that point, you can explore the potential properties in greater detail and link your bank account when you're ready to invest in an offering. When I explored the platform, none of the properties were ready for investment. Instead, I had the option to reserve shares and be notified when I would need to put up my investment.
Is It Safe And Secure?
Arrived Homes offers an opportunity to invest in real estate, which comes with inherent risks. It's possible that you could lose money on a deal. But so far, that hasn’t been the case.
In terms of liability protection, Arrived Homes keeps you safe from any personal liability. Each property is placed in an LLC. As an investor in any home, you will invest in the LLC. With that, you won’t be personally on the hook if any lawsuits come about in regards to a particular property.
With any real estate investing site, it's important to discuss liquidity. The anticipated holding period for the investments listed on its site is 5-7 years. That's a long time to have your money tied up, especially compared to stocks and ETFs which can be sold at any time.
Arrived Homes says that investors will be able to request early redemption of their shares after 6 months. But it also says that there's no guarantee that a secondary market will develop. In other words, you may have a difficult time finding a future buyer who will want to purchase your shares.
How Do I Contact Arrived Homes?
Want to reach out to Arrived Homes? You can get in contact through the Live Chat feature on their site, call 1-814-277-4883, or email their customer support team at firstname.lastname@example.org.
Additionally, you can connect via Facebook, Twitter, Instagram, and LinkedIn @ArrivedHomes.
Is It Worth It?
We love the concept behind Arrived Homes for those who want to invest in real estate without taking on the responsibility of being a landlord. But with few to no properties actually ready for investment right now, the platform seems like it's still a work in progress.
Over time, Arrived Homes could develop into a serious contender in the real estate investing world. But if you're looking to invest immediately, you're likely to find better project inventory on a more-established platform. Check out our favorite real estate crowdfunding sites here >>>
Arrived Homes Features
Varies by property
Annual Management Fee
Property Management Fee
Annual Dividend Yield
5.21% to 6.42% (as of Q2 2021)
Open To Non-Accredited Investors
Limited. No properties currently accepting investments
High. Historical financials and offering circulars provided for each property
Anticipated Investment Term
Early Share Redemption
Can be requested after 6 months
Intended, but not guaranteed
Customer Service Options
Phone, email, chat, social media
Customer Service Phone Number
Customer Service Email Address
Web/Desktop Account Access
Mobile App Availability
Arrived Homes Review
Pricing and Fees
Ease of Use
Arrived Homes allows individual investors to buy shares of rental properties and earn quarterly dividends and capital appreciation.
- Passive income paid out quarterly
- Professional property management
- Minimum investment is just $100
- Series LLC structure protects shareholders from personal liability
- Limited property choices (for now)
- Fees can eat into your returns
- Illiquid investments (5-7 year timelines and no guaranteed share redemption program)
Robert Farrington is America’s Millennial Money Expert® and America’s Student Loan Debt Expert™, and the founder of The College Investor, a personal finance site dedicated to helping millennials escape student loan debt to start investing and building wealth for the future. You can learn more about him on the About Page, or on his personal site RobertFarrington.com.
He regularly writes about investing, student loan debt, and general personal finance topics geared towards anyone wanting to earn more, get out of debt, and start building wealth for the future.
He has been quoted in major publications including the New York Times, Washington Post, Fox, ABC, NBC, and more. He is also a regular contributor to Forbes.