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Owning rental property could be a beneficial way to make money. Some of the prospective financial benefits are big tax breaks, protection against inflation risk, and moving away from stocks that are traded on the market and whose prices tend to move in the same direction. Arrived (formerly Arrived Homes) Review

But it takes a lot of time and effort to identify rental homes that are good investments. Checking out properties outside your hometown requires significant travel time, which is difficult with a full-time job. Even if you can do your research, huge minimum investments can stop you from doing so.

There is, thankfully, a better method. Arrived, which used to be called Arrived properties, is a digital rental property investment platform that makes it easy to develop a portfolio of rental properties in different parts of the country, including short-term rentals. And with a minimum investment of only $100 per home, it’s easy for most people to get involved, not just wealthy accredited investors.

How Arrived Works (Arrived (formerly Arrived Homes) Review)

Arrived’s four-step rental real estate investment process couldn’t be more straightforward. Before getting started, here’s what you should know about each part of the process:

1. Browse Available Homes

Your first step is to browse the individual homes available through Arrived. By the time a home appears on Arrived’s website, it has already been subjected to a thorough vetting process that ensures Arrived purchases the right homes at the right price.

Specifically, that process considers:

• Market Cash Flow Potential: Arrived combs through hundreds of local real estate markets to find those with the best cash flow potential for single-family residential real estate and short-term vacation rentals.
• Market Appreciation Potential: Arrived also considers housing price trends in each market and selects for high property appreciation potential.
• Neighborhood and Home Attributes: Arrived uses its considerable local market knowledge and proprietary analysis protocols to select desirable homes in desirable neighborhoods.
• Investment Committee Review: Before purchasing a property, Arrived presents its analysis to its investment committee for a thorough review. This ensures Arrived acquires properties that offer maximum income and appreciation potential for its investors.

Arrived’s property listings contain a wealth of information about available homes, including:

• Key features of the home, like square footage and bed and bath count
• Whether the home is a short-term or long-term rental
• Purchase price
• Monthly rent
• Rental status (generally, rented or on-market)
• Independent valuation reports sourced from Zillow
• Real estate price trends for the surrounding area
• Financing and equity details (how much of the home is financed versus owned outright)
• Raise amount (how much Arrived is seeking from investors)
• Share price and count
• One-time proceeds to Arrived
• Arrived’s annual management fee
• A property financial breakdown covering operating income, allocation to cash reserves, dividends paid to investors, and other details
• Key details about the local economy where the home resides, including population growth rate and major employers

2. Select Your Investment Property or Properties (Arrived (formerly Arrived Homes) Review)

Next, determine how much you want to invest and in which properties. You can customise the number of shares you purchase in each property as long as you meet the minimum investment threshold and enough shares remain to be purchased to fill your order. You are also free to mix and match properties according to your preferences.

3. Buy Shares

When you’re ready to buy shares in an Arrived property, carefully review all offering materials before committing to a purchase. These documents contain important information about potential investment risks and outline the terms of your investment.

Keep in mind that your investment is not as liquid as investments in market-traded securities — Arrived advises an anticipated hold period of five to seven years for each property it invests in.

If you’re comfortable proceeding with your investment, you’re ready to electronically sign the investment documents and fund your investment from an external bank account of your choosing.

4. Earn Income & Appreciation While Arrived Manages Your Property or Properties

Now comes the fun part. As an Arrived investor, you have absolutely no operational obligations.

That means no responsibility to visit the property, communicate with tenants, make repairs, or perform any other property management duties. Your job is to sit back and collect passive income — quarterly property dividends paid out of operating income — and periodically review your investment to make sure it’s performing in line with your expectations.

Your net return on any given property or property portfolio can vary based on market conditions, operating expenses, and other factors. But property dividends have produced an annual return on investment between 6% and 12% as of Q3 2021, according to Arrived.

How Arrived Makes Money (Arrived (formerly Arrived Homes) Review)

Arrivals make money in three different ways:

• Agent Rebates: Arrival collects a real estate agent rebate when it purchases a property. This rebate is paid by the previous owner, not Arrived Investments or Arrived itself.
• Sourcing Fee: This expense is a one-time fee that covers Arrived’s work to source and prepare the property for investment. It may include Arrived’s cost to finance and hold the property during the offering phase.
• Annual Management Fee. This is a recurring fee based on investors’ capital contributions. It’s paid out of the property’s operating income and covers the ongoing cost of property management.

Key Features

Ownership Without Responsibility

Arrived makes it easy to own real estate without requiring you to deal with the stress, labour, and expense of managing and maintaining it. Your biggest job is to select the properties you want to invest in, but you don’t have to carry the burden of physically managing the property and tenants.

Legal Protection (Arrived (formerly Arrived Homes) Review)

As an investor, you won’t face personal liability if there are issues with the property. Each home is owned within an LLC, keeping any investors safe from legal disputes. This is often the largest risk of investing in real estate, dealing with legal trouble from renters or other parties. Not only do you not have to deal with the hassle, but your funds are protected too.

Single Family Fund

Arrived’s newest offering, the Single Family Fund, provides more opportunity for diversification at a passive level. This fund automatically diversifies your real estate investments across several properties and markets rather than selecting them yourself.

It offers liquidity six months after the initial investment and quarterly for the duration of it, as well, making it easier to liquidate your investment sooner than the 5–7 year holding period Arrived requires. It also has higher investment maximums and always-available investing, allowing you to invest on your schedule.

Finally, the Single Family Fund has lower costs by bundling the properties into one fund. They can operate under one LLC and share tax preparation and auditing costs.

Vetted Renters

The company thoroughly vets renters upon arrival to minimise turnover and minimise the risk of loss. This also takes the pressure off investors to manage the property themselves and risk making a poor renter decision.

Consistent Passive Income (Arrived (formerly Arrived Homes) Review)

Because Arrived handles the property management, all you have to do is sit back and collect the proceeds from rental income and appreciation. Arrived pays dividends every January, April, July, and October.

Pricing and Fees

With a low minimum investment of $100, Arrived makes it easy for anyone to invest in real estate. But any investment has fees, so understanding the pricing structure can help you determine if it’s right for you.

• Sourcing fee: This is a one-time fee Arrived charges for all the work that goes into finding and vetting a property. The fee is included in the share price and is disclosed in the Offering Detail section of the listing.
• Asset under management fee: Arrived charges a small percentage of your investment or assets under management quarterly. It typically ranges from 0.15% to 0.25% of assets under management.
• Agent rebates: Arrived receives a real estate agent rebate from the seller when they buy the property (investors don’t pay this).

Advantages of Arrived (Arrived (formerly Arrived Homes) Review)

Arrived has several notable advantages for property investors. Among them are its very low investment minimums, thorough renter vetting, no personal liability for investors, and access to high-return markets regardless of where investors live.

• Very Low Investment Minimums. You can invest in an Arrived property with a minimum investment as low as $100. That’s as little as $2,000 for shares of 20 different properties—and it brings true portfolio diversification within reach for everyday investors.
• Access to High-Return markets, Regardless of Investors’ Location. Arrived evaluates hundreds of U.S. housing markets to find those with the highest potential return on investment. That’s good news for investors who don’t live in a high-return real estate market.
• Choose Between long- and Short-Term Rentals (Or Both). Arrived has a mix of long-term rentals and short-term vacation rentals. That makes it ideal for real estate investors who want to diversify their property holdings.
• Investors have no personal liability. Arrived purchases homes through limited-liability corporations (LLCs), and its investors buy shares in those companies. This indirect ownership model insulates Arrived investors from personal liability for issues arising from Arrived’s property ownership or management.
• Thorough Due Diligence on Properties. Arrived subjects potential investment properties to a rigorous due diligence process. Its investment committee selects only the highest-quality opportunities, giving investors confidence no matter how they choose to invest.
• High Standards for Renters. Arrived has a thorough vetting process for renters as well. This decreases (but doesn’t eliminate) the risk of delinquencies and vacancies that may negatively impact cash flow to investors.
• No Operational Responsibility for Investors. Arrived takes full responsibility for property management. As an investor, you’re under no obligation to handle any aspect of management and won’t need to check in on your properties daily.
• Consistent Cash Flow for Investors. Arrived goes to great lengths to ensure you’ll consistently receive rental income from your properties. Although actual rates of return may vary, you can expect consistent cash flow on your investments.

Disadvantages of Arrived

Arrived has two notable disadvantages: a limited inventory of available properties and a limited formal share redemption programme or secondary market.

• Limited Availability. Arrived doesn’t have a huge inventory of available properties. A review of the site in December 2023 revealed a single-digit number of homes ready for investment— and far more sold-out homes. It’s good that demand for Arrived properties is high, but the lack of choice is a definite disadvantage for now.
• Limited Secondary Market or Formal Share Redemption Program, As of December 2023. Arrived is working on a formal share redemption programme and possibly a secondary market for property shares as well. Both would increase liquidity for investors, but it is only available for the new Single Family Fund. This is a potential downside for Arrived investors seeking a reliable way to sell their shares before the end of the anticipated five- to seven-year hold period. For now, Arrived may honour redemption requests but does not guarantee that it will.

How Arrived Stacks Up

Arrived isn’t the only real estate crowdfunding platform for nonaccredited investors. In an increasingly crowded marketplace, let’s see how it stacks up to a close competitor: Groundfloor.

Final Word (Arrived (formerly Arrived Homes) Review)

Arrived is a digital real estate crowdfunding platform with very low initial investment minimums—as low as $100 per property—and a promise (although not a guarantee) of consistent rental payments for its investors.

Arriving has other benefits too. You don’t need to be an accredited investor to participate in Arrived’s offerings. You don’t have to live anywhere near the homes you invest in or take on any responsibility for property management. And you don’t have any personal liability for what goes on in the homes you invest in—which might not be the case when you purchase rental properties directly.

All in all, as you can see in the Arrived review, it is a great choice for anyone eager to diversify away from tightly correlated securities investments and gain exposure to rental real estate. Why not take the next step and see if it’s the right fit for you?