Interest rates are rising. The days of low home rates are coming to an end. In fact, according to CNBC, interest rates will continue to climb throughout 2022. That means the already high barrier of purchasing a home is about to get even higher.
But investing in real estate remains one of the safest and most stable ways to earn income. With inflation going up and wages staying flat, many people are wondering how they’re going to reach their financial goals.The people at Arrived Homes have developed a strategy to combat all these forces working against us investing in real estate. By sourcing rental properties in markets they’ve researched to appreciate, they have made available a way for anyone to invest in real estate—no matter what happens with the interest rate.
Who is Arrived Homes?
Arrived was founded in 2019 by Ryan Frazier. In his own words, he’d like to make “wealth building… more accessible.” That means putting the dream of owning rental properties within the sights of every person.
By leaning on market insights and property evaluation, they only look for premium properties that they anticipate will grow, and find tenants that are trustworthy. Arrived has partnered with everyone from individuals like you and me to the CEO of Uber and former CEO of Zillow.
They are a dedicated team of people who are committed to open and transparent investing, and we found them to be worthy of your trust and investment.
How Does Arrived Work?
The best way to think of Arrived Homes’ business model is that each home they buy is an LLC. They purchase a home, then sell shares of that home to investors. With each rental payment made by tenants, investors receive a dividend payment.
After a holding period of 5-7 years, Arrived sells the property when the market offers an optimal return. At that point, the profit is divided pro rata, according to the amount of shares, among all the investors.
When you sign up for an Arrived account, you can easily browse homes, see how much Arrived has purchased a property for, and how much they are looking to raise from selling shares.
You can also see the projected rental and sales dividends, and browse the legal and financial documents associated with a given property. You can have access to as much information regarding a property as you would if you were buying it yourself—all without leaving your home.
How Does Arrived Choose Homes?
One of the most stressful times in life is home buying. According to one survey, a third of American home buyers are under so much stress about the process that they actually cry.
Arrived takes all that stress out of the equation. They use data and analytics to determine what homes they will purchase. Because they are not purchasing homes that they as individuals will live in, much of the stress and emotionality is removed.
Rather, Arrived looks at the rentability and salability of the property. They choose homes that will rent for an appreciable amount of money, and that will sell at a profit in the window of time they desire.
How Are Investors Paid?
Investors in property are paid pro rata out of rent and property sale profits. That means that if you’re invested more heavily in a property, you’ll receive a larger share of the rental revenue. And when the house sells, you’ll receive a larger portion of the sale price, as well.
Revenue is shared quarterly, and there are some costs to account for. For instance, Arrived takes care of all the paperwork, maintenance, and sale of the properties. Many investors find this to be well worth the fee prices.
What’s really fantastic about the opportunities at Arrived is that you earn your money passively. Simply invest, and then wait for the profit sharing. You don’t have to manage the rental, deal with the renters, find properties, or worry about selling them. Arrived takes care of everything for you.
What Does it Cost?
Investing in any venture means paying some form of money. In many cases, a person invests their money, and then pays fees—fees to the broker, to the money manager, to everyone, it seems like, who wants a piece of the pie.
But Arrived is different. When you invest with them, you pay only as much as you would like to invest in a property, starting as low as $100. That means you can be a real estate investor for less than you spend on coffee in a month.
With that minimum investment you’re entitled to the same rate of return as anyone else invested in a property. Of course, the more you invest the more of that rate you’ll see as profit.
Reasons For and Against
Why We Recommend Arrived Homes
Investing in real estate might be the most stable form of investment around. No matter what ever happens, people will need housing they’re going to pay somebody to get it. At Arrived Homes, they figure everyone should be able to get access to that model.
That means that even if you’re not willing to invest tens of thousands of dollars in a new property, you can still invest in the real estate market. Arrived lets you receive passive rental income without having to go through the home buying process all over again.
On top of that, you don’t have to worry about rental agreements, or being called in the middle of the night because of a busted pipe. You simply invest the amount of money you feel comfortable with and sit back.
The other great thing about Arrived is that you get to leverage the home buying markets from all over the country. So if you live in an expensive market, you can still utilize the more affordable markets in the Midwest or the South, all from your own living room.
Why Arrived Homes May Not be Right for You
With any investment there is risk. And we all remember the housing crash of 2008. So investing in real estate may seem risky for some people. We could argue that that makes shared investing like with Arrived more appealing, but we also understand that that’s not the case for everyone.
Really, the only reason we can see not to give Arrived a try is if you simply don’t want to invest in real estate, at all. Otherwise, for the low risk of only $100, you can try it for yourself.
Pros and Cons
If you’re looking for an investment opportunity, we recommend giving Arrived Homes a visit. You can invest as little as $100 and watch as the process works out. You will need to wait five years or so for the big payoff—but in that time you’re not managing a property, handling renters, or worrying about mortgage payments.
And the best news, that entire five years you’re sharing in the rental property revenue. Passive income at its finest.
When you invest with Arrived you can be assured that they’re doing the professional market research to acquire the best investments in the most rentable areas. And the properties are purchased with maximum sale value in mind.
Arrived Homes isn’t for everyone; we know that some people are wary of real estate investing, and that’s okay. But if you’ve ever thought about getting into the rental investment world, Arrived is your best opportunity to start.
That really depends on the amount you invest and the rental value of the home. In the example on the Arrived website for a home in Nashville, TN, the home was expected to earn 3.6% every year. That means for every $100 invested in that home you would receive $3.60 a year.
According to Arrived Homes, they are seeing as high as 7.2% percent per year. Combined with the rental income, you could see over 10% return on your investment capital.
Right now Arrived doesn’t have a secondary market for their shares. That means that once you purchase shares in a property you cannot sell them; to realize the full potential you will need to wait until the property sells. But Arrived says they are working on that secondary market.
You may find periodically that Arrived doesn’t have any inventory of property to invest in. That’s because they don’t acquire homes just for the sake of having inventory. They are highly selective, to ensure that investments are safe and profitable. It’s also important to keep in mind that shared property investing has become extremely popular—people are jumping on opportunities as soon as they surface.