Arrived Homes Review
You can now co-own rental properties with just $100, thanks to Arrived. But should you do so? Read on.
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Invest in Rental Homes with $100+ | |||
Overall Score | 3.9 | ||
Minimum Deposit | 5.0 | ||
Commissions and Fees | 3.5 | ||
Customer Service | 5.0 | ||
Ease of Use | 5.0 | ||
Liquidity | 1.0 | ||
Pros and Cons
- $100 minimum
- Earn monthly rental income
- Invest in individual homes
- Illiquid investment
- No dividend reinvesting yet
Bottom Line
Real estate investment platform for rental properties with only $100 as minimum
Rental properties are the best source of passive income. The value of the property increases over time, and you earn cash from rent regularly.
However, owning one is often impossible for an average person. For starters, it costs a lot of money upfront.
At Arrived, you can be a landlord sans the stress of high costs, problematic tenants, and maintenance.
Find out how much you can earn with Arrived, how to get started, and if it is safe and legit through this review.
What is Arrived?
Arrived, formerly Arrived Homes, is a real estate crowdfunding investment platform. Through Arrived, you can be a co-owner of income-producing rental assets despite low capital.
The minimum investment is only $100. Any U.S. resident over 18 years old can invest in Arrived homes.
Arrived was founded in 2019 by Ryan Frazier, Alejandro Chouza, and Kenny Cason. It has 360+ properties and over $135,000,000 in funding from investors and financial institutions.
Continue reading to learn more about this modern real estate investment platform.
How Does Arrived Work?
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Arrived does all the legwork of a rental business for you. The only thing that you need to do is to invest money.
Using data, Arrived selects properties with the highest investment potential. Then, they look for a local property manager (PM) who helps with daily operations. Once all preparations are done, the rental property is listed on the Arrived website for funding.
There are three types of offerings in Arrived:
- Residential Homes
Properties listed on Homes.com, Move.com, Zillow.com, etc. - Vacation Rentals
Properties listed on Airbnb, VRBO, Booking.com, etc. - Arrived Single Family Residential Fund (SFR Fund)
Non-traded, private REIT launched by Arrived in November 2023. Automatically diversify your investment across various homes through this fund.
At Arrived, you can invest directly in an individual home whether it is for residential or vacation rentals. Each Arrived home is registered as an LLC. So when you buy Arrived shares, you're basically purchasing the LLC shares that own that home.
Legally, that means you have partial ownership of the house.
Earning Money in Arrived
If you invest in individual homes, simply fund a property and wait. You can earn here in two ways:
- Rental Income
You will receive monthly dividends based on the rental earnings. - Property Appreciation
If the value of your property increases after the holding period (usually 5-15 years), you can receive the gains that are pro-rated to your initial investment.
You don't have to spend a lot of time managing rentals in Arrived. However, you have to pay fees in exchange for the convenience.
Invest in Rental Homes with $100+
Browse rental home investments for free. No bank account required
Fees
In general, you have to pay for 3 kinds of fees:[2][3]
| Long-Term Rentals | Vacation Rentals | |
|---|---|---|
| Sourcing Fee (One-Time) | 3.5% of property purchase price | 5% of property purchase price |
| Asset Under Management Fee (Quarterly) | 0.15% of property purchase price | 5% of Gross Revenue |
| Property Management Fee | 8% of gross rental income | 15%-25% (Monthly) |
- Sourcing Fee (One-time)
For costs involved in preparing the property for investment. - Asset Under Management Fee (Quarterly)
To cover the administrative and management costs. - Property Management Fee
For the operational expenses of local property managers.
Other one-time fees investors may receive from property managers include fees for lease-ups, renewals, rehab, & turn support.
How Much Money Can You Make in Arrived?
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According to Arrived, this is the estimated historical annual return range for a diversified portfolio:
| Single-Family Residentials | Vacation Rentals | |
|---|---|---|
| Without Leverage | 6% - 10% | 5.5% - 12% |
| With Leverage | 7% - 12% | 6% - 15% |
| Target Investment Period | 5 - 7 years | 5 - 15 years |
So, how much is that in dollars? Assuming you have $1,000 as an initial investment and a holding period of 7 years, here are the possible returns you can get:
| Annualized Return | Initial Investment | Projected Value (After 7 Years) |
|---|---|---|
| 5.5% | $1,000 | $1,401 |
| 6% | $1,000 | $1,444 |
| 7% | $1,000 | $1,543 |
| 10% | $1,000 | $1,847 |
| 12% | $1,000 | $2,093 |
| 15% | $1,000 | $2,494 |
Remember, these are just estimated returns based on historical data. Since you have the freedom to choose which property to invest in, you can either have multiple overperforming or underperforming ones in the same portfolio.
Some assets have appreciated as much as 136.1% in just over 2 years (over 60% in annual return). At the same time, some have depreciated for as low as -17.80% after a year. At the end of the day, your returns will depend on how well your picks perform.
Unfortunately, you can't take advantage of compounding interest here because you cannot reinvest your dividends in the same house.
If you want to know more about how much you can potentially earn, check the investment strategy returns calculator for each listing on the Arrived website.
Invest in Rental Homes with $100+
Browse rental home investments for free. No bank account required
How to Withdraw Arrived Profits?
Your dividends are directly deposited to your linked bank account monthly. However, you cannot sell your Arrived shares until the end of the holding period which can take up to 5-15 years.
Because you partially own the property through the LLC, only when it is liquidated or sold can you get your money back. Until then, your investment in Arrived is considered illiquid.
Arrived is currently working on a secondary market with SEC that will allow you to sell your ownership, but there's no update yet on when that could be released as of December 2023.
As an alternative, Arrived launched the private REIT Arrived SFR Fund where you can withdraw funds after 6 months. However, you still have to pay a small penalty fee.
Arrived Pros & Cons
Pros:
- Monthly dividends
- Low minimum investment, only $100
- Passive income
- Accepts IRAs
- Backed by notable investors
- Data-driven decision making
- Legal home co-ownership through LLC
- Tax benefits for individual home rentals
Cons:
- Costly fees
- Illiquid investment
- No auto dividend reinvesting yet
- Limited vacation rental offerings
- Unable to sell shares until the property is sold
Invest in Real Estate with $10+
- Only $10 minimum investment
- Get a diversified portfolio of real estate projects across the US
- Open to all investors
Invest in Real Estate with $10
- Short-term real estate investments lasting just 12-18 months
- Open to non-accredited investors
- No investor fees
Start Investing in Real Estate
- Access to private real estate managed by experienced investors
- Earn passive income from dividends
- Open to all investors
How To Get Started
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If you want to start investing in Arrived, simply follow these steps:
- Create an account on their website
Input your personal information and financial goals. - Confirm details for your investment account
To get started with your investment account, fill out the Know-Your-Customer (KYC) and Anti-Money Laundering (AML) questionnaire. You can skip this and get back to it later if you're not sure yet. - Fund your account
Link a valid bank account for deposits and withdrawals. - Invest in homes
Browse their website for properties that are not completely funded yet. These are the ones available for investment.
You can create an account in just 10 minutes, but it might take up to 5 days to verify your account.
Is Arrived Homes Legitimate and Safe?
Yes. Arrived is registered with SEC, backed by notable individuals such as Jeff Bezos, and rated A+ by the Better Business Bureau. Plus, investors have the legal ownership of each house, not Arrived.
Despite starting only in 2019, Arrived has a promising track record. Arguably, being a new player can be seen as a drawback when compared to its established competitors.
For example, its offerings are designed to be long-term investments (from 5 to 15 years) but its oldest listing is only in its 2nd year as of December 2023. So in that sense, some say it's too early to know if Arrived is a good investment or not.
Nonetheless, there are signs that Arrived's assets are well-managed. Most of their vacation rentals receive good feedback. In fact, some units even get the Guest Favorite badge from Airbnb.
As for account security, you can enable the 2-step verification which can help prevent unauthorized access.
Types of Accounts
Arrived currently offers 3 types of accounts: Individual, Entity, and Checkbook IRA.
They only support one account type per email address. If you wish to invest through a self-directed IRA and individual account, you have to create two separate accounts.
Checkbook IRA is a type of self-directed IRA that lets you write checks directly through a single-member LLC to make investments.
If you don't have one yet, Arrived has partnered with Rocket Dollar who can assist in setting up your checkbook IRA account.
Invest in Rental Homes with $100+
Browse rental home investments for free. No bank account required
Customer Support
For questions on account and transaction issues, you can send an email directly to their support team. They also have a chatbot and live chat support on their website. In the official subreddit, you can ask general questions about Arrived and real estate investing.
- Email Support: support@arrived.com
- Live Chat: Monday - Friday (9:00 A.M. to 5:00 P.M. PST)
- Official Subreddit: Their customer representative can reply to your questions in their official subreddit.
How Does It Compare?
Arrived Homes isn't the only company offering pooled real estate investing to everyday people. Let's see how they differ.
Fundrise
Fundrise is a real estate investing platform. The minimum is only $10, making it even more accessible to small investors than Arrived.
Instead of investing in individual single-family homes, Fundrise automatically invests in a wide variety of real estate projects for you across the US. They have everything from residential, commercial, to industrial properties.
It's completely automatic, so you don't have to research and choose projects. This is good if you're not sure what to invest in. There is also an optional Fundrise Pro membership if you are an active investor who wants to customize your portfolio to your preferences.
Fundrise pays quarterly dividends. Plus you'll earn returns when the properties appreciate. Fundrise's historical annualized returns from 2017 to 2021 ranged from around 1.50% - 22.99%,[4] which may be higher than the rates that Arrived can offer for now.
Fundrise has a 1% annual fee for managing your portfolio. And each project has an origination fee usually between 0-2%. This pricing is comparable to Arrived, possibly a little cheaper.
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| Visit Site | Visit Site | |
Invest in Rental Homes with $100+ - | Invest in Real Estate with $10+ - | |
| Annual Fee | ||
| Minimum Deposit | ||
| Phone Support | ||
| Live Chat Support | ||
| Email Support | ||
| Investment Types | Commercial, single family, multi-family, industrial | |
| Accredited Investor Requirements | ||
| Dividends | Monthly rental income dividends | Choose quarterly payouts or auto reinvest |
| Investment Period | 5+ years (with opportunities to liquidate on a quarterly basis) | |
| Visit Site | Visit Site | |
| Terms Apply. | ||
Groundfloor
If you're looking for quick returns, you may like Groundfloor. The real estate projects last only 12 to 18 months.
Groundfloor works a little differently. Instead of owning a piece of a house, you're lending money to borrowers for fix-and-flip housing projects. Each loan has a fixed interest rate and projected term, so you know beforehand what to expect.
The average returns to date so far are 10%.[5] You can pick your own projects, or you can even set up automated investing. Groundfloor will automatically invest in loans for you based on the portfolio profile you set up.
Groundfloor loans are relatively safe because they're backed by the actual property. If the borrower defaults, Groundfloor can claim the property to pay back investors.
The minimum investment per loan is only $10. Plus, there are $0 fees for investors.
| | |
| Visit Site | Visit Site | |
Invest in Rental Homes with $100+ - | Invest in Real Estate with $10 - | |
| Annual Fee | ||
| Minimum Deposit | ||
| Phone Support | ||
| Live Chat Support | ||
| Email Support | ||
| Investment Types | ||
| Accredited Investor Requirements | ||
| Dividends | Monthly rental income dividends | |
| Investment Period | ||
| Visit Site | Visit Site | |
| Terms Apply. | ||
GROUNDFLOOR: Investments carry risk and may lose value. Not an offer or solicitation to purchase securities. Please consult the Offering Circular and related SEC filings before making an investment decision. | ||
Bottom Line
Despite being a new player in the modern real estate investing industry, Arrived has a promising future thanks to its good management of rental properties and backing from sophisticated investors.
If you want the freedom to invest in specific rental properties and don't mind the illiquidity, try Arrived. But if you want a more established platform, Fundrise would be a better option.
Ethically, it is debated whether this type of business model can further contribute to the American affordable housing crisis. But some would say, it is better to have the ownership of these rental properties spread across many individuals instead of just a few wealthy investors and corporations.
Whichever you choose, investing in real estate has long proven to be a sound financial decision, and we can only hope to benefit from more options in the space.
References
- ^ Arrived. How does share redemption for the Fund work?, Retrieved 01/22/24
- ^ Arrived. How does Arrived make money?, Retrieved 01/22/24
- ^ Arrived. What fees do investors pay to property managers?, Retrieved 01/22/24
- ^ Fundrise. Explore client performance over time, Retrieved 01/22/24
- ^ Groundfloor. Groundfloor for investors, Retrieved 01/22/24
Invest in Rental Homes with $100+
Browse rental home investments for free. No bank account required
Invest in Real Estate with $10+
- Only $10 minimum investment
- Get a diversified portfolio of real estate projects across the US
- Open to all investors
Invest in Real Estate with $10
- Short-term real estate investments lasting just 12-18 months
- Open to non-accredited investors
- No investor fees
Jeremy Harshman is a creative assistant at CreditDonkey, a personal finance comparison and reviews website. Write to Jeremy Harshman at jeremy.harshman@creditdonkey.com. Follow us on Twitter and Facebook for our latest posts.
Note: This website is made possible through financial relationships with some of the products and services mentioned on this site. We may receive compensation if you shop through links in our content. You do not have to use our links, but you help support CreditDonkey if you do.
Fundrise, LLC ("Fundrise") compensates CreditDonkey Inc for new leads. CreditDonkey Inc is not an investment client of Fundrise.
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