The real estate investment platform Arrived Homes, backed by Amazon.com Inc. (NASDAQ: AMZN) founder Jeff Bezos, has launched its largest batch of new offerings with a total of 14 new single-family rental properties. Seven of the 14 rental homes hit the platform last week on July 13, with the remaining seven being available as of today. So far, five of the properties have been fully funded with a total value of about $1.4 million.
The rental property investment platform allows individual investors to purchase shares of the single-family properties with investments ranging from $100 to $10,000 per property.
Arrived Homes caught the attention of several high-profile investors last year. Jeff Bezos invested in the company’s $37 million seed round last June through Bezos Expeditions and recently made a second investment during the company’s $25 million Series A round.
The platform has experienced rapid growth since its launch last year, which is largely due to Arrived being one of the few real estate investment platforms available to non-accredited investors. The company funded 51 homes on its platform during the last eight months of 2021, with approximately $18.5 million in property value. So far in 2022, Arrived Homes has already funded over $30 million worth of rental properties.
The newest batch of properties has a total value of approximately $7 million. The properties are located in several high-growth markets, including Atlanta, Nashville, upstate South Carolina, and Northwest Arkansas.
How The Platform Works
Arrived Homes finds and acquires single-family rental properties, then offers fractional ownership to investors through its online platform with a minimum investment of $100. Investors can browse available properties and invest in whichever ones they choose.
The company handles the property management responsibilities while investors collect rental income and wait for the property to appreciate in value over time.
After a target hold period of five to seven years, the property is sold and Arrived Homes distributes the equity to each investor according to the number of shares they own. Assuming the property increases in value, the investors share in the profits from the sale.
Single-Family Rental Market
Investors have a growing appetite for single-family homes, which is no surprise considering that the average rent in the U.S. has increased 16.4% in the past 12 months and as high as 32% in cities like Miami over the same period, according to data from Housing Tides.
While the housing market is beginning to cool down in certain areas, homeownership is becoming even less affordable as higher interest rates are adding to the overall cost of buying a home. This is likely to continue adding strain to the supply of rental units, resulting in further rental rate increases over the next several years.
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Photo: Courtesy of Arrived Homes
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