Single-family rental properties have always been one of the most popular asset classes among real estate investors because of the steady demand and lower barriers to entry compared to multifamily and commercial properties.
Those barriers have grown significantly over the past several months as higher home prices and interest rates have brought housing affordability to its lowest level in 30 years.
The investment platform Arrived Homes, backed by Amazon.com Inc founder Jeff Bezos, has given investors another option to invest in this asset class by offering shares of individual rental properties to retail investors.
The company handles all property management responsibilities so investors can collect quarterly distributions from the rental income and profit from any price appreciation when it sells the properties.
Earlier this year, Arrived Homes announced that it would also be offering shares of another type of real estate investment that has grown in popularity because of its strong potential for higher returns – vacation rentals.
Its first batch of vacation rentals is now live on the platform with minimum investments of $100.
This announcement came shortly after Jeff Bezos made his second investment in Arrived Homes through the company’s $25 million Series A round. Perhaps one of Bezos’ most widely talked about venture capital plays was his early investment in Airbnb during the vacation rental platform’s Series B round, which points to the billionaire investor’s continued belief in the short-term rental market.
The first seven vacation rentals on the Arrived Homes platform are collectively valued at approximately $5 million. They are located in some of the most popular vacation destinations across the country, with the highest demand for short-term rentals through sites like Airbnb and VRBO.
The first batch of vacation rental properties includes The Mirage in Joshua Tree, CA, The Oasis in Nashville, TN, The Cardinal in Glendale, AZ, The Ace in Scottsdale, AZ, The Hammock in Clearwater, FL, The Orchard in Blue Ridge, GA and The Pointbreak in Panama City, FL.
The first property, The Oasis, was offered to existing investors on the platform a day early, on September 8, 2022, and was fully funded in less than 30 minutes.
Arrived Homes has partnered with established vacation rental property managers and developers to oversee the homes' design, furnishing, and upkeep.
According to data from AirDNA, vacation rentals are responsible for 130% more revenue than traditional long-term rentals. Airbnb also just reported its strong quarter to date in terms of revenue and bookings.
According to Vacasa’s Vacation Rental Search Report, traffic and searches for vacation rentals more than doubled year over year. By spring 2021, searches were up 235%, and its number of users was up 116%.
Photo: Courtesy of Arrived Homes
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