This Company Lets Investors Buy Shares Of Rental Properties With A $100 Minimum Investment

The following post was written and/or published as a collaboration between Benzinga’s in-house sponsored content team and a financial partner of Benzinga.

Investing in rental properties can provide excellent long-term returns. They can provide steady cash flow, appreciate in value, and the equity grows each month as the principal balance on the mortgage is paid down.

Rental property investments have two major drawbacks: large capital requirements to purchase a property and the property management headaches. One of the newest players in the real estate crowdfunding industry, Arrived Homes, is eliminating both of these drawbacks.

Arrived Homes allows accredited and non-accredited investors to buy shares of rental properties for only $100. The company finds and acquires profitable residential rental properties, then offers shares of the properties to investors through its online platform.

How The Investment Works: Investors can browse available rental properties on the platform and choose the ones in which they want to invest. They can also reserve shares of properties before they become available for investment. The ability to reserve shares is an important feature since the demand has been high and offerings have been funding quickly.

Arrived Homes’ management team handles the operational headaches involved with rental property management. They take care of finding the right tenants, handle repairs and even take the late-night maintenance requests. Meanwhile, investors collect their share of the cash flow in the form of quarterly dividends and wait for the property to appreciate in value over time.

After the target hold period of five to seven years, Arrived Homes sells the property and distributes the equity to each investor according to the number of shares they own. As long as the property increases in value, the investors can earn a return through the gains from the sale in addition to the dividend payments they’ve received.

Visit the Arrived Homes Investment Platform

Returns On Rental Properties: Rental properties can provide returns to investors in three ways:

• Cash flow from rental income
• Appreciation
• Equity built as the mortgage principal is paid down

The returns earned through appreciation and increased equity are hard to predict since it depends on the real estate market when the properties are sold, but the company is careful to choose properties in markets that have a high potential for appreciation.

As far as cash flow, the quarterly dividends Arrived Homes has paid to investors have resulted in an annual rate of return between 5.21% and 6.42%. Dividends are also likely to increase over time as rental prices continue to rise.

Are Rental Properties a Good Investment? There are many benefits to investing in real estate, but rental properties aren’t right for everyone. One of the most important things to remember is that real estate is typically an illiquid investment.

You can’t simply cash out of your shares at any point if you need access to your funds. Rental properties also come with vacancy risks. While property managers are typically able to fill vacant properties within one to two months, any periods of vacancy will cut into your cash flow for the quarter.

If you’re comfortable committing to a five- to seven-year investment term and can handle occasional dips in cash flow, investing in rental properties is a great way to earn passive income and build equity. And Arrived Homes offers one of the easiest ways to get started.

The preceding post was written and/or published as a collaboration between Benzinga’s in-house sponsored content team and a financial partner of Benzinga. Although the piece is not and should not be construed as editorial content, the sponsored content team works to ensure that any and all information contained within is true and accurate to the best of their knowledge and research. This content is for informational purposes only and not intended to be investing advice.