If You Invested $1,000 In A Rental Property At The Beginning Of 2022, Here's How Much You'd Have Now

The demand for trading fractional shares has increased significantly as younger investors enter the market and are confronted with popular equities or other assets that trade for more than $1,000 a share.

In the past, a merger and acquisition, a stock split, or a dividend reinvestment were the only means to acquire a fractional share.

Even more scant was the ability to buy shares, or a fraction of physical property – or rental property – until recently.

What happened: Arrived is a Jeff Bezos-backed real estate crowdfunding company that enables you to invest in shares of rental properties for as little as $100.

According to Arrived Homes' founder Ryan Frazier, the company's goal is to “make the wealth-building potential of owning rental homes more accessible.”
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Founded in 2019, Arrived has already funded over $64 million worth of property value — it pays out investors on a quarterly basis, both in property value growth and rental income.

So, how much would a $1,000 investment be worth if you purchased $1,000 worth of shares at the beginning of 2022?

Well, we have to explain.

Why it matters: On one end, as a shareholder in an Arrived property, any prospective gain in property value would raise the investor's home equity value, which might be realized when the property is sold and the revenues are dispersed.

Single-family homes in the United States have increased in value on average by 3.9% annually during the past 20 years. This indicates that the home equity value increased by an average of 4.9% every year for a property with a 65% mortgage loan.

On the other hand, Arrived investors receive cash returns in the form of quarterly property rental payments from tenants. Your share of the property's rental income will be based on your ownership stake.

Historically, Arrived rental properties have paid cash dividends from rental income, translating to 2.4% to 7.9% annual returns on investment.

That said, Arrived has historically paid 4.7% to 12.8% combined annual return on investment from investing in rental homes.

So, a $1,000 investment in Arrived Homes at the beginning of 2022 would likely be worth between $1,047 and $1,128.

To read about the latest developments in the industry, check out Benzinga's real estate home page.