Backed by Amazon founder Jeff Bezos, the real estate investment platform is the latest fractional ownership company to enter the rapidly growing short-term rental market.
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Arrived Homes, the investment platform that sells fractions of rental homes to investors for as little as $100, has begun rolling out homes that will be rented exclusively as short-term rentals.
With the launch of a four-bedroom, four-bathroom townhouse in Nashville, Tennessee, the fractional real estate investment platform expanded its offerings to investors.
The move, which the company has been planning to roll out for months, makes Arrived the latest fractional ownership platform to pivot to allow customers to invest in the vacation rental market.
Arrived, which made headlines this year for selling multiple homes in a matter of minutes, said it planned to offer its latest rental homes on platforms like Airbnb and Vrbo for stays between one night and 30 days.
“Over the past year, Arrived has helped thousands of Americans gain access to the financial benefits of property ownership for the first time in their lives,” Ryan Frazier, Arrived’s CEO, said in a statement. “We are excited to bring our model to vacation rentals, the fastest growing real estate segment right now.”
The launch follows a $25 million funding round, including from the venture capital firm Bezos Expeditions, which is run by Amazon founder Jeff Bezos. The company has fully funded over 150 properties in 27 markets, worth over $55 million.
Arrived markets itself as a way for small-time investors to diversify their portfolios through fractional real estate investing. The company handles lease-up and property management and investors earn dividends based on the home’s gain in equity over time and on earnings from rent.
Offering short-term rentals gives investors another way to diversify their portfolios.
The company says short-term rentals give a better opportunity to earn higher returns, seasonal cash flow. That also comes with higher operating costs and without the tax advantages and long-term stability of long-term leases, the company says.
New markets for Arrived Homes
- Joshua Tree, California
- Nashville, Tennessee
- Panama City, Florida
- Clearwater, Florida
- Glendale, Arizona
- Scottsdale, Arizona
- Blue Ridge, Georgia
To handle the added costs of running a short-term rental home, Arrived appears to be raising more cash from investors to put into reserves. The reserves on a new vacation home in Blue Ridge, Georgia, is nearly 10 times higher than a home of the same price in Denver.
The company also partnered with property managers and home designers in its newly expanded markets.