When it comes to real estate, the popular targets for investments are commercial and multifamily residential properties, as they can offer much higher returns. However, single-family homes can be a reliable investment as well.
A new platform, Arrived, is getting attention. It offers an easy way to invest in single-family homes.
How to invest in single-family homes
REITs (real estate investment trusts) are among the best ways to invest in single-family homes. Many of the top REITS in the U.S. invest in both single and multifamily homes, but some specialize in single-family homes.
Invitation Homes (INVH) is the largest single-family REIT in the U.S., and owns the most single-family rentals in the country. The company owns over 80,000 single-family properties in 16 different markets.
In early March, Invitation Homes formed a new joint venture with Rockpoint, a real estate private equity firm, to collectively purchase homes in premium locations. Rockpoint is committing $250 million to the joint venture, and Invitation is offering $50 million. The collaborated parties want to focus on buying and renovating single-family homes.
American Homes 4 Rent (AMH)
American Homes 4 Rent is another leading investor in single-family properties, owning over 50,000 in at least 22 different states. The company offers its homes for rent on its online marketplace, where users can apply to lease homes. Those who rent from the company can make rent payments, submit service requests, and renew their leases on the online platform.
In Jan. 2022, AMH had an underwritten public offering, which is when a company offers its common stock to one or more underwriters. The single-family home owner offered 20 million Class A common shares for proceeds of approximately $783 million, which will be used to repay debt and acquire and renovate single-family homes.
Arrived is a new single-family home investment platform backed by Jeff Bezos
Buying shares of single-family homes is another way to be invested into the market, and Arrived allows you to do that. The Seattle-based company claims it's different from other investment platforms, in that it's fully approved by the SEC to offer shares of individual properties. The minimum investment amount for the platform is $100, and it allows investors to to earn passive income, while Arrived takes care of the operational expenses.
The platform currently has over 100 homes on its online marketplace, and it also offers the opportunity for people to sell their single-family homes to Arrived. The company is backed by well-known entities such as Time Ventures, Uber CEO Dara Khosrowshahi, former Zillow CEO Spencer Rascoff, and Jeff Bezos’s personal investment firm, Bezos Expeditions. Arrived announced on May 17 that it raised $25 million in a Series A funding round.