Investing in Arrived rental homes can deliver returns to investors in two different ways: 1) property value growth & 2) rental income. While we cannot predict future returns for our investors, below is some historic data around property value appreciation and Arrived rental property dividends that may be helpful. It is important to note that past performance may not be indicative of future results.
Property Value Growth:
As an owner of shares in an Arrived property, any potential property value appreciation would result in increased home equity value for the investor.
Home mortgages - which Arrived maintains on its properties - amplify the impact that property value changes have on the equity value.
Any potential increase in home equity value could be realized when the property is sold and the proceeds are distributed. Since Arrived has not sold any properties from its portfolio, we do not have historical data on home equity growth.
Over the last 20 years, single-family homes in the United States have appreciated an average of 3.9% per year. This means that for a property with a 65% mortgage loan, the home equity value increased an average of 4.9% per year. For a home without a mortgage loan, and therefore no added leverage, the home equity value increase would average 2.3% per year. These returns include both transaction & disposition fees and assume the investment is held for 10 years.
Cash from Rental Income:
Arrived investors received quarterly cash dividends from rental payments received from property tenants. The rental income you receive will be proportional to your ownership of the property.
While we cannot predict future returns, historically Arrived rental properties have paid cash dividends from rental income, with annualized yields ranging from 2.0% to 7.9% on long-term rentals and 3.6% to 5.2% on short-term rentals.
You can read our in-depth review of our Q4 2022 Financial Performance to understand more about the historical performance of Arrived properties.
In summary, while Arrived cannot predict future returns, the historical 4.3% - 12.8% combined annual return on investment from investing in rental homes helps illustrate the unique value of owning shares of single-family rental home properties. And now that you can also invest in vacation rentals on Arrived, there is potential for returns to exceed those of long-term rentals. Again, it is important to note that past performance may not be indicative of future results.
Check out these resources to better understand Arrived returns:
Q4 2022 Financial Performance - See how Arrived performed over the latest quarter
Property Share Prices - Our newest feature on valuing your Arrived investment
Arrived's Historical Performance - Review details on how each Arrived property
Additionally, we have a few Arrived Learn articles that dive deep into understanding more about rental home investing returns.