The Arrived Single Family Residential Fund operates as a private REIT and shares many benefits with traditional REITs (such as favorable tax treatment). However, it was designed to improve upon traditional REITs in a few key ways.
The first key difference is that the Arrived Single Family Residential Fund was designed to be a true financial representation of real estate assets. While public REITs often have share price fluctuations caused by non-real estate prices, such as various economic indicators, interest rates, and market sentiment, private REITs like the Arrived SFR Fund can more closely follow the underlying real estate asset values.
The second key difference is that the Arrived SFR fund offers additional transparency into the fund assets. While traditional public REITs are often opaque, the Arrived SFR fund is designed to offer added visibility into every property and market included in the fund. Each property in the fund is showcased along with its address, photographs, and other key features.
The third key difference is the Arrived Fund’s market coverage and expansion strategy: The Arrived Single Family Residential Fund leverages Arrived’s proprietary operation model. Since this model doesn’t require scale, the Fund can quickly diversify into new markets. This includes the more than 55 markets Arrived currently operates in and emerging markets. Without the need to scale, Arrived can also purchase single family residential homes in secondary and tertiary markets that may not fit a larger public REIT portfolio, diversifying the Fund even further.
The last key difference is the Arrived Fund's convenient purchase experience: The Arrived Single Family Residential Fund leverages our modern investing platform to provide investors with real estate investing education, transparency of investment assets, post-purchase performance reporting, and consistent monthly dividend payments. Additionally, by combining the Arrived Single Family Residential Fund with individual properties, investors can build a highly tailored portfolio to match their investment goals.
In terms of similarities, the Arrived Single Family Residential Fund and public REITs carry tax benefits as they must distribute at least 90% of their taxable income to shareholders annually, qualifying for pass-through taxation and avoiding corporate income tax at the entity level. Arrived individual single family residential property offerings also qualify as REITs, offering the same tax benefits.
Read more about the differences in our blog article here.