3 ms·

How is this better than just renting and also putting some money into a reit each month? Edit: I suppose one reason would be if you want to rent, but you like

by s17n 7y ago

How is this better than just renting and also putting some money into a reit each month? Edit: I suppose one reason would be if you want to rent, but you like a house that's not on the rental market. Any others?

lern_too_spel 7y ago
No dividends to tax as ordinary income? I'm curious how all the taxes work out and whether this counts as rent for tax purposes.
asdfasgasdgasdg 7y ago
There are other startups in this space. I am not sure that it is better than renting. For example, one risk that seems under-appreciated is the possibility of Arrived (or similar startup) going bankrupt. In a general market downturn, it is possible that Arrived would become insolvent. In such a scenario, you are their creditor. That means you will lose some or all of your investment, and probably your home.
- Animats 7y ago
  That's a big question. As in "who really owns the property" and "is this a a real investment fund?" They filed with the SEC.[1] But just a no-info Form D. If this was legit, I'd expect it to be set up as a Real Estate Investment Trust. The REIT would own the properties, borrow at bulk rates, tenants buy shares in the REIT, and the company behind the web site is the fund manager. That way, if the management company goes bust, the tenants still have their equity. [1] https://sec.report/CIK/0001780774 https://sec.report/CIK/0001780774
xivzgrev 7y ago
Lots of products solve an emotional need. Here you have people feeling angsty they aren’t buying when they keep hearing “home prices are increasing!!”, but they can’t buy today. So here’s a company that says “here rent with us and we will apply some amount toward a home purchase” Also remember that a lot of people DONT consistently invest / save. So a service that invests 7% of their rent for them seems like a good deal, even if the rent is say 10%-20% higher than market
topkai22 7y ago
That’s a pretty large one- in my area (small city suburbs) there are very few good SFHs on the rental market compared to the purchase market. It's also amazing to sort of tricks people do to force themselves to save money, having it part of a bill you have to pay seems to help. Heck, a 30 year mortgage mostly works this way, you mostly part interest every month, but still stock away a little principle
s17n 7y ago
To reply to my own question: I suppose it's also possible that the process of each investor choosing a property they want to live in for the fund to buy, and then occupying the house that they also have some equity stake in, will result in higher quality properties and better returns than a traditional reit.

by s17n 7y ago

lern_too_spel 7y ago

No dividends to tax as ordinary income? I'm curious how all the taxes work out and whether this counts as rent for tax purposes.

asdfasgasdgasdg 7y ago

There are other startups in this space. I am not sure that it is better than renting. For example, one risk that seems under-appreciated is the possibility of Arrived (or similar startup) going bankrupt. In a general market downturn, it is possible that Arrived would become insolvent. In such a scenario, you are their creditor. That means you will lose some or all of your investment, and probably your home.

Animats 7y ago
That's a big question. As in "who really owns the property" and "is this a a real investment fund?" They filed with the SEC.[1] But just a no-info Form D. If this was legit, I'd expect it to be set up as a Real Estate Investment Trust. The REIT would own the properties, borrow at bulk rates, tenants buy shares in the REIT, and the company behind the web site is the fund manager. That way, if the management company goes bust, the tenants still have their equity. [1] https://sec.report/CIK/0001780774 https://sec.report/CIK/0001780774

xivzgrev 7y ago

Lots of products solve an emotional need. Here you have people feeling angsty they aren’t buying when they keep hearing “home prices are increasing!!”, but they can’t buy today. So here’s a company that says “here rent with us and we will apply some amount toward a home purchase” Also remember that a lot of people DONT consistently invest / save. So a service that invests 7% of their rent for them seems like a good deal, even if the rent is say 10%-20% higher than market

topkai22 7y ago

That’s a pretty large one- in my area (small city suburbs) there are very few good SFHs on the rental market compared to the purchase market. It's also amazing to sort of tricks people do to force themselves to save money, having it part of a bill you have to pay seems to help. Heck, a 30 year mortgage mostly works this way, you mostly part interest every month, but still stock away a little principle

s17n 7y ago

To reply to my own question: I suppose it's also possible that the process of each investor choosing a property they want to live in for the fund to buy, and then occupying the house that they also have some equity stake in, will result in higher quality properties and better returns than a traditional reit.