Many of the world’s largest investment firms have launched new funds over the past couple of years aimed at acquiring or building single-family homes to use as rentals. This comes as no surprise considering that the increased cost of buying a home has forced many Americans into being tenants instead of homeowners.
Arrived, a young real estate company backed by Amazon.com Inc. founder Jeff Bezos, has just announced its entry into the single-family rental fund space. Arrived currently operates a fractional real estate investing platform that has attracted nearly half a million retail investors since its launch in 2021. The platform allows these investors to purchase shares of single-family rental properties with as little as $100.
To date, investors on the platform have funded more than 388 homes with a total value of over $122 million. Properties are often fully funded within hours of going live, which has resulted in Arrived limiting the maximum investment on many of its offerings.
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The new Arrived Single Family Residential Fund aims to simplify capital allocation by allowing users to invest more at one time and invest on their own schedule without having to wait for individual properties to launch.
Investors in the new fund will be diversified across several properties in multiple real estate markets. Arrived also intends to give investors an option to redeem or liquidate their shares on a quarterly basis after the first six months.
Arrived CEO Ryan Frazier expressed optimism about the single-family home market, citing its historically robust returns and lower volatility compared to the stock market. He also noted the persistent demand for housing, outpacing the supply of new homes over the last decade.
In the third quarter of 2023, investors on the platform earned approximately $890,000 in dividend income, marking an increase from the previous quarter. Over the past year, the platform has disbursed over $2.8 million in dividends to its investors.
Arrived was the first SEC-qualified real estate investing platform to allow virtually anyone to buy shares in single-family rental properties. This innovative approach to real estate investing has attracted significant attention and backing from high-profile investors and tech entrepreneurs, including Jeff Bezos, Marc Benioff, Spencer Rascoff, and Dara Khosrowshahi, who all invested in the company’s seed round. Bezos’s continued support was evident with his second investment during Arrived’s $25 million Series A funding round in 2022.
To provide more insights into the new fund, Ryan Frazier and Cameron Wu, VP of Investments at Arrived, will be hosting a detailed webinar at 1:00 PM EST on November 29.
TORONTO – One expert predicts Ottawa‘s changes to mortgage rules will help spur demand among potential homebuyers but says policies aimed at driving new supply are needed to address the “core issues” facing the market.
The federal government’s changes, set to come into force mid-December, include a higher price cap for insured mortgages to allow more people to qualify for a mortgage with less than a 20 per cent down payment.
The government will also expand its 30-year mortgage amortization to include first-time homebuyers buying any type of home, as well as anybody buying a newly built home.
CIBC Capital Markets deputy chief economist Benjamin Tal calls it a “significant” move likely to accelerate the recovery of the housing market, a process already underway as interest rates have begun to fall.
However, he says in a note that policymakers should aim to “prevent that from becoming too much of a good thing” through policies geared toward the supply side.
Tal says the main issue is the lack of supply available to respond to Canada’s rapidly increasing population, particularly in major cities.
This report by The Canadian Press was first published Sept. 17,2024.
OTTAWA – The Canadian Real Estate Association says the number of homes sold in August fell compared with a year ago as the market remained largely stuck in a holding pattern despite borrowing costs beginning to come down.
The association says the number of homes sold in August fell 2.1 per cent compared with the same month last year.
On a seasonally adjusted month-over-month basis, national home sales edged up 1.3 per cent from July.
CREA senior economist Shaun Cathcart says that with forecasts of lower interest rates throughout the rest of this year and into 2025, “it makes sense that prospective buyers might continue to hold off for improved affordability, especially since prices are still well behaved in most of the country.”
The national average sale price for August amounted to $649,100, a 0.1 per cent increase compared with a year earlier.
The number of newly listed properties was up 1.1 per cent month-over-month.
This report by The Canadian Press was first published Sept. 16, 2024.
MONTREAL – Two Quebec real estate brokers are facing fines and years-long suspensions for submitting bogus offers on homes to drive up prices during the COVID-19 pandemic.
Christine Girouard has been suspended for 14 years and her business partner, Jonathan Dauphinais-Fortin, has been suspended for nine years after Quebec’s authority of real estate brokerage found they used fake bids to get buyers to raise their offers.
Girouard is a well-known broker who previously starred on a Quebec reality show that follows top real estate agents in the province.
She is facing a fine of $50,000, while Dauphinais-Fortin has been fined $10,000.
The two brokers were suspended in May 2023 after La Presse published an article about their practices.
One buyer ended up paying $40,000 more than his initial offer in 2022 after Girouard and Dauphinais-Fortin concocted a second bid on the house he wanted to buy.
This report by The Canadian Press was first published Sept. 11, 2024.
