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Arrived Homes: The Koi Offering
By Alex Sweet,
The fractional real estate platform Arrived Homes has announced new offerings for vacation rental homes available beginning March 13.
Fractional real estate makes it feasible for individual investors who don’t have the funds to buy entire properties to add real estate to their portfolios. Investing in real estate typically has a high financial barrier, making it difficult for average investors to take part. But with fractional investment, investors can own real estate and receive passive income without the hassle of property management and playing the role of landlord.
With returns coming from rents received and potential capital gains when the property sells, fractional real estate continues to be an attractive asset class for investors looking to diversify their portfolios.
According to data acquired from Zillow and AirDNA, vacation rentals generate up to 160% more revenue on average than traditional long-term rental properties.
Beginning March 13, prospective investors can invest in The Koi, a large vacation rental in Scottsdale, Arizona. The house has four bedrooms and over 2,300 square feet to host large families or groups traveling to the popular tourist region. The backyard is an oasis with palm trees, a swimming pool, a gazebo-covered hot tub and a fully stocked koi pond. The home’s interior offers guests a game room, two living areas, a brick fireplace and a large dining area.
Tourism drives much of the economic activity in the surrounding area. According to Scottsdale.gov, Scottsdale received 5.3 million overnight visitors and 4.4 million day trippers during 2021. Nearby Phoenix attracts over 20 million overnight visitors per year, adding to the millions who visit the area and need a place to stay while in town. The area is known for its outdoor recreation, beautiful weather, high-end shopping, bars and dining.
The Koi will be managed by Old Town Rental, which manages over 60 properties in the Phoenix metro area. A management expert in the area, Old Town Rental has achieved Premier Partner status with Airbnb and VRBO, which will be marketing the house for rent.
Minimum investment: $100
Target internal rate of return (IRR): 9.4% (based on historical returns)
Average daily rate: $417
Average monthly revenue: $8,826
Average monthly occupancy rate: 59%
Hold period: five to 15 years
The investment window for The Koi opened on the Arrived Homes platform on March 13.