When looking to diversify your investment portfolio, real estate is one of the best options available, but it isn’t always easy to get started. Finding the right place to invest can be a challenge, sometimes investors get overwhelmed, with many giving up on their real estate ambitions. Luckily, in recent years, companies like Arrived, Landa, and Roots have made real estate investment simple with transparent online platforms that are both easy to use and understand. Each of these platforms has its distinct advantages and disadvantages, which we will be diving into today.

If you’re looking for more flexibility in your investments, Arrived may suit you best as you can purchase fractional investments in residential or vacation homes, or invest in a portfolio of residential properties.

If you’re interested in trading shares of properties, then Landa may be the strongest option for you.

If you’re interested in a residential-focused real estate portfolio with low fees and a fund that has a one-of-its-kind social impact on its renters, Roots is the platform for you.

Below you'll find in-depth details of Roots, Arrived's Single Family Rental Fund, and Landa's platform, highlighting their differences across 5 dimensions: property type, minimums, fees, liquidity, and average returns.

Property Type

Roots

Roots' REIT offers a portfolio of residential rental properties, single-family and small multi-family. Roots has a unique model where the residents of the properties get invested in the fund if they are good renters (pay rent on time, take care of the property, and are good neighbors). This has led to low vacancy, low turn costs, and high returns for its investors, as you’ll see below.

Arrived Homes

Arrived offers three ways to invest: you can purchase a fractional share of a vacation rental, you can purchase a fractional share of a single-family property, or you can invest in the Single Family Residential Fund, which will be the focus of this article.

Landa

Landa is a mobile app investment platform where accredited investors can invest in shares of single-family homes and small, multi-family residential rental properties. Unlike Roots, these are fractional shares and not a portfolio investment. Landa users make money from dividends distributed by the company and through buying and trading their shares.

Minimum Investments, Fees & Liquidity

Roots

Roots allows you to invest with a $100 minimum. Roots has a low fee structure, with only a $5 transaction fee per investment and a $3 transaction fee on any recurring investment. If you need to liquidate your funds before one year, there is a 6% early withdrawal fee. There is no fee after the one year point.

Roots distributes to investors quarterly, providing investors the option to reinvest or cash out their distributions at that point in time. Roots offers the ability to liquidate quarterly as well, $100k or up to 5% of the fund.

Arrived Homes

Investment in Arrived's Single Family Residential Fund has a 0.25% management fee and other potential fees which may include but are not limited to closing costs, offering costs, property renovations, sourcing fees, holding costs, operating expenses, and more. These investments are positioned as longer-term investments with a six-month holding period on withdrawals. For those who are looking to liquidate earlier than 5 years, there is a 1-2% cost associated with doing that.

Landa

With Landa, you can begin investing in their mobile app with a minimum of just $5. Fees for Landa include an acquisition fee of up to 6%, a property management fee of up to 8%, and up to $2 with each depositing or withdrawing transaction.

Investors can trade shares of a property on the Landa platform as long as all of the initial shares of the property have been sold. The liquidity of Landa is based on the supply and demand nature of the shares, which means there is never a guarantee that trading will be available.

When selling shares on Landa, you can set the price, but it doesn’t necessarily mean that someone will buy it.

Performance

All platforms have delivered returns to their investors with Roots generating some great returns.

Roots had an average annual return of 17.17% as of July 10, 2024, and has returned 51.5% from July 1, 2021- July 10, 2024.

Arrived’s average total historical returns for single-family residential properties have ranged between 6-10%.

Because of the way it functions, Landa’s trading returns are tied directly to the individual user. However, Landa reported an average dividend return of 6.3% in Q1 of 2024.

Even though historically all three companies have delivered returns to investors, it’s important to remember that past results do not determine future success. Risks are always present when investing your money, so it’s important to understand what those risks are before making your first investment.

Ready To Get Started? Invest With Roots

Imagine owning real estate where your renters wanted it to succeed as much as you do.

Start investing with as little as $100, and in 5 minutes you can own a piece of the only real estate fund that creates wealth for both its investors and its residents.

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Sources

• Roots - Social Impact
• Roots - Performance
• Arrived - Why are homes held in a Series LLC
• Arrived - How does Arrived make money?
• Arrived - What fees do investors pay to property managers?
• Arrived - Arrived Single Family Residential Fund
• Arrived - What returns can I expect from Arrived properties?
• Arrived - Single Family Residential Fund
• Landa - Business Model
• Landa - Selling My Shares
• Landa - Real Estate Investment
• Landa - Q1 2024 Update

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