Welcome to Arrived’s Q2 2023 review! Let’s review the occupancy, dividends, and appreciation of the 250 Arrived properties operating during Q2 2023.
In Q2 2023, investors earned more than $790k in dividend income, an increase of approximately $190k from Q1 2023. In total, 250 properties paid out dividends with annualized yields ranging from 2.0% to 6.9% on single-family residential properties and 2.0% to 10.1% on vacation rentals.
*Calculated by dividing the latest dividend for a single share this quarter by the $10 initial offering price and multiplying the result by 4, the number of quarters in a year.
Arrived closed Q2 2023 with a stabilized occupancy rate of 93.5% for the 220 single-family residential properties in operation during the quarter – this was helped by 51 leases signed in Q2. It’s also worth noting that the average term on these 51 leases was 23 months, and 88.2% leased above our forecasted rent.
*Investors typically purchase a property shortly after Arrived identifies and acquires the home. From the IPO date, properties go through an improvement process, where our team will do value-add fixes and add features like fences. For that reason, properties are typically vacant for at least a few weeks after IPO.
Dividends earned can vary by investment. In Q2 2023, single-family residential properties earned between 2.0% and 6.9%, with a 4.19% average. Vacation rentals averaged between 2.0 and 10.1%, with a 4.31% average.
You can view the dividends for each property on our Historical Returns page.
The annualized dividend for each property is calculated by taking the Q2 dividend and extrapolating it out for an entire year.
Building a diversified portfolio across markets is a great strategy to get exposure to different real estate markets and earn passive income.
Below is a visualization of the current annualized dividend rate calculated as a function of the initial $10 share price across all of our properties mapped over the number of months owned.
Share Prices and the Current Market
Share Prices are a way to see the value of your investment change over time, much like you would track a portfolio of stocks.
In Q2 2023, we updated the Share Prices for 185 properties, including 156 properties receiving an updated share price from 3 months ago and 29 properties receiving their first share price since their IPO 6-8 months ago.
For the 156 properties receiving an updated share price, we found that 90% of properties increased, while 10% decreased in share value this quarter. That resulted in an average share price increase of 2.4% in Q2.
For the 29 properties receiving a share price for the first time, the average increase was 0.75%. However, we found that 19 out of 29 properties were valued below their initial offering amount. The reason these two cohorts show different appreciation figures is that for the former group (the 156 properties), we are only measuring a 3-month change, while for the latter group (29 properties), we are measuring the change from IPO (which ranges between 6-8 months).
We see some interesting insights if we compare total share prices through market shifts over the last several quarters. After 3 quarters of appreciation in 2022, we saw the broader market changes affect the value of homes in Arrived’s portfolio, which led to an average -4% decrease in quarter-over-quarter appreciation in Q4 2022.
In Q1 2023, we found 65% of properties increased in share value, while 35% decreased for the 121 properties that received an updated share price. That resulted in an average share price increase of 1.8% in Q1. In Q2 2023, share prices increased for 90% of properties. Resulting in an average share price increase of 2.4%.
Looking at the 29 properties receiving a share price for the first time, we found share price changes ranged between -13.6% to 36.8%, with an average of 0.75%. Notably, three properties — The Falcon, The Eagle, and The Goose — drove higher initial Share Prices due to existing appreciation before funding.
While we are starting to see stronger signs of appreciation as we close out Q2 2023, these positive signals serve as a reminder that, while share prices react to the current market in the short term, real estate performs best as a long-term investment, all while investors continue earning dividends through rental income.
Below is the average Q2 Share Price categorized by the number of months owned for each property.
*Share Prices for single-family residential properties are updated six months after the initial property funding, using estimates provided by third-party sources. Vacation rental properties are updated 12+ months after initial funding and every quarter thereafter.
Vacation Rental Performance
As of the end of Q2 2023, we have 30 bookable short-term rental properties, 7 of which became bookable during the quarter. Here are some highlights from the quarter for this asset class:
- 929 nights stayed by guests
- Owner’s revenue of $299,000
- Average daily rate: $322
- 129 ratings were received during the quarter, with an average rating of 4.83
- Highest occupancy: 97% for The Palm
Q2 Vacation Rental Occupancy and Owner’s Revenue
The table below displays the total Owner’s Revenue realized in Q2, with occupancy data for our bookable vacation rentals. These properties have shown a strong return on investment overall. However, vacation rentals can take up to six months to stabilize before reaching their full earning potential. During this time, there will be fluctuations in occupancy rates and revenue as vacation rentals gain exposure on booking sites and build a reputation among travelers.
* Owner’s Revenue is calculated by subtracting the booking-related costs, such as host fees, cleaning fees, taxes, etc., from the Gross Revenue. Occupancy % is calculated based on the number of days the property was available to book in Q2.
Closing Thoughts By Arrived VP of Investments, Cameron Wu
With the second quarter behind us, we continue to be humbled by the passion and enthusiasm of our investor community. We crossed $95 million in total equity funded with more than 20,000 investors in Arrived properties. To date, Arrived has generated more than $2.7M in quarterly dividends for investors.
Arrived added $25 million worth of homes to investors’ portfolios with 58 single-family residential homes and 13 vacation rentals. Our asset selection continues to be validated by incredible leasing activity.
With the launch of our much-anticipated mobile iOS app, Arrived continues to cement its place as one of the most innovative companies in real estate. In May, GeekWire awarded Arrived the Startup of the Year, a validation of our commitment to the investor experience.
As we gear up for Q3, we look forward to the opportunity to serve you on your real estate journey. Thank you for letting us be part of your ongoing success story.