Here is an online real estate investing platform that allows investors to purchase fractional shares of vacation rentals to earn passive income. The popularity of extended-luxury stay sites like Airbnb and Vrbo has created a tremendous opportunity for profits in short-term rentals.
Historically, the ability to take advantage of high revenue yield real estate investments like short-term rentals has been largely restricted to accredited investors. The Here platform wants to change that narrative by allowing non-accredited investors opportunities to crowdfund quality short-term housing investments.
Lately it seems like the world of online crowdfunding and real estate investing platforms is getting congested. Where there were once just a few players, now there are dozens. The plus side of all that competition is that the only way to stand out is to offer investors something better or radically different from other platforms. The Here real estate investing platform ticks off both those boxes.
The founders of Here believe that the existing real estate investing model is fundamentally broken. They see a market of declining rental revenue and prohibitively high investment minimums. Here solves the revenue problem by providing offerings in the high-earning, short-term rental sector. It solves the high-investment-minimum issue by making shares available to investors for minimums starting at just $100.
It’s no secret that vacation rentals can generate tremendous revenue for property owners. The global nature of travel and an increasing desire on the part of travelers for a more comfortable experience than hotels offer has combined with vacation rental platforms to create ideal market conditions. However, the high price of real estate in vacation markets and the hassle of managing it scares many investors off.
The Here platform offers investors a chance to purchase shares in properties that are hand selected for their high earning potential as short-term rentals. But the smaller share prices make investing with Here much easier than buying a property outright. The Here platform also provides investors with all the benefits of owning short-term rental housing without the hassle of managing it.
Some of those benefits include:
In addition to these benefits, investors should know that Here has its own skin in the game so to speak. Here holds at least a 1% ownership interest in all the offerings, which means it is, in effect, your business partner, as opposed to a platform that merely posts offerings. It has strong incentive to select quality offerings.
You also get the protection of having your property shares held in a fully insured LLC. This benefit not only offers you an added level of protection if anything should go wrong at the property (e.g., electrical fire, act of God), it may also confer tax benefits to you on the pass-through income you earn from the LLC.
Here is a bit of a newer platform and, as noted above, it also invests its own capital into deals. Considering those two things, it’s understandable that it would have a few less offerings than their competition. The current Here offerings have all reached their funding goal and are no longer accepting investor contributions.
A look under the hood at its most recent offerings reveals some very appealing investment offerings.
The Sunburst offering was a 1,200-square-foot single family home on the shores of Clearwater, Florida. The sunburst could sleep up to six people and was highly rated on Airbnb, where it was booked for months in advance at an average daily rental rate of $227. The Florida location gives this offering strong appeal all year around as both snowbirds from New York and summer vacation travelers will be able to enjoy it.
The property itself has appreciated nearly 27% in value in the past year and benefited tremendously from the population explosion sunbelt states like Florida are experiencing. Investors could buy shares for $1 each as long as they purchased a minimum of 100 shares, which translates to a $100 investment minimum. Considering the deal fundamentals and revenue potential, it’s not hard to see why this offering was so popular with investors.
Another closed offering, Enchantment, also had strong potential investor appeal. This charming 930-square-foot A-Frame house is perched in an ideal location in Tennessee’s picturesque smoky mountains. In spite of the rustic feel, Enchantment was still a short drive away from nearby Gatlinburg, which offers travelers easy access to the Great Smoky Mountains National Park and a full slate of outdoor attractions.
Enchantment is renting for an average of $323 per night and has a 93% occupancy rate for the last 12 months. The average monthly revenue for the same period is just a shade under $8,500. The share price and investment minimums were the same here ($1 per share and 100-share minimum contribution) as the Sunburst.
It’s clear that the revenue returns generated by both offerings would vastly outstrip the returns investors would get from traditional long-term leases. The added bonus of being able to buy in for only $100 really sweetens the pot for investors. Hopefully, the Here will be able to add more offerings as it continues to grow. The rating here is 3 stars, but could easily be 4 or 5 if there were more open offerings
The Here platform has clearly been put together by a team who understands what investors need to feel comfortable with online investing. Specifically, a solid, well-functioning customer service set-up is a must in this kind of endeavor. If investors don’t have confidence that their inquiries will be answered or that their individual needs as investors will be met, they’re not going to commit funds.
Here definitely has a solid customer service set-up. Investor outreach starts on the splash page, where you find a live chatbox icon with an actual person in the lower right hand corner. Most general inquiries can be answered on the platform’s very solid FAQ page, but it is responsive to email inquiries as well. Overall, it’s a successful effort to provide customer service at the level you would expect from an investing platform.
The question of site and data security immediately comes to the forefront when you are talking about an online investment platform. By definition, platforms like this have access to so much sensitive data that you can’t help but be concerned about how well it’s being secured.
The Here platform definitely takes investor security seriously. First, it doesn’t sell customer data to any third parties. This feature alone is a huge relief, because if a “secure” platform sells your data to a third party who is not secure, neither is your data. Second, the platform itself has high-level encryption that provides solid (but not impregnable) defense against hackers and dedicated denial of service (DDOS) attacks.
Bank transfers to fund your account or buy shares in offerings are secured through a third party provider known as Plaid, who has universally respected security measures and anti-fraud measures. Last, users must verify their identity before being able to actually begin trading.
Here does not currently have a mobile app. There is no rating for this section.
When it comes to most online real estate investing platforms, the minimum investment or accreditation requirement conspire to lock a lot of would-be investors out of the club. That’s because many of them are geared towards the experienced investor looking for institutional-grade opportunities.
The Here platform takes the opposite approach. As far as buy-ins go, it doesn’t get too much cheaper than a $100 investment minimum. Here is equally reasonable and transparent on the investor fee front. There is a 1% annual fee that is based on the overall value of the asset. This fee is deducted in quarterly increments of 0.25%.
Each individual asset will have a management fee, but this fee is paid through the property’s monthly revenue. The amount of the management fee is based on how much revenue the property generates. Although this will vary from property to property, most professional management fees range from 25% to 30% of the rents generated by the managed property. All things considered, Here’s low minimums and transparent fee structure are one of its biggest selling points.
Overall, Here provides an excellent user experience. Sign-up is easy, the site loads quickly and most importantly, the information it provides about offerings is substantial. When you click on an offering, you have every data point you need at your fingertips to help you make your decision. The entire platform is simple to navigate and if you had questions about a particular process, it’s more than likely answered in its well-stocked FAQ page.
In the case of the Here platform vs. its competitors, Here does not have a direct competitor (meaning there is no other platform with the same business model), but based on price and ease of access for everyday investors, ArrivedHomes is probably the closest.
Like Here, ArrivedHomes offers investors the chance to earn passive income by crowdfunding real estate deals on single family homes. ArrivedHomes has a minimum share price of $10, which is higher than Here’s ($1 per share) but still very reasonable. Arrived also focuses on single family homes in growing market,
Currently, ArrivedHomes has many more available offerings than the Here platform. However, Here’s focus on short-term rentals means its offerings have significantly higher profit potential.
The Here platform certainly has a lot going for itself. It’s hard to do anything but root for a platform that has a stated goal of making high-yield passive income opportunities available to non-accredited investors. The platform is easy to operate, and the offerings are easy to understand.
The long-term question is how deep Here’s deal pipeline is. If it can increase the number of available offerings and hit the projections in the pro-forma for it offerings, Here could become a real powerhouse.
It’s very obvious that a highly intelligent and experienced team of real estate investors is behind Here. It’s easy to see how Here could be a real player in the online real estate investing and crowdfunding platform scene for a long time to come. The only thing keeping Here from a five-star rating is the lack of offerings. Every other aspect of the platform is top notch.
Short-term rentals are like any other investment. A well-scouted short-term rental in a good area can generate lots of passive income for the property owner. However, short-term rentals require highly attentive management. Short-term rentals turn over tenants frequently, which adds to the operating costs.
There is also a lot of contact with prospective tenants, both on the phone and via email. Lastly, emergencies in short-term rentals (floods, broken pipes, blackouts) can happen after hours. If you really want to make money on short-term rentals, it’s probably best to include the cost of professional management in your budget.
The question of how much you should pay for a short-term rental investment varies significantly with the location you choose to buy it. In most cases, the real estate markets that generate the highest revenue will also have the most expensive property and lots of competition.
For example, if you wanted beachfront property, you might find something for a few hundred thousand on the gulf coast, whereas a house the same size on the Pacific Ocean for $2,000,000. So the amount you “should” pay depends on your budget and how much money you think you could generate renting the property.
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