Ark7 Review 2023
|By: Jeremy Biberdorf||Mar 27, 2023|
In a nutshell: Ark7 is an online platform offering the opportunity to invest in fractional real estate. With some minimums as low as $20, Ark7 makes investing in real estate more accessible.
While fractional real estate investing has been around for at least a decade now, Ark7 is one of the leaders in the industry. But how exactly does it work, and does it have any downsides?
Keep reading for our comprehensive Ark7 review so you can see how it aligns with your investing needs and preferences.
|Sourcing Fee | 3% of property market price (one-time fee)||Property Management Fee | 8-15% of property income||IRA Custodial Fee | $100 charged per property per year (up to $400)|
- Easy-to-navigate site
- Various payment methods
- An extensive array of products
- Free 30-minute call for those investing $10,000+
- Sales are final
- Expensive fees for storage
Ark7 Review 2023 | Is Ark7 Right for Me?
Ark7, like so many fintech companies, was founded in California’s Bay Area. Ex-Google engineer Yizhen Zhao started it along with fellow founders Jim Holt, Ling Yang, and Yujian Weng.
Ark7’s premise is simple, and it’s essentially the same as most other fractional real estate platforms: provide investors with easier access to rental real estate by selling fractional shares of properties.
Ark7 has grown quickly, with more than 20,000 investors holding shares valued at more than $15 million. Should you join with these other Ark7 investors? Keep reading to learn more about Ark7, including how it works and what its top features are.
How Does Ark7 Work?
Ark7 purchases rental properties, either in cash deals or through financing. They then list that property on their platform online, offering the property in a given number of shares. Ark7 usually keeps between 1-10% of the shares themselves.
Like other fractional real estate investment platforms, Ark7 provides investors with both dividends (paid monthly) as well as the possibility for share appreciation.
Ark7 currently has homes in a dozen or so markets, including in states such as California, Texas, Washington, Arizona, and Georgia.
Signing up with Ark7 is a pretty straightforward process, meaning you can get invested quickly.
Ark7 offers various features, some of which help set them apart from other fractional real estate investment platforms. Here are a few of them:
- IRA option – A neat thing about Ark7, and something not offered by all fractional real estate platforms, is the ability to hold your shares in an IRA (Roth or traditional). This means that you won’t be taxed on the rental income you receive by holding your shares. There is, however, a fairly hefty custodial fee (unless your balance is over $100k).
- Income and appreciation – Investing through Ark7 provides you with both passive income (dividends from rental income) as well as the possibility of share appreciation.
- Diverse properties – Ark7 offers a diversified portfolio of properties, including different markets, multi-family, short-term rentals, and much more.
- Ark7 secondary market – The Ark7 secondary market allows you to sell your shares. In theory, this means they are more liquid than some other fractional real estate investment companies. That said, secondary markets may not always be so active, meaning that finding a buyer could potentially be complicated.
With any investment, it’s important to take into account fees. Ultimately, fees diminish your investment returns. Some of them are necessary, while others may be unnecessary and/or exorbitant.
Ark7’s fees run a bit on the high side, and there are three of them. Here’s a quick breakdown:
- Sourcing Fee – This is a one-time fee that is 3% of the property’s market value.
- Property Management Fee – This fee depends on the property, but generally runs between 8% and 15% of the monthly rental income.
- IRA Custodial Fee – If you hold your Ark7 properties in an IRA, there’s a $100 custodial fee per property per year, up to $400. IRAs with more than $100,000 have the fee waived.
Is Ark7 Worth It?
Ark7 is one of many fractional real estate investment platforms. Thanks to companies like these, it’s never been easier to invest in real estate. You don’t need thousands (or even hundreds) of dollars, nor the time or energy for scouting a property, buying it, finding tenants, managing it, etc.
But is Ark7 worth it? That will depend on your own unique needs and preferences. There are many strong competitors out there, such as Fundrise. In any case, Ark7 is a verified company on Trustpilot with a 4.4/5 rating, meaning that it’s by and large a trustworthy and reliable investment platform.
To check out Ark7 for yourself, click here to see how it aligns with what you’re looking for in a fractional real estate investment platform.