At this point, you’ve likely heard someone say that you can add real estate to your investment portfolio without going full landlord. That’s the power of real estate crowdfunding. Investors now have multiple options and you probably want to know which platform is best. Our Arrived Homes vs. Fundrise comparison can help you see which real estate investing platform might be right for you!
Arrived Homes vs. Fundrise
As more people get interested in real estate investing, more platforms are popping up. For this review, we put two powerhouse platforms to the test to see which comes out on top in our Arrived Homes vs. Fundrise showdown.
What is Arrived Homes?
If you follow us on social media, you’ve likely seen us slowly growing our real estate investment portfolio! One way we are doing this hassle-free is with Arrived Homes.
Arrived Homes is on a mission to “empower the world to build wealth through modern real estate investing”. This start-up company knows the benefits of real estate investing. They also understand people’s common reservations about it.
By eliminating a lot of the real estate headaches (you’ll never have to repair a leaky toilet!) and allowing investors to get started with a low $100 investment minimum, Arrived Homes makes real estate investing something anyone can do.
By pooling your money into select Arrived Homes properties with other investors, you each purchase shares of those properties. Then, you get to collect passive income thanks to regular rent payments. If the homes appreciate in value, you get a slice of that appreciation as well.
Learn more about how Arrived Homes can help you invest in real estate without becoming a landlord in our Arrived Homes review.
Arrived Homes Features and Benefits
It’s no secret that Arrived Homes has some big fans. Famously backed by Jeff Bezos, this investing platform is making waves in the real estate world. Features like low minimums and access to top markets make Arrived Homes stand out.
Let's explore some of the best features and benefits of Arrived Homes to see if this platform might match your investment goals.
Low investment minimums
If you’re looking to grow your wealth, you need to invest. Many people have a hard time starting their investment journeys. That’s because investment minimums often require more cash upfront than people have at least when they are first getting their finances in order.
This is one of the many ways Arrived Homes shines. Forget saving up for big down payments and working to find the best mortgage rates. You can get started investing in real estate with only $100. That’s the power of crowdfunding.
Arrived Homes allows investors to purchase shares of each investment property at a range of prices. $100 is the investment minimum. On the other hand, if you have more capital to start with, you can invest up to 10% of the equity in the property. This flexibility means that you can purchase multiple shares of a single property or spread your investment money out across multiple rentals.
Top performing markets
Part of what makes real estate investing profitable is knowing which real estate markets to invest in. Don’t know the difference between Toledo and Tallahassee when it comes to home value? No problem. Arrived Homes takes the guesswork out of looking for properties.
Arrived Homes properties are part of top-performing markets. That’s why you often see multiple properties available in the same or similar neighborhoods. Arrived combs through market research and employs local teams to know which markets should be lucrative investments. You can even filter using market options like “Best Schools” when you explore Arrived Homes properties you might want to invest in.
When Arrived Homes first joined the real estate crowdfunding, it only offered the option to invest in long-term rental options. Now, though, Arrived Homes offers investors multiple rental options.
You can still invest in long-term rental properties. These properties are ideal for investors who are looking for consistent year-round cash flow. Since long-term properties are leased for one to two years at a time to the same tenants, there’s no need to worry about fluctuating incomes.
Additionally, you can add short-term rental properties to your portfolio now.
Vacation rentals have the potential to help investors earn more income and take advantage of the booming short-term rental market. Investors sometimes opt to invest in multiple properties in different locations, staggering the peak seasons and off seasons.
For instance, you might invest in one property that has a booming summer business and another that gets a lot of snowbirds in the winter. This way, you can create a more consistent income stream.
Traditional real estate investing requires people to be knowledgeable about so many things. Changing markets, tax benefits, and more. Then you have to decide if you’re going to rent, do a live-in flip, house hack, or something else. In short, you need to do a lot of legwork, especially when you’re first getting started.
Arrives Homes does all that legwork for you. In addition to carefully selecting properties in top markets, they vet and screen tenants, seeking out the most reliable renters available thanks to their own tools and other third-party resources.
They also use professional-grade technology that they either purchase or created themselves. These resources comb through market data, analyze property specs, identify optimum price ranges, and optimize operations and maintenance.
No never-ending to-do lists
One of the biggest reasons people bow out of real estate is that it can become really time-consuming. Arrived Homes comes with zero operational responsibility for you. That means you’re not dealing with distressed tenants if there is water in the basement or if an appliance is on the fritz.
A lesser-known (and huge!) benefit to Arrived Homes is that they also allow renters to invest in the property. By giving renters some skin in the game, they are motivated to take better care of the property. Anyone who has ever heard any landlord horror stories knows what a win this is!
Arrived Homes makes it simple to get started with investing and the process of staying invested is totally painless–and maintenance-free!
Consistent passive income
There are no guarantees in investing. But Arrived Homes is designed to generally provide consistent passive income. You receive your payments in quarterly installments.
Plus, Arrived Homes allows you to forecast what your returns might be. That’s a helpful barometer for gauging how much you want to invest in Arrived Homes as compared to your overall investment portfolio.
What is Fundrise?
Fundrise is another platform aimed at making real estate investing something that anyone can do! Rather than choosing individual properties like you do with Arrived Homes, Fundrise offers real estate investment trusts or eREITs.
After you create a Fundrise account, you choose a strategy to fit your investing goals and timeline. Once you identify a portfolio strategy, Fundrise selects eREITs or other eFunds that align with your strategy.
Fundrise continually monitors your portfolio to make sure that your investments stay in alignment with your goals. They also look for new investment options to add to your portfolio over time. The purpose is to create and maintain a diverse real estate investment portfolio to help you hit your financial goals.
Fundrise Features and Benefits
With over $5 billion in assets as of 2021, Fundrise is the choice of many when it comes to real estate investing. Let’s dive into some of the standout features and benefits of Fundrise that help make the platform so popular.
Rely on their expertise
The learning curve for real estate investing can be steep. Especially if you have no experience flipping properties or working as a landlord. One of the biggest benefits to investing in real estate with Fundrise is that you don’t actually need to know much about real estate.
Instead, you get to focus on your goals and your future. Fundrise works to put together investment options that align with your portfolio strategy. Then, they take it from there.
Low investment requirements
Fundrise lets you get started investing with as little as $10. There are investment tiers depending on how much you have invested in your portfolio.
The Fundrise account levels are:
These tiers are based on the total principal dollar amount that you have invested in your portfolio. As you invest more money, you unlock different features and benefits, with the Core level and beyond enjoying the most perks.
All levels come with auto-invest options and some level of investor goal-setting. Plus, you can also earn bonuses with each qualifying Fundrise invitation you send.
Automatic investing and balancing
Many investors benefit from taking a “set it and forget it” approach to investing. By not checking your account weekly or daily, you can ride out market fluctuations with a lot less stress.
With Fundrise, every account level allows you to schedule recurring investments automatically. The allocations match your plan, and this is how Fundrise exposes your portfolio to different funds over time.
More liquid than traditional real estate
Fundrise says that investors should use the platform for medium and long-term investment goals. Ideally, this is money you plan to invest for at least five years. Even so, your Fundrise investments can be more liquid than traditional real estate.
User-friendly platform and intuitive mobile app
Keeping investment minimums low isn’t the only way that Fundrise makes investing more accessible. By designing a user-friendly platform and a solid mobile app as a companion, you can quickly and easily navigate your investment portfolio.
The Fundrise app is available in the Apple App Store and the Google Play Store with a 4.8 and 4.1-star rating respectively. The app is surprisingly robust and very intuitive.
While you certainly don’t have to check in with your Fundrise account often–especially if you have auto-invest set up!–you can keep many account features at your fingertips with the app. In addition to viewing your investment dashboard, you can add funds and review your transaction history. You can also review active projects, look at eREIT breakdowns, and research project updates.
If consistent returns are something you’re looking for as an investor, Fundrise is a compelling option. Fundrise pays quarterly dividends. Investors should see dividends in April, July, October and January since Fundrise distributes dividends the month following the quarter-end.
You also want to note that Fundrise does not promise a guaranteed dividend to investors and that dividends can vary throughout the year.
Arrived Homes vs. Fundrise: The Ultimate Showdown
Now that you know how both Arrived Homes and Fundrise work, it’s time to put them head to head to see which platform is best. Read on for our Arrived Homes vs. Fundrise showdown.
Keep things truly passive (Winner: Fundrise)
Fundrise is probably inches ahead in the race for income that is the most passive. That’s because Fundrise allows investors to set up automatic investing. All you have to do is select a portfolio strategy and let Fundrise do all the heavy lifting.
Fundrise will make regular investments based on the contribution amount and time frame you set up. Additionally, they keep an eye on your overall portfolio, ensuring that your investments align with your investment strategy. That’s about as passive as it gets when it comes to investing!
Learn more about real estate (Winner: Arrived Homes)
Are you looking to learn more about real estate?
Then, Arrived Homes is the platform for you. They do a lot of market analysis and research that you would have to do yourself if you were going to buy a rental property. While this fast-tracks the investment process, you still get to maintain more of a hands-on approach when you browse investment options.
Arrived Homes properties are broken into subcategories. These five subcategories include:
- Newly Built
- Great Schools
- Appreciation Focused
You can also explore specific listings to see photos and read a property description. Listings also include location, tenant status, first dividend date and yield. Additionally, you can access the Zillow Home information for the property as well to see pricing trends and other market details.
Get started with less (Winner: Fundrise)
When it comes to low investment minimums, Arrived Homes and Fundrise both shine. But if we have to declare a winner in the Arrived Homes vs. Fundrise showdown in terms of getting started with less, Fundrise is the victor.
Arrived Homes allows you to purchase shares of their properties for as little as $100. Fundrise will start building your real estate investment portfolio with as little as ten bucks!
Dodge high fees (Winner: TIE!)
If you’re really fee-averse, there may not be a clear winner when it comes to Arrived Homes vs. Fundrise. Both platforms charge a 1% fee each year.
Arrived Homes charges 1% as their annual management fee. Depending on the properties you invest in, you will also pay a sourcing fee. A property management cost is also baked into investors’ returns.
Fundrise also changes a 1% annual fee. This fee accounts for both the annual investment advisory fee and the management fee.
Maintain liquidity (Winner: Arrived Homes)
If you’re looking for short-term investments, you likely need to be looking to park your money in places other than real estate. Most real estate investments have a longer time horizon. Arrived Homes and Fundrise are no exception.
Both platforms remind investors to consider the money they invest to be a long-term investment of five or more years. But what if you are looking to sell off your investments sooner?
Arrived Homes is likely the winner here. Investors can liquidate their shares every quarter, as long as they’ve held their investments for half of a year. Penalties are not disclosed until you sell, so you may or may not have to pay them.
What about trying to sell your shares with Fundrise? In order to avoid a redemption fee, you need to hold your Fundrise investments for five years. If you sell your shares back to Fundrise before the end of five years, you will lose part of the share price value. Again, the exact amount isn’t clear, but users report paying at least 1%.
Final Verdict on Arrived Homes vs. Fundrise
In the Arrived Homes vs. Fundrise showdown, which platform is the winner? It depends! When it comes to choosing the right real estate investing platform for you, it’s important to be clear on what type of investing experience you want.
Investors who are looking for an experience that is more similar to picking funds to invest in stocks and bonds will notice that Fundrise offers a similar experience. Conversely, investors who want to get a better feel for properties and markets while still maintaining a more hands-off approach will appreciate what Arrived Homes has to offer.
One common drawback to both platforms is that on top of the annual fee, you can also incur penalties in the case of selling early. However, much of the early criticism that surrounded these platforms when they first came onto the investment scene no longer applies. Both platforms have been responsive to investor feedback and demands, which is something we really love to see.
Are you ready to get started with real estate? Spend time doing some research with both platforms and make sure that the money you invest is for more mid and long-range goals. Then, choose the platform that best suits your needs. You might even give both platforms a try … like I did!
Which platform in our Arrived Homes vs. Fundrise showdown is a winner in your eyes? Do you have another favorite way to invest in real estate?
Please let us know in the comments below.