Most people know that real estate can help accelerate your financial goals. However, many people feel that they don’t have the time, understanding, or cash to get started with real estate. Fundrise is looking to change that. In our Fundrise review, learn more about the Fundrise features we love and how they stack up to their competitors.
Then, you can determine if Fundrise fits into your financial plan. Let’s dive in!
Who is Fundrise?
Fundrise is a real estate investing platform that was created in 2012. Headquartered in Washington D.C., Fundrise continues to earn accolades as a top option for people looking to grow their investing portfolio.
Their goal is to give people a better way to invest in real estate. The fact that they have over 1 billion dollars in equity under their management suggests they are well on their way!
And this isn’t just big-money investors. In fact, nearly 400,000 people invest with Fundrise. That's the goal of Fundrise–to give anyone who wants to invest in real estate, a way to do so. In developing this platform, Fundrise uses the power of technology to lower costs and raise the accessibility of real estate.
Investors can get started with as little as $10. You create a portfolio strategy that meets your goals and risk tolerance. Then, Fundrise pairs you with eREITS or other investment fund options that best fit your strategy. Afterward, Fundrise pools your money with other investors, allowing you to invest in private residential and commercial properties.
Fundrise also helps you stick to your goals. They keep tabs on your portfolio to make sure your investments still match your strategy. Plus, as more opportunities to invest come up, they’ll make you aware of them. It’s “set it and forget it” investing in the real estate world!
Fundrise Review: Best Features
There’s a lot to love about Fundrise. Our favorite features are a testament to Fundrise’s belief that anyone who wants to be a real estate investor should be able to become one.
Read on to find out more about the best features of Fundrise.
Do you think you have to sit out of real estate because you don’t have a ton of capital? With Fundrise, you can start investing with as little as $10.
Fundrise uses account levels based on the value of your portfolio. The Fundrise account levels are:
As you invest more and your portfolio value grows, you can access more features and benefits. Investors at the Core level and beyond will see the most bang for their buck.
No matter how much money you have invested, though, you can still use the auto-invest feature to make investing simple and painless. Plus, you can use goal-setting features at each level, which become more robust as you move up the tiers.
Availability to All Investors
Investment minimums aren’t the only thing to love about Fundrise. We appreciate the philosophy behind Fundrise. They aim to make real estate investing something that is available to all investors.
Arguably, real estate investing often comes with some of the biggest barriers to entry. Maybe it’s coming up with cash for a down payment or securing financing to rehab a fixer-upper. Or maybe it’s the expertise required to really learn about specific markets or the time needed to be a landlord. Fundrise knocks down those barriers and gives every investor a chance to get into the real estate game.
Portfolio Investment Options
Fundrise looks at its portfolio strategies in four different ways. They break these down by strategy, including:
- Fixed Income
- Core Plus
- Value Add
As you move through the strategies, both the return and risk level increase.
You can check the easy-to-use tables on Fundrise to find out more about the timing of expected returns and the primary expected source of returns. Of course, investment performances aren’t guaranteed. But it’s helpful for investors to understand the different strategy options to choose what best meets their individual needs.
Website and App Usability
Users love the Fundrise platform. Whether you intend to access the full website or use the app, you will find that Fundrise didn’t cut corners when it comes to user experience.
Some investing platforms have a reputation for being clunky. That’s not the case with Fundrise. Whether you are a brand-new or seasoned investor, you will find that you can easily navigate–and understand–your portfolio. With auto-invest options, you can keep growing your portfolio while taking a completely hands-off approach to investing.
Want to keep a close eye on your account? Fundrise's website and app make it easy to do that at home or on the go.
Fundrise is available on both the App Store and Google Play. With over 25,000 reviews, Fundrise is rated 4.8/5.0 in the App Store. Its Google Play rating is 4.4 with more than 2,000 reviews.
Users across devices comment on a smooth experience, saying that it’s easy to track your investment performance. Some users do note that you have to leave the app at times to make more detailed adjustments to your account.
Improved Investor Goals Feature
Fundrise offers investors a goals-based tool to help you monitor your investments.
With this tool, you can:
- Choose a goal type
- Set goal targets
- Track your progress
This goals feature is now part of every investor's personal Fundrise dashboard. Now, you'll never have to wonder if your investments are on track again!
Fundrise doesn’t guarantee that you’ll earn dividends. However, if you do earn them, they are paid on a quarterly basis. That means that users can count on fairly consistent times of the year to see income generation from real estate.
This predictability and consistency can be helpful when it comes to building your Fundrise portfolio (you can reinvest your dividends!) and looking at your bigger financial picture.
Fundrise Review: Areas for Improvement
Not every investment tool is for everybody. And while we think Fundrise certainly meets a lot of people's needs, there are some areas of Fundrise that we hope they will continue to improve.
We’ve said it before, and we’ll say it again. Fees can make or break your investments. Real estate investing is no different. That’s why we really hope to see Fundrise be more transparent with their fees.
From the site, you can see that most investments come with a 1% fee. That fee combines a 0.85% asset management fee and a 0.15% advisory fee. That fee is in line with other real estate investing platforms.
However, Fundrise also points out that “other fees may apply”. Since Fundrise says they target new investors, more clarity on what might trigger those fees and what those fees might be would really help people just getting started. After all, no one likes surprises when it comes to their money.
If you need to get your hands on your money quickly, Fundrise likely isn't going to cut it. In fact, Fundrise suggests that investors use a five-year time horizon or greater in terms of seeing the best return on their investments.
It is possible that your portfolio might generate quarterly dividends, but the investment itself is still fairly illiquid. This is a common concern for all real estate investing, though, not just Fundrise.
Customer Support Options
Fundrise does offer solid support. Where they might fall short for some investors, though, is when this support is available. You can get help using a ticket system Monday through Friday from 9 am-5 pm EST. You can also email them at email@example.com.
Still, we understand that some investors prefer being able to call a phone number or use a chat option to connect with customer support more quickly.
Fundrise Review: Competitors
Fundrise isn't the only way to add real estate to your investment portfolio. In fact, there are numerous ways that you can take a hands-off approach to real estate.
Let's explore some of the Fundrise competition to see how they stack up. (Spoiler alert: Many investors skip an either/or approach to these platforms. Instead, they use multiple real estate platforms that complement each other to reach their goals!)
Arrived Homes is similar in the sense that it’s another real estate investing platform designed for people just like you and me. The biggest difference, though, is that with Arrived Homes, you are still picking individual properties to invest in.
This is a bit more hands-on homework than Fundrise. But if you’re someone who is constantly window shopping on Zillow, you might find that you really enjoy learning about real estate markets and investing with Arrived Homes.
See more about how the two compare in our Arrived Homes vs Fundrise match-up!
Roofstock is another platform designed to give everyone the chance to invest in real estate. Unlike Fundrise, Roofstock lets people invest in specific properties. More specifically, Roofstock is the solution for turnkey rental properties.
To simplify the rental property world, Roofstock vets different properties. They review the local markets and assign ratings to different properties. Roofstock lists properties and all of the accompanying information on the Roofstock exchange. Then, investors can purchase those properties directly from the seller.
If you want to truly take the hassle out of rental properties, Roofstock can also connect you with property managers. This is ideal for people who don't want to take on the role of landlord or for people who are looking to invest in distant markets.
There are many pros and cons to real estate, and Roofstock addresses many of the drawbacks. However, it's worth noting that Roofstock requires a considerable amount of money upfront compared to the $10 it takes to get started with Fundrise.
Publicly Traded REITs
When you purchase a REIT, or a real estate investment trust, it's similar to investing in a mutual fund or ETF. They are registered with the SEC. You will see REITs traded on the market, similar to stocks.
Publicly traded REITs are available through brokerages like Vanguard. However, the minimums are often significantly higher than Fundrise. Additionally, people who are just getting started with real estate investing sometimes feel a bit of overwhelm when it comes to making that initial investment.
Fundrise offers more guidance by allowing you to identify goals and risk tolerance and then helping you choose the investment options that best fit your needs.
Fundrise Review: FAQ
No review would be complete without going over some of the most common Fundrise FAQs. We dug into common questions to get you the answers you need to help you decide if Fundrise is right for you.
Can you really make money with Fundrise?
Yes! You really can make money with Fundrise! Of course, how much you see in returns depends on a variety of factors, including the size of your portfolio and how much risk you take in your investments.
Fundrise is also very transparent with their client returns. In addition to updating a real-time return chart daily, they also display a comparison of market performance that shows how Fundrise compares to public REITs and public stocks.
How often does Fundrise pay you?
Four times a year! Fundrise pays dividends quarterly. Investors have the option to receive their dividends or reinvest them. That means that you either get paid in cash or you can opt to have those dividends invested back into your Fundrise portfolio. The DRIP, or dividend reinvestment program, does not currently come with any fees.
Fundrise says that they aim to pay mid-month following the end of each quarter. That means that you will likely see dividends in April, July, October, and January.
Is Fundrise better than a REIT?
Fundrise might be better than a REIT. It really depends on you as an investor and what your goals are.
A REIT is a real estate investment trust. But what does that actually mean? A company will invest in what they believe to be income-producing real estate. Then, investors can buy slices of that REIT to take part in the profits.
In the case of a private REIT, you have to meet certain criteria to invest. If you aren’t an institutional investor or an accredited investor (most of us aren’t!), then you can’t invest in or profit from a private REIT.
However, there are publicly-traded REITs that are widely available. In fact, Fundrise includes a type of REIT, called an eREIT.
These eREITs contain different funds that let inventors meet different objectives. They also take different risk tolerances into consideration. Investors still benefit from focused real estate investment strategies with a more personalized experience.
Plus, the direct investment approach that Fundrise takes allows you to bypass some of the costs associated with more traditional REITs.
That all being said, if you're looking for a more liquid option than Fundrise, choosing a REIT ETF or index fund through a brokerage partner like Vanguard, Fidelity or Schwab could be a smart move.
What is your real-life experience with Fundrise?
I'm just getting started. I have the “Flagship Real Estate Fund” and my account is under $1,000. Most of my investments are in single family homes with the remainder being in multifamily and industrial.
Since I started investing in 2022, my investment performance is nothing to get excited about yet (a 9% loss to date). I believe in the power of long-term investing with real estate so I'm sticking with Fundrise despite my losses so far.
If you're looking for a quick investment to make money fast, I wouldn't recommend Fundrise. But if you're open to long-term buy-and-hold investing without the drama of landlording, Fundrise could be for you.
Final Thoughts on our Fundrise Review
Real estate investing can catapult you to your goals faster. It can also involve a lot of legwork and time. However, real estate platforms are working to simplify the process and give everyone a chance to invest.
Check out Fundrise to see if this “set it and forget it” option can help you add real estate to your investment portfolio. With low minimums and a variety of portfolio options, Fundrise offers choices that should meet most investors' needs–from beginners to seasoned investors. That being said, Fundrise is not for people looking to make money fast. Fundrise, and really almost all real estate investing, works best with a long-term investing mindset.
What stands out to you the most in our Fundrise review? Is real estate part of your investing plan?
Please let us know in the comments below.