More opportunities exist for investors to make indirect real estate investments, and real estate crowdfunding is among the simplest ways to accomplish this.
Being an early success, Fundrise contributed to the concept’s acceptance among mom-and-pop shareholders. They provide non-accredited investors with private REITs for as little as $1,000 and more sophisticated investments for accredited investors. Many other real estate crowdfunding platforms are available today, and many investors are looking for new strategies to expand their portfolios.
What is Fundrise?
Fundrise is a financial tech firm headquartered in Washington, D.C, that launched an online investment vehicle in 2010. Fundrise is credited with being the first firm to crowdfund real estate investment success.
Real estate investment trusts, or REITs, are the main products available from Fundrise. REITs usually invest in income-producing real estate by purchasing and coordinating buildings or maintaining mortgages. The brand refers to its goods as “eREITs.”
Additionally, Fundrise provides eFunds, in which the combined funds of investors are used to purchase land, build housing, and then sell it. Along with its other funds, Fundrise also provides what it refers to as an Interval Fund, which has a higher level of diversification and liquidity.
Fundrise is just one of the many crowdfunding businesses out there, though. Additionally, some companies may be superior depending on your investment objectives, desired returns, and available capital.
To help you expand your investments in real estate, we’ve listed the top Fundrise alternatives. There is a choice for every investor because some are only available to accredited investors and others are available to everyone.
Now let’s check out some of the top Fundrise competitors:
Required Investment: $25,000
Yearly Returns on Average: 18.3% IRR
Fees: 2 to 5 per cent, depending on the deal.
The best Fundrise substitute for accredited investors is CrowdStreet, which also enables you to invest in top-notch commercial assets.
Commercial REITs and direct deals are the two primary investment options on this crowdsourcing platform. Only 2% of deals make it to their marketplace, so there is always a rigorous vetting process.
Minimum Investment: $5,000
Yearly Returns on Investment: 8% to 9% per year
Fees: 2 per cent per year in fees
Streitwise concentrates on investing in equity-based commercial REITs similar to Fundrise and other platforms. At the time of writing, there is only one REIT offering with 8 to 9 per cent annual dividend targets.
Streitwise assesses annual fees at a rate of 2%. While Streitwise is more costly than Fundrise, it prioritizes making regular, high dividend payments. The quoted dividends are also fee-free.
Minimum Investment: $0
Yearly Returns on Investment: based on down payment and type of property
Fees: 0.50 per cent or $500 following deal completion
Many Fundrise competitors focus on commercial real estate and employ the crowdfunding business model.
What happens if you want to expand your real estate holdings to include single-family homes? Companies like Roofstock step in to help with that. You can invest in provided rental properties and find them using the platform.
If you’re interested in becoming a landlord, there are also portfolios with numerous properties.
In addition, Roofstock offers a wealth of listing details, such as a community score and fairly standard annualized returns. Additionally, you can view floor plans, take a 3D tour, review title reports, and compare insurance quotes. Furthermore, you can access information about the current lease, the tenant, and payment history.
Minimum Investment: $5,000
Yearly Returns on Investment: Dependent on the fund, typically between 6 and 8 per cent.
Fees: This ranges from 1 to 1.25 per cent for most investments.
RealtyMogul is yet another well-liked way for investors to access commercial real estate. RealtyMogul provides its members with REITs and direct deals, similar to CrowdStreet. While direct deals allow you to invest for more specialized objectives like profits or property appreciation, REITs are great for diversification.
The majority of investments with RealtyMogul have a $25,000 minimum. Its REITs, however, have a $5,000 threshold and accept non-accredited investors.
Minimum Investment: $500
Yearly Returns on Investment: 9.96% IRR
Accreditation: None for the beginner-level fund
Fees: Average annual fees range from 2 to 2.5 per cent.
Yieldstreet offers the most variety of any available Fundrise alternatives. Investors can access a variety of alternative asset classes through this company. Real estate falls under this category, along with other assets like cryptocurrencies, art, and short-term notes.
Yieldstreet’s Prism Fund can be purchased for just $500. This fund comprises a fixed-income portfolio with various assets, including consumer goods, real estate, and fine art. The Prism Fund is open to non-accredited investors, but you must be accredited to invest in specific offerings.
Fundrise Competitors: The Bottom Line
Thanks to crowdfunding platforms, you no longer need tens of thousands of dollars to make a real estate investment. Additionally, you are now free to select between debt-based investments, residential investments, and commercial investments.
You also have many options between Fundrise and the competing businesses in the industry. If you want to experiment with various funds, you can also expand your assets