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DiversyFund vs Fundrise: A Comprehensive Comparison

Updated: Sep 7, 2023


DiversyFund vs Fundrise



DiversyFund vs Fundrise Feature Comparison

Feature

DiversyFund

Fundrise

Starter Portfolio

No

Yes

Core Investment Plan

Yes

Yes

Growth Investment Plan

Yes

No

Advanced Plans

No

Yes

No Management Fees

Yes

No

Low Minimum Investment

Yes

Yes

High Average Returns

Yes

No

IRA Investing Option

No

Yes

Introduction: DiversyFund vs Fundrise

In the dynamic world of investment, diversification is key. It allows you to spread risk across different types of investments, increasing the potential for return and decreasing the potential for financial loss. In the realm of real estate investment platforms, Fundrise and DiversyFund have emerged as significant players. This Fundrise vs DiversyFund comparison will provide an in-depth look at both platforms, examining their history, strategies, performance, and the pros and cons of investing with them. Whether you're a beginner or an accredited investor, or whether you're investing for retirement or looking for passive income, this article aims to help you decide which is better, Fundrise or DiversyFund, based on your specific needs and goals.


DiversyFund vs Fundrise Summary





DiversyFund Logo

DiversyFund

Company Background and History

Established in 2016, DiversyFund has positioned itself as an accessible investment platform that caters to non-accredited investors. The firm operates under the premise that everyone should have the opportunity to invest in high-value assets, a privilege previously reserved for the wealthy.


What is Diversyfund and how does it work

DiversyFund is an REIT (real estate investment trust) that allows users to invest in apartment buildings and multifamily properties.


They acquire properties that are likely to offer good growth opportunities. Their proprietary research process identifies these opportunities and presents them to their investor group.


As with any good investment, DiversyFund takes income from their properties and reinvests them monthly to fully finance property improvements until they feel confident they can profit enough from the sale of a property. If you have invested in a property that is sold, then you would receive your funds and profits for you to reinvest or cash out.


Fundrise Logo

Fundrise

Company Background and History

Founded in 2010, Fundrise paved the way for crowdfunding in the real estate industry. It was one of the first platforms to open up direct access to private market real estate to ordinary investors.


What is Fundrise and how does it work

Fundrise is another investment vehicle for those seeking real estate investments. They focus on eREITS (electronic real estate investment trusts) and eFunds.


Fundrise targets similar real estate to DiveryFund, but they also expand into single-family housing and commercial real estate. Further, they will invest in private equity funds that focus on tech companies. For any investor looking to focus solely upon real estate, you may want to explore other options. If you are simply looking for alternative investment opportunities, then Fundrise might be the vehicle for you.


Fundrise offers three investment plans for their users (see below). They also offer Fundrise Pro (for $10/month) where you can build your own investment strategies.

Fundrise Investment Plans



Key Differences

Investment Strategies

While both companies provide real estate investment opportunities, their strategies differ significantly. DiversyFund places an emphasis on multifamily real estate projects and takes an active role in property management and asset selection. On the other hand, Fundrise utilizes a more passive approach, relying heavily on eREITs and eFunds for diversification.


Investment Options and Plans

Fundrise offers a wider range of investment options. From the Starter Portfolio for beginners, to the Core and Advanced plans for more serious investors. Conversely, DiversyFund focuses mainly on their Core and Growth investment plans.


Minimum Investment Requirements and Fees

With a minimum investment of $500 and no management fees, DiversyFund offers an attractive starting point. Meanwhile, Fundrise's minimum investment starts at $10 for the Starter Portfolio but increases for its other plans. Fundrise also has a fee structure that can reach up to 1% annually.


Performance and Historical Returns

Both platforms have solid track records, but Fundrise, having been established earlier, offers more historical data. However, DiversyFund aims for higher annualized returns, between 10% to 20% (at the time of this publication) compared to Fundrise's average annualized returns, between 8.7% - 12.4% (at the time of this publication).


Investor Involvement and Transparency

Both platforms offer a hands-off investment experience, but DiversyFund provides more active involvement in their projects. In terms of transparency, Fundrise excels with its open disclosure of past performances.


Factors to Consider

Investors should consider several factors when deciding between Fundrise and DiversyFund.


Risk Tolerance and Investment Goals

Consider your risk tolerance and investment goals. If you prefer an active strategy focusing on multifamily real estate projects, DiversyFund may be the better choice. However, if you're looking for a passive approach with more diversified options, consider Fundrise.


Liquidity and Redemption Options

Real estate investments are typically illiquid, so understand the redemption options for both platforms. Remember that selling shares before the end of the investment term may result in penalties.


Level of Investor Involvement

For investors who prefer a hands-off approach, both platforms will suit, but with its active property management, DiversyFund may offer more peace of mind.


Fees and Expenses

While DiversyFund offers no management fees, Fundrise charges up to 1% annually. Consider this cost when calculating potential net returns.


Track Record and Historical Performance

Finally, consider the track record and historical performance of both platforms. While Fundrise has been around longer and offers more historical data, DiversyFund has demonstrated impressive returns despite its shorter history.


Conclusion

In summary, both DiversyFund and Fundrise provide excellent platforms for those looking to diversify their investment portfolios with real estate. However, they offer different approaches and advantages that may cater to different types of investors.


DiversyFund provides an accessible entry point into real estate investing, with a strong emphasis on multifamily properties and an active management style. They have an impressive track record, despite their shorter history. Their no-fee structure and low minimum investment are also appealing.


On the other hand, Fundrise offers a more passive investment approach with a broader range of investment options. Their longevity in the market has given them a solid track record, and the transparency they provide regarding past performance is commendable.


While both platforms provide low minimum investments, the fees, investment strategy, and types of plans offered differ. Understanding these differences can help investors choose the right platform for their individual needs and financial goals. Further, ensuring you understand how these investments will grow over the long-term will help you build confidence in your platform of choice, check out our APY calculator to see how your investments can grow over time.


The choice between DiversyFund and Fundrise ultimately depends on your individual needs, risk tolerance, and investment goals. Other important considerations include the level of investor involvement, liquidity, fees, and the platform's track record and historical performance.


While this article provides an overview of DiversyFund and Fundrise, prospective investors should conduct further research and due diligence. Consulting with a financial advisor or conducting additional research on DiversyFund and Fundrise can provide further insights tailored to your personal financial situation.


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