Fundrise Review [2023]: A Comprehensive Look at the Real Estate Investment Platform
Updated: May 13
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As the world of real estate investing continues to evolve, Fundrise has emerged as a popular platform for investors looking to dip their toes into the property market. In this comprehensive review, we'll explore the ins and outs of Fundrise, its pros and cons, and whether it's a good investment option for you.
Writing this Fundrise review was an eye-opening experience! I knew there were other ways to invest in real estate but never knew it could be this easy. With a minimum investment of just $10, you can dip your toes into real estate investing and decide if it's right for you.
Check out my other reviews here. Now, let's dive into Fundrise!
How does Fundrise Score:
Cost and Fees: 8 out of 10
Security: 8 out of 10
Ease of Use: 7 out of 10
Features and Tools: 9 out of 10
Overall: 8 out of 10
Pros
$1,000 minimum to start investing
Easy-to-navigate website
IRA account availability
Low fees - 1% annually
Cons
Limited liquidity
Convoluted fee structure
Difficulty understanding investment types
Tax liability
Fundrise Alternatives
What is Fundrise?
Fundrise is a crowdfunded real estate investment platform that allows investors to pool their funds together to invest in diversified portfolios of commercial and residential properties. Launched in 2012, Fundrise has since made a name for itself as one of the best real estate investment platforms, offering a user-friendly experience and a variety of investment options.
Fundrise's Mission and Vision
Fundrise was founded on the belief that everyone should have access to real estate investing. Their mission is to provide a simple, low-cost way for individuals to invest in high-quality, income-producing real estate.
How Fundrise Works
The Fundrise Platform: eREITs and eFunds
Fundrise offers investments in eREITs (electronic Real Estate Investment Trusts) and eFunds (electronic funds). eREITs are diversified portfolios of commercial properties, while eFunds focus on residential properties. By investing in these vehicles, you can gain exposure to a variety of property types and locations without the hassle of managing individual properties yourself.
Investment Process: Account Setup, Portfolio Customization, and Funding
Getting started with Fundrise is straightforward:
Create an account: Sign up with your email address and basic personal information.
Choose your investment goals: Select your investment objectives, such as generating passive income or long-term growth.
Customize your portfolio: Fundrise will suggest a portfolio based on your goals, but you can also adjust the allocation between eREITs and eFunds.
Fund your account: Deposit funds via bank transfer or wire.
Fundrise Performance and Returns
Fundrise has historically delivered strong returns, with an average annualized return of 8-12% since its inception. While past performance is not a guarantee of future results, these numbers compare favorably to other real estate investment options, such as publicly traded REITs or direct property ownership.
Pros and Cons of Investing with Fundrise
Advantages of Fundrise
Accessibility: Fundrise has a low minimum investment, making it an attractive option for beginners or those with limited capital.
Diversification: By investing in eREITs and eFunds, you can spread your risk across various properties and locations.
Passive income: Fundrise investments generate quarterly dividends, providing a consistent income stream.
Disadvantages of Fundrise
Illiquidity: Unlike publicly traded REITs, Fundrise investments are not as easily bought and sold, which may be a concern for some investors.
Limited control: Investors do not have direct control over the properties in their portfolio and must rely on Fundrise's management team.
Potential conflicts of interest: Fundrise manages its own investment vehicles, which may create conflicts of interest in certain situations.
Fundrise vs. Other Real Estate Investment Options
When comparing Fundrise to other real estate investment options, it's essential to consider factors such as accessibility, control, liquidity, and diversification. While Fundrise offers an attractive platform for those new to real estate investing, more experienced investors may prefer traditional real estate investing, publicly traded REITs, or other crowdfunded real estate platforms.
Investment Considerations
Keep in mind that your money will be tied up for at least five years with Fundrise. While you can attempt to sell your shares before they mature, you'll need to find a buyer within the Fundrise community and may have to pay a fee.
Fundrise Account Levels
Starter: $10+ minimum investment, basic account features
Basic: $1,000+ minimum investment
Core: $5,000+ minimum investment, additional features like dividend reinvestment, auto-investing, IRA support, and referral bonuses
Advanced: $10,000+ investment requirement, access to advanced investment strategies and personalized guidance
Premium: $100,000+ account balance requirement, exclusive investment opportunities, and top-tier service
Fundrise Dashboard Overview
The Fundrise dashboard offers a user-friendly experience, making it easy to understand your investments' performance. You can see your dividends, appreciation, and advisory fees, providing transparency on costs.The Fundrise app is a convenient tool for managing and monitoring your investments on-the-go. With a fully-featured interface, you'll have the same access to tools and visuals as on the website, allowing you to stay up-to-date with your investments from anywhere.
Fundrise App Overview
A Fundrise app is an amazing tool that allows you to invest and monitor from your pocket (or where ever you carry your phone).
The app is fully featured, containing the same tools and visuals you expect from Fundrise. I was even able to tour the app without logging in to my account.
They provide a great tour feature the first time you open the app. It walks you through all the major tools available to you.
You get quick access to investor updates.
You get updates to your current portfolio.
