Fundrise Competitors (And Why You Should Disregard Them)
Real estate investing used to be limited to those with lots of capital to spare.
However, when the SEC released new regulations in 2012 regarding crowdfunding, many more real estate investment options became available to the average person.
One of the first platforms to take advantage of these laws was Fundrise, a popular real estate investment platform that aims to make investing accessible to anyone. Of course, Fundrise isn’t the only option out there, but that’s why we wrote this article: to explain why we think you should choose Fundrise over the competition!
The laws enabling Fundrise to operate legally weren’t put in place until 2012, but the company itself was actually founded in 2010. This means Fundrise had two years of preparation before finally releasing its platform to the world.
The initial version of Fundrise didn’t offer many of the advantages the platform currently prides itself on.
While individuals today can begin their investing journey with less than $500, the original Fundrise required all investors to be accredited and have thousands of dollars to invest upfront.
Thankfully, these requirements were lowered over time, giving way to the version of Fundrise that investors are familiar with today!
Fundrise has been operating publicly for roughly a decade, making it the same age (or older) as much of its competition.
While simply being older isn’t always a positive thing, we think age works in favor of Fundrise. Despite being one of the first services of its type, it managed to grow and produce reliable results for its customers throughout the years.
For new investors, initial deposit requirements often pose a major obstacle. Many Fundrise competitors—such as DiversyFund—require a minimum deposit of $500 (and that’s on the lower side).
Some platforms go well beyond this point, requiring thousands of dollars to be invested upfront! Fortunately, Fundrise has significantly lower requirements, making this obstacle obsolete.
To get started on Fundrise, you’ll need a minimum of $10. While a deposit of this size will somewhat limit your investment options, you’ll nonetheless have started your investment journey!
Fundrise will take your deposit and turn it into a diverse portfolio of fractional investments. You can continue to make deposits as you watch your investments grow.
Fundrise offers multiple portfolios and investment options. The more money you deposit, the more options you’ll have available to you. If you’re interested in investing in Fundrise directly, the company allows you to allocate up to 50% of your portfolio’s value into the Fundrise IPO.
“Accredited investors only.” It’s a common roadblock in the world of real estate investing, and one that can keep many potential investors from making their first move.
To be considered an accredited investor, you’ll need to meet a lofty set of financial requirements (such as having a net worth exceeding $1M or making more than $200k per year).
While many alternative platforms—such as Crowdstreet—only make their services available to accredited investors, Fundrise is open to both accredited and non-accredited investors alike.
Different services offer different types of investments. Many services offer pre-made portfolios that allow you to make fractional investments, but you can also invest in stand-alone REITs.
If you choose to invest in a REIT, you’ll want to ensure you’ve properly done your research beforehand. Your performance will ultimately depend on the REIT’s portfolio, so investing always carries some level of risk.
With Fundrise, you know that the properties have been heavily researched beforehand to ensure profitability. In fact, they only accept approximately 1% of the investment opportunities presented to them!
Unfortunately, this isn’t always the case when investing in random REITs, and the risk could be higher/lower depending on the particular REIT.
While investing in individual REITs gives you more options, Fundrise offers different investment options that are tailored to different financial goals (such as “Supplemental Income” or “Long-Term Growth”).
If you’re hoping to begin investing in real estate but lack any prior experience, Fundrise is our top recommendation!
While past performance isn’t necessarily an indication of future performance, we think it’s fair to assume that your money is safe with Fundrise. They’ve achieved an average return rate of 5.42% over the years (compared to 2.17% of the S&P 500).
Furthermore, their worst historical performance still resulted in a return of 1.15%! Although they might not offer the most impressive returns around, they do offer consistent growth for their clients.
Fundrise has lots of competitors, and the competition will no doubt grow throughout the coming years. While it’s impossible to guarantee that a superior service won’t be available at some point, Fundrise is the best option at the moment.
Offering over a decade of experience, reliable returns, multiple investment options, the company IPO, and more, Fundrise makes it easy for anyone to start their real estate investing journey. Click here to start investing with as little as $10!