How can Fundrise benefit your future?
Updated: Jan 20, 2020
Do you have the money to own real estate rental properties and the know-how to manage them?
Real estate is a great investment, but it is hard to break into, due to the amount of cash and knowledge needed for it. Fortunately, there are fantastic crowdfunding sites like Fundrise available to laymen like me, where we can have professionally managed, high yield real estate investments that passively accrue wealth.
Fundrise is probably my favorite investment platform outside of my regular 401K. I love most everything about it. The way it works is you put money into the account and then a professional team reviews and invests in real estate properties for a small fee. No accreditation is required; anyone with the money can invest.
Three investment options
Fundrise offers three different investment plans: Supplemental Income, Balanced Investing, and Long Term Growth.
Supplemental Income focuses on higher dividends and lower appreciation, so that you get more money from the investment now. However, this also has the lowest total rate of return, as there is less compounding of interest involved. I think this is a good plan to switch to later in life when you have a big nest egg, so you can get some extra income from it.
Long Term Growth is the plan I use. This has the highest total rate of return, as it focuses more on appreciation and less on dividends. Though it depends on your age and lifestyle, I would generally recommend using this plan and reinvesting the dividends for the best returns.
Balanced Investing is the middle ground between the other two plans. It focuses on both aspects equally and has a total return somewhere between the other two.
When I looked into Fundrise, I also found a company called Realty Mogul, which I spent some time looking into. However, I decided to go for Fundrise in the end, so I never opened an account with Realty Mogul, even though they have a few things they do better than Fundrise, such as having lower fees. Feel free to check it out.
Hands-off real estate investment platform
No accreditation required
Regular updates from Fundrise on investment projects
Diversification - My portfolio has 106 active projects as I write this.
Very user-friendly interface
Connects to Personal Capital
Breakdown of dividends, appreciation, and advisory fees
Historical graph and a predictive graph
Goal setting - You can set a goal for where you want to be in a certain number of years and it will advise how much money you should invest every month to hit that goal.
There is no app for your phone.
1% investment management fees - I’m not sure exactly what this is 1% of, because the fees I was charged are less than 0.1% of my total investment and a little more than 1% of my returns.
Not a liquid asset - You will be charged extra fees if you withdraw within 5 years of starting Fundrise. It also takes a while to transfer to your bank. Don’t invest money you want to use within the next 5 years!
$500 minimum investment - This is dirt cheap compared to most real estate investing, but it might be a little pricey for some budgets.
Risk - There is always risk when investing; don’t invest money you can’t afford to lose!
Look into Fundrise, but don’t invest in it right away, even if you have the money for it! Wait at least a few days, talk to your spouse about it (if you have one), and then if it still feels good in a few days and you can afford it, then feel free to try it out. Please use my link and we will both have our advisory fees waived for three months!