Fundrise review April 2021: Low-cost real estate investing. | finder.com

Fundrise review

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Its investment plans make room for both new and advanced investors.

Fundrise is an online real estate investment platform without the upfront and ongoing costs of property ownership. Asset management and advisory fees are clearly listed, but watch out for hidden costs.

N/A

Stock trade fee

0.15%

Annual fee

$500

Minimum deposit to open

8.7% to 12.4%

Average return

Details

Intro or bonus offerIf you’re under a Starter account and you aren’t satisfied with your investment after 90 days, Fundrise will buy it back for the price you paid.
Stock trade feeN/A
Annual fee0.15%
Option trade fee$0
Asset typesReal estate
Account typesRetirement
Average return8.7% to 12.4%
Minimum deposit to open$500

What makes Fundrise unique?

Fundrise sets itself apart from competitors by offering tiered investment plans based on how much and how often investors want to contribute. Beginner investors can get started with $1,00 in the Core plan, while more experienced investors can sign up for the Advanced or Plus plan with $10,000. This gives you access to more sophisticated investment strategies. Premium plan investors can access private equity funds with $100,000 minimums.

How does Fundrise work?

Fundrise creates and gathers real estate trusts and portfolios comprised of residential and commercial properties, allowing users to invest in a diversified mix.

  1. Plan. Choose between one of three plans according to your initial investment:
    • a. Core: $1,000 minimum, three investment strategies based on risk level and goals.
      • Supplemental income: A consistent income stream
      • Balanced investing: High diversification to build wealth steadily
      • Long-term growth: Focus on overall returns over the long terM
    • b. Advanced: $10,000 minimum, advanced real-estate investment strategies that evolve based on market opportunities
    • c. Premium: Illiquid private equity funds with longer time horizons
  2. Invest. Deposit funds
  3. Earn. After funding your account, you may earn returns through quarterly dividends and appreciation in the value of the shares in your investment.

Who is Fundrise best for?

Fundrise is suitable for a variety of investors:

  • Intermediate investors. You can start investing in real estate with with $1,000.
  • Long-term investors. Real estate is an illiquid investment but it can provide long-term returns. Plus, Fundrise’s retirement and IRA accounts can help with retirement planning.
  • Hands-off investors. You can invest indirectly so you won’t need to commit to a down payment, maintenance costs or upkeep that real estate investments generally require.

What are the benefits of Fundrise?

Real estate investing involves risk, but you may have potential for strong returns.

  • Diversification. Portfolios contain a diverse mix of commercial and residential properties that generate revenue differently.
  • Invest at your own pace: Fundrise has different investment options tailored to different types of investors from intermediate to accredited.

What to watch out for

Any returns you make with Fundrise are taxed as ordinary income along with the following downfalls:

  • Illiquid. Real estate investments are illiquid there’s no guarantee that there will be buyers if you want to sell. You can request to redeem shares any time. But Fundrise notes on its website that “such redemption cannot be guaranteed — especially in times of economic uncertainty — and there may be costs associated with premature redemption.”
  • Lack of transparency. Return projections for each investment style is available to investors only.
  • High fees: Fundrise collects fees from the funds it manages and from individual investors
  • Hidden costs. You may directly or indirectly take on fund development fees, asset origination costs, liquidation charges and early redemption fees.

Compare with other real estate investing platforms

Name Product Minimum deposit to open Eligible investors Available asset types Annual fee Average return
RealtyMogul
$5,000
Accredited only
Real estate
1%
Invest directly in commercial real estate through this crowdfunding platform. But you’ll pay variable fees depending on the investment type.
Streitwise
$1,000
All
Real estate
2%
8% to 10%
Streitwise is an online real estate investing company that combines innovative technology and new federal regulations.
DiversyFund
$500
All
Real estate
0%
11% to 18%
Diversify your portfolio with multifamily real estate.
Fundrise
$500
All
Real estate
0.15%
8.7% to 12.4%
Invest in commercial and residential REITs with as little as $500, but watch out for hidden costs.
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Compare up to 4 providers

Fundrise fees and pricing

Fundrise charges clients annualized fees. It it also draws management fees from the funds it runs. You may think of this as an expense ratio.

  • Investment Advisory fee: 0.15% annually
  • Fund Management fee: 0.85% annually

In addition, the following early redemption fees apply to eREIT and eFund shares. These depend on how long you’ve owned the shares before selling:

  • Less than 90 days: None
  • 91 days–3 years: 3% of value
  • 3–4 years: 2% of value
  • 4–5 years: 1% of value
  • 5 years+: None

Fundrise reviews and complaints

Fundrise feedback is mixed. Its mobile app gets stellar ratings but it receives lukewarm feedback on Trustpilot.

As of February 2021, Fundrise is a Better Business Bureau (BBB) accredited business with an A- rating and 56 complaints in the past three years. On Trustpilot, Fundrise maintains a TrustScore of 3.2 out of 5 based on 306 reviews. Its mobile app scores 4.7 out of 5 on Google Play and 4.8 out of 5 in the Apple App Store.

Customers praise the company’s frequent investment updates and its beginner-friendly platform. But there are numerous complaints on both the BBB and Trustpilot of investors having difficulty withdrawing funds. A number of these complaints were filed in 2020, with investors stating Fundrise refused their withdrawal request due to the unstable market conditions produced by the coronavirus outbreak.

How do I sign up?

Sign up for Fundrise in 10 minutes:

  1. Visit the Fundrise website and click Get Started.
  2. Select your plan.
  3. Fill in your personal information, then click Continue.
  4. Confirm your country of citizenship and residence, then click Continue.
  5. Choose your account type, then click Continue.
  6. Fill in your contact information and Social Security number and click Continue.
  7. Choose your initial contribution and fund your account, then click Continue.
  8. Read and agree to all account disclosures and agreements, then click Continue.
  9. Review your information and account details, then click Submit.

Eligibility

  • At least 18 years old
  • US resident
  • US citizen
  • Valid Social Security number
  • Valid US address
  • $500 minimum deposit

Required information

  • First and last name
  • Phone number and email
  • Address
  • Social Security number
  • Bank account information

How do I contact Fundrise customer service?

There are two ways to get in touch with customer service:

  • Email: contact@Fundrise.com
  • Social media:
    • Twitter: @fundrise
    • Facebook: @fundrise

I’m ready to start using Fundrise. Now what?

Now that you’ve signed up, here’s how you can make the most out of the service:

  • Investor profile. Set up your investor profile and any other account information, such as beneficiaries, accreditation, etc.
  • Set up auto-invest. If you plan on investing regularly, set up auto-invest to make recurring contributions.
  • Refer friends. Depending on your account, Fundrise will waive your fees for a specific period of time for each qualified friend you refer.
  • Add two-factor authentication. Visit your account settings page to set up two-factor authentication.
  • Turn on notifications. Get notified when there are new projects, portfolios or other important details.
  • Resources. Take advantage of the Fundrise investor resources to learn about investing, real estate and more.
  • Download the app. Download the Fundrise iPhone app from the app store to manage your portfolio when you’re away from your desktop.

Bottom line

Fundrise is an online investing platform that allows users to invest in real estate without the need for down payments, maintenance costs and other barriers to entry. It has a medium minimum investment of $1,000 and an annual management fee of 0.15%. But investments are extremely illiquid and early withdrawal fees may apply. Learn about other real estate investing platforms then compare your options if this one isn’t right for you.

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