What is Fundrise?
Fundrise is a crowdfunding real estate platform that lets anyone invest in real estate without the hassle of acquiring or managing it. You do not need a whole lot of money. Fundrise investing can be started with as little capital as $500. Read the full fundrise review to see if investing in fundrise is a good fit for you.
How Fundrise works?
The way fundrise works is by acquiring, managing, or constructing new residential or commercial properties is the prime growth area.
Fundrise only funds those project which exists between large institutional projects and small individual project. By doing so, they try to eliminate the high risk of smaller projects and holding of significant capital on institutional projects.
Only 1% of submitted projects get funding from fundrise.
The Platform
Fundrise provides a nice and clean interface. You can see your investment overview and chart of performance.
Fundrise platform makes it easy to access all the details about each investment including location, investment timeframe, potential risk, and notes about why they choose that investment. They also post periodic updates on each investment.
Risk/Return.
Like any-other investment fundrise is no exception to risk. Based on fundrise historical return fundrise was able to generate a higher return than any publicly-traded REITs and bonds. In 2019 fundrise was able to generate a 9.47% return.
Fundrise has been performing well for the last couple of years but it will be hard to sustain a similar kind of growth and Crowdfunding real estate does not have long track records like index funds.
S&P 500 Index Funds have a history of an average of at least 10% annual Return with Lower Fees and High Liquidity than Fundrise.
Liquidity.
Fundrise expects your to hold your funds for at least 3 years and I would recommend that you hold your investment at-least 3 years or more! After all, real estate is a long term investment.
I have requested a withdrawal of $2,000 this month and I will update when my request will get approved.
Also, pulling out of your funds early comes with more fees, that we will discuss in the Fees section of this article.
Fees.
Fundrise charges 1% Annually. 0-2% Asset Origination / Acquisition Fees.
Fundrise also charges fees if you withdraw your funding earlier than 5 Years.
| Duration | Fees |
| Less than 90 Days | None |
| Less than 3 Years | 3% |
| 3 Years to 4 Years | 2% |
| 4 Years to 5 Years | 1% |
| Over 5 Years | None |
Fundrise does not count duration based on what day you started investing in fundrise but based on the day you make each investment.
For Example: If you start with a $500 investment on 01/01/20 add $500 on 03/01/20 then the First $500 that you invested on 01/01/20 can be withdrawn on or after 01/01/25 without any fees. The second $500 which you invested on 03/01/20 can be withdrawn on or after 03/01/25.
Tax
Fundrise pays dividends quarterly. Fundrise dividends are taxed at your normal income tax bracket rather than at 15% for qualified dividends.
Final Thought
Should you invest in Fundrise? It depends on your investment strategy, but if you are just looking for an investment that pays higher returns then invest in Index funds instead of fundrise. On the other hand, if you already have money invested in stocks & ETFs then you want to invest in fundrise to diversify your portfolio.
Please share your thoughts about my fundrise review.
Thanks for the info. But can you please share your experience with fundrise investing? or other alternatives.
I have invested in fundrise about 2 years ago, between 2018 and 2019, I invested about $2000 and so far my return is decent, it s about 7.5%/Year.