Fundrise lets you invest as little as $500 in real estate — but plan on parking your money for at least 5 years
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- The Fundrise platform lets you invest in US real estate projects.
- Fundrise is best for passive investors looking to make long-term investments in private real estate.
- Fundrise's Starter Portfolios carry a $500 minimum requirement and offer access to a combination of eREITs and eFunds.
- With at least $1,000, you can upgrade to the platform's Core plans and utilize a larger range of portfolio allocations, account features, and promotions such as advisory fee waivers.
- Click here to open an account with Fundrise.
Is Fundrise right for you?
Fundrise is a crowdfunding platform that lets you invest in commercial real estate projects across the US. You can invest in a combination of the company's two primary investments – eREITS, or electronic real estate investment trusts, and eFunds, or electronic real estate funds – but you'll need at least $500 to begin. In addition, the Fundrise's platform is intended for individuals interested in long-term investments, so plan to set tie up your funds for at least five years.
One thing to look out for when investing with Fundrise is that your real estate investments are mostly illiquid. Unlike traditional REITs, this company offers eREITs that aren't publicly traded on a major stock exchange. This means you won't be able to sell or cash out your investments as easily as you could with liquid assets such as stocks and mutual funds. This creates greater risk during times of high market volatility.
Another drawback is that it can be challenging to understand all of Fundrise's fees. For instance, in addition to the 0.15% annual investment advisory fee and 0.85% annual asset management fee, Fundrise eFunds may apply development and liquidation fees. You'll also run into other charges for retirement accounts such as IRAs.
Bottom Line: Fundrise could be a good fit for investors looking to make long-term investments in illiquid assets. The platform accepts clients regardless of annual income or net worth. You'll simply need to meet the minimum balance requirements and be able to pay account fees.
|Editor's rating||4.6 out of 5|
|Fees||1% (additional $125 for IRAs)|
|Promotion||Advisory fee waiver for up to 12 months.|
Fundrise pros and cons
- Available to non-accredited investors
- Low minimum account size requirements
- Highly diversified investments
- Great for passive investing
- Investments are illiquid
- Complex fee schedule
- Not for short-term investments
How does Fundrise compare to other investment platforms?
4.5 out of 5
3.5 out of 5
3.75 out of 5
$5,000 – $10,000
1% (additional $125 for IRAs)
1% – 2.75%
1% to 2% for Prism Fund; other investments start at 0%
|Open an account||Open an account||Open an account|
Is real estate investing right for you?
Real estate is both an illiquid asset and long-term investment. An illiquid asset is something that cannot be easily sold, traded, or converted to cash due to significant loss in value or lack of investor interest. These assets generally assume higher volatility and require long-term commitment. Real estate investing also typically relies upon passive strategies that require longer time horizons than liquid assets such as bonds, certificates of deposit (CDs), or treasury bills.
Fundrise is designed for real estate investors who have a minimum time horizon of five years, according to the company' website. This means you won't be able to cash out any earnings immediately. However, the company offers an exception.
Investors can take advantage of liquidity quarterly for eREITs, or monthly for eFunds after they bypass a minimum 60-day waiting period.
If you've got at least $500 to invest in real estate, and you don't mind letting your money sit for multiple years, real estate investing could be right for you. Fundrise ultimately selects and manages the real estate projects you're invested in, but you can decide how to allocate your investments.
Ways to invest with Fundrise
You'll only need $500 to begin investing at Fundrise. With $500, you can set up a Starter Portfolio and gain access to a diverse mix of US real estate projects. As for fees, you'll pay a 0.15% annual investment advisory fee and a 0.85% annual asset management fee.
Fundrise primarily offers eREITs and eFunds, but for Starter Portfolios, you'll be investing in an equally allocated blend of the company's Growth eREITs and Income eREIT II. You'll earn returns through quarterly dividends and appreciation of share value.
Fundrise's Core plans are a bit more expensive than its Starter portfolios – they include a $1,000 minimum investment requirement – but they offer access to more investment strategies and account features. Core portfolios offer three different investment plans: Supplemental income, Balanced investing, and Long-Term Growth.
Each plan comes with a varying portfolio allocation and expected return rate. For example, Supplemental Income plans typically utilize a larger percentage of income-focused assets than they do growth-focused assets. Balanced plans employ an equal blend of both, and Long-Term Growth plans rely more on growth-focused assets.
Fundrise's growth-focused assets direct more attention to appreciation and pay less attention to dividends. For instance, for Long-Term Growth plans, Fundrise primarily uses growth eREITs and another asset called eREIT XIV.
All three plans also offer IRAs, auto-invest and dividend reinvestment, and discounts for referrals.
Advanced and Premium account levels
Fundrise's Advanced account level includes a $10,000 minimum investment requirement, but it offers Plus plans which function as add-ons to each Core plan. This account basically offers the same features as the Core plans. The only difference is that it allows you to allocate a percentage of your portfolio to more complex real estate funds and strategies.
The Premium account essentially functions as an add-on to the Advanced account level. With a $100,000 minimum investment, you can not only utilize all of the Advanced account's features, but you also gain priority access to Fundrise's investment team.
Premium accounts also offer access to specialized, private equity funds that carry longer time horizons.
Fundrise partners with Millennium Trust Company to provide IRAs and digital investing solutions. You'll need to transfer an existing IRA in order to invest in real estate funds. Once you set up your account, you'll be able to invest in commercial real estate with eREIT products.
In addition to the combined 1% annual fees, you'll pay a $125 fee if you decide to invest in mutiple eREITs or invest through one of Fundrise's plans. However, you'll pay a $75 fee to Millennium for a single Fundrise eREIT.
It's also important to note that Fundrise's IRAs are currently only eligible to invest in eREITs, not eFunds.
Fundrise offers another investment option – itself. You can purchase shares of the company as long as you've got a Core account level or higher. The firm says it plans to make its IPO available to account holders within their first year of investing.
Since Fundrise has a parent company, Rise Companies Corp., you'll be purchasing stake in both Fundrise and Rise.
What is Fundrise?
Fundrise is an online real estate investing platform that lets you invest in commercial real estate through real estate investment trusts (REITs) and eFunds. The company has an investment team that works directly with real estate developers, manages client portfolios, and handles real estate deals.
In 2012, the company launched its first offering with the mission of using technology to offer high-quality and low-cost real estate investing options to both non-accredited and accredited investors. Many investment platforms only serve accredited investors, or individuals who have a $1 million net worth or make at least six figures every year. But Fundrise prides itself on serving all investors.
Headquartered in Washington, D.C., Fundrise offers investors access to real estate project throughout all 50 states. The platform also provides desktop and mobile access, allowing users to monitor asset growth and review market trends and project alerts. Fundrise also made Forbes' Fintech 50 lists for 2018 and 2019.
Fundrise says it has invested more than $4 billion in real estate across the country, and the advisor currently manages more than $1 billion in equity for more than 130,000 investors, according to its website.
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