Investing in real estate has long been a popular way for people to build wealth and diversify their portfolios. However, for many years, it was only accessible to those with significant capital to invest. With the rise of real estate crowdfunding platforms like Fundrise and Crowdstreet, investing in real estate has become more accessible to the average investor.
In this article, we will be comparing Fundrise and Crowdstreet in 2023 to help you decide which platform is right for you.
Overview of Fundrise and Crowdstreet
Fundrise and Crowdstreet are both real estate crowdfunding platforms that allow individual investors to invest in commercial and residential real estate projects. Both platforms pool investors’ money to purchase properties, which are then managed by experienced real estate professionals. Investors can choose to invest in specific projects or invest in one of the platforms’ diversified portfolios.
Fundrise was founded in 2010 and has since become one of the most popular real estate crowdfunding platforms. The platform has over 150,000 active investors and has invested in over $5 billion worth of real estate projects. Fundrise offers a variety of investment options, including eREITs (electronic real estate investment trusts), eFunds (electronic real estate funds), and standalone projects.
Crowdstreet was founded in 2014 and has quickly become one of Fundrise’s biggest competitors. The platform has over 200,000 registered investors and has invested in over $10 billion worth of real estate projects. Crowdstreet offers a range of investment options, including individual projects and diversified portfolios.
Investment Options
Both Fundrise and Crowdstreet offer a range of investment options to suit different investment goals and risk tolerances. Here is a table that compares the investment options of both platforms:
Investment Options | Fundrise | Crowdstreet |
---|---|---|
eREITs | Yes | No |
eFunds | Yes | No |
Standalone Projects | Yes | Yes |
Diversified Portfolios | No | Yes |
Individual Projects | No | Yes |
Fundrise offers three different types of investments: eREITs, eFunds, and standalone projects. eREITs are similar to traditional real estate investment trusts, allowing investors to invest in a diversified portfolio of real estate assets. eFunds, on the other hand, focus on specific real estate sectors, such as residential or commercial real estate. Standalone projects allow investors to invest in specific properties, such as apartment buildings or office buildings.
Crowdstreet also offers a range of investment options, including individual projects and diversified portfolios. The platform’s diversified portfolios are made up of a mix of different real estate assets, such as multifamily properties, office buildings, and retail centers. Investors can also choose to invest in individual projects, which are typically larger commercial or multifamily properties.
Fees
Both Fundrise and Crowdstreet charge fees for their investment services. Fundrise charges an annual asset management fee of 0.85% for its eREITs and eFunds, while standalone projects may have different fee structures. Crowdstreet charges a similar annual asset management fee of 0.50% for its diversified portfolios and individual projects.
In addition to the asset management fees, both platforms may also charge other fees, such as transaction fees or fees for early withdrawal.
Performance
When it comes to performance, both Fundrise and Crowdstreet have had their ups and downs. Fundrise’s eREITs and eFunds have historically offered annualized returns of between 8% and 12%. However, these returns can vary depending on the specific portfolio and market conditions.
Crowdstreet has also had solid performance in the past, with some individual projects offering returns of up to 20%. However, like Fundrise, performance can vary based on the specific investment and market conditions.
It’s important to note that past performance does not guarantee future returns, and all investments come with risk. Real estate investments can be affected by a range of factors, including economic conditions, property management, and market fluctuations.
Ease of Use
Both Fundrise and Crowdstreet are relatively easy to use, with user-friendly interfaces and straightforward investment processes. Both platforms offer online account management and allow investors to easily monitor their investments.
However, one key difference between the two platforms is the minimum investment required. Fundrise’s minimum investment is $500, while Crowdstreet’s minimum investment is $25,000. This may make Fundrise a more accessible option for smaller investors.
Customer Support
Both Fundrise and Crowdstreet offer customer support to investors, with responsive customer service teams available to answer questions and assist with any issues. Fundrise also offers a dedicated support line for investors who need additional assistance.
Overall, both Fundrise and Crowdstreet offer attractive options for investors looking to diversify their portfolios with real estate investments. While Fundrise may be a more accessible option for smaller investors due to its lower minimum investment requirement, Crowdstreet offers a wider range of investment options and diversified portfolios. Ultimately, the choice between the two platforms will depend on individual investment goals and risk tolerances.
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Conclusion
In conclusion, investing in real estate through crowdfunding platforms like Fundrise and Crowdstreet can offer investors the opportunity to diversify their portfolios and potentially earn attractive returns. However, it’s important to carefully research and consider all investment options and their associated risks before making any investment decisions.