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Fundrise vs. CrowdStreet: How to Choose the Best Platform for Your Portfolio

Fundrise vs. CrowdStreet: How to Choose the Best Platform for Your Portfolio

Real estate investing has historically been limited to wealthy investors with lots of capital. However, thanks to recent regulatory changes and the innovation of the internet, real estate investment opportunities are now available to investors of all wealth levels. In this Fundrise vs. Crowdstreet comparison, we’ll be taking a brief look at each platform. While they both present similar offerings, their exact services, limitations, and portfolio options differ. Not sure which platform is the right one for you? You’ll surely know by the end of this article!

Why Invest in Real Estate?

Historically, real estate is a good investment. Market values tend to increase over time, and real estate itself is a necessity. People will always need homes to live in, and companies will always need a place to run their operations. Of course, even the value of real estate tends to fluctuate as time passes, which is why we never recommend placing all of your eggs in one basket.

Nonetheless, real estate offers an easy way to diversify your portfolio, preparing yourself for unforeseen market volatility while securing your financial future. There are many alternative options beyond the two we’ve listed here, but these two are certainly worth taking note of. Let’s see exactly what each platform can offer you!

Fundrise

This online real estate investment platform—founded in 2012—aims to make it possible for anyone to start investing (with as little as $10!). Fundrise allows users to invest in residential and commercial projects by purchasing REITs. They can also choose to invest in developments and even the company (Fundrise) itself via the Fundrise IPO.

This legitimate service continues to produce consistent returns for its clientele. Over the last 22 months, Fundrise has seen an average 5.42% return, outperforming both public REITs and the S&P 500. With this past performance in mind, here are the various account options they offer for investors.

Account Types

  • Starter - Requiring only an initial investment of $10, the “Starter” account offers a barebones selection of features to begin your real estate investing endeavors.
  • Basic - Enjoy IRA investing, “Investors Goals”, and access to the Fundrise IPO with an initial investment of $1,000 or more.
  • Core - Requiring an initial investment of $5,000 or more, the “Core” plan includes the same features as before. But, it also allows investing in non-registered products. This plan is best for custom portfolio management.
  • Advanced - The “Advanced” plan requires an investment of $10,000 or more. It allows investors to access “specialized funds”, giving them more flexibility when it comes to their specific investment strategies.
  • Premium - This plan—specifically for accredited investors—requires an initial investment of $100,000. “Premium” members have access to accredited-only investment opportunities and can have any issues attended to by the Investor Relations team.

CrowdStreet

Unlike Fundrise, CrowdStreet isn’t accessible to the average person; the platform is for accredited investors only. Besides this key difference, CrowdStreet only offers commercial real estate investment opportunities. It also requires a minimum investment of $25,000. However, anyone can make an account for free and look at the properties on CrowdStreet’s website.

How It Works

CrowdStreet allows its users to invest in real estate directly. They also vet all offerings it hosts thoroughly. Every investment opportunity will have project details, contact information, and more for your convenience. However, you should still take the time to do your own research on each opportunity before making an investment.

Some listings are for single buildings, whereas others may be for multiple properties. CrowdStreet also offers its own REIT. With a minimum buy-in of $25,000, you’ll be able to enjoy straightforward 1099 tax reporting at the end of the year. Although the platform doesn’t offer hundreds of different investment opportunities at one time, you’ll have plenty of viable options to choose from.

The Downside

Both Fundrise and Crowdstreet suffer from limited liquidity. Fundrise charges penalty fees for early redemption (withdrawal), and even reserves the right to refuse an early redemption. Although it’s unlikely you’ll run into this issue, it’s still something worth taking into consideration.

Crowdstreet’s REIT offerings are liquid assets, but most of its other offerings are not. Your money will be in for the duration of the investment, and it’s always possible that you will lose money. Fortunately, both Fundrise and CrowdStreet have made far more money than they have lost. Thus, you’ll likely make a profit at the end of your investment period.

Summary

Essentially anyone can use Fundrise, making it the ideal platform for most people. While CrowdStreet is limited to accredited investors only, you may be able to find more lucrative investments on this platform. The available opportunities on these platforms are constantly changing, so we recommend taking a look at both before making a move. Regardless, both are excellent ways to include real estate as part of your portfolio. Whether you choose Fundrise or CrowdStreet, the profit potential is there for the taking!

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