Crowdfunding platforms like Fundrise and CrowdStreet have made it easier and more affordable to invest in real estate. With both of these platforms, you’ll get a lot more investment options, which can help you tailor your portfolio to your specific preferences and goals. But which platform is better: Fundrise vs. CrowdStreet? Here’s everything you need to know to decide for yourself.
What Are Real Estate Crowdfunding Platforms?
With real estate crowdfunding platforms like Fundrise and Crowdstreet, you can invest in a commercial or residential property without owning the entire thing yourself. Instead, you’ll be buying shares in the property itself. You’ll get to help fund a new development or renovation project, in exchange for income.
With Fundrise, you’ll be investing in properties being developed by the company itself. Fundrise is currently offering two investment plans with monthly distributions starting around 6% Once your account reaches $1,000, your money will continue to roll over into future investments until it reaches $10,000. The ongoing fee is only 0.85% per year
On the other hand, you can invest in existing properties with CrowdStreet. The company will post an investment opportunity on their website, and then you’ll answer a questionnaire to determine whether it’s right for your portfolio. To get started, you need at least $500. Once your account reaches $1,000, your money will continue to roll over into future investments until it reaches $10,000. The ongoing fee is only 0.95% per year.
Fundrise Vs. CrowdStreet
What Is Fundrise?
Fundrise is a Washington, DC-based real estate investment firm founded in 2012.
Fundrise has raised over $4 billion in real estate since it began operations in 2012. Today, they handle more than $1 billion of stock on behalf of more than 210,000 individual investors.
Perhaps the most apparent evidence of this investor-first mentality is that Fundrise is an investor-owned firm, allowing investors in real estate portfolios to become company shareholders through their own iPO model.
What Is CrowdStreet?
Tore Steen and Darren Powderly created CrowdStreet in order to provide individuals with improved access to real estate, which is the third-largest asset class in the United States. Crowd
Unlike standard real estate investment firms, CrowdStreet believes that you don’t need a minimum of $20,000 to get started investing in property. To help investors who might not have that much capital on hand, CrowdStreet breaks large commercial or residential properties into smaller shares with the goal of making high-quality investments available to everyone.
But CrowdStreet doesn’t just help investors diversify their portfolios by investing in property; the platform also offers opportunities for investors who want access to debt or preferred equity in some of the biggest real estate projects in America. With this platform, you can invest in different types of properties that range from data centers in Texas to the John Hancock in Boston.
Key Differences Between Fundrise and CrowdStreet
Both real estate crowdfunding platforms help investors diversify their portfolios by putting their money into commercial or residential properties without owning the entire thing themselves. On both sites, you’ll be buying shares in the property itself. You’ll get to help fund a new development or renovation project, in exchange for income.
With Fundrise, you’re investing in properties being developed by the company itself, which means they have stricter requirements when accepting investments. For example, each potential property has to pass their strict due diligence requirements based on 12 different criteria, including credit risk and vacancy rates. Once your account reaches $1,000, your money will continue to roll over into future investments until it reaches $10,000. There’s no additional fee beyond that.
On the other hand, you can invest in existing properties with CrowdStreet. And if you don’t have $1,000 to start with, they’ll let you make smaller investments ($500). The company will post an investment opportunity on their website, and then you’ll answer a questionnaire to determine whether it’s right for your portfolio.
Once your account reaches $1,000, the money will continue to roll over into future investments until it reaches $10,000. You’ll then pay an ongoing fee of 1% per year. The minimum investment is also significantly lower: only $500.
CrowdStreet Vs. Fundrise Conclusion
Although both CrowdStreet and Fundrise claim to be the best real estate investment platform around, we definitely recommend one over the other depending on the goal.
The main difference between these two real estate crowdfunding platforms is that Fundrise focuses on investing in upcoming properties developed by the same company, while CrowdStreet makes it easy for customers to invest in existing ones. If you’re new to the world of real estate investment, this can be particularly beneficial since you’ll have more opportunities to diversify your portfolio.
