Arrived Homes vs Fundrise 2023: Which one should yo choose?

Disclosure: This is a testimonial in partnership with Fundrise & Arrived. We earn a commission from partner links on Modest Money.

Investing in real estate is a great way of generating passive income and accumulating wealth.

Real estate has always been a solid asset and should remain part of any investor’s overall financial plan.

But getting into traditional real estate is tricky. It requires large down payments, credit checks, and lengthy processes.

Thankfully all the above is becoming a thing of the past with online real estate investing.

Real estate investing platforms like Arrived Homes and Fundrise are creating new opportunities for investors to get into the market easier than ever.

Through these platforms, investors now have an easy way to start investing in real estate without the need for huge deposits.

These platforms also give you access to the best tools available to ensure you succeed. Their rise in popularity brings new competitors to the space each year.

Below is a guide to help you decide which platform is right for you.

Let Us Look At Some Comparisons:

Minimum Investment	$100	$10
Real Estate Assets	Single-Family Rental Homes, Vacation Rentals, Individual Properties	Commercial Properties, Apartment Complexes, Real Estate Investment Trusts
Horizon Considered	5-7 Years	5+ Years
Fees	3.5% One-Time Sourcing Fee	0.15% - 0.85% Annual Management Fee
Best Use	Short / Long-Term Investors	Long-Term Investors
Promotion	More Info	More Info
Modest Money Overall Rating	4.7 rating based on 5 ratings	4.9 rating based on 5 ratings

What is Fundrise?

Fundrise is a well established online real estate platform. Unlike other platforms such as Arrived Homes, where individual properties are the focus, Fundrise presents a different approach. It primarily offers real estate investment trusts, commonly known as eREITs.

For those diving into real estate investments, platforms like Fundrise provide a tangible advantage. For starters, the minimum investment is incredibly accessible. You can begin your investment journey with as little as $10. This makes the platform suitable for both novice investors and experienced investors looking to diversify their portfolios.

The beauty of Fundrise lies in its structure. Instead of handling rental properties directly and worrying about rental income, investors get a chance to buy into private commercial and residential properties, primarily through eREITs.

What are eREITs? Think of them as mutual funds but for real estate. They pool assets from various investors to invest in a diversified selection of real estate properties, aiming to generate passive income through rental income dividends and property appreciation.

One standout feature is its inclusivity. Fundrise is open to both accredited and non-accredited investors, democratizing the real estate investing landscape. Furthermore, non-accredited investors, who traditionally had fewer investment opportunities in the real estate market, now have the chance to gain exposure to this lucrative sector.

But why would an average investor choose Fundrise over other real estate investing platforms? The answer lies in its strategic approach. Once you sign up, the platform prompts you to outline your investing goals and risk tolerance.

Based on your individual investment goals, Fundrise then curates a selection of eREITs or other investment options that align with your objectives. Consistent returns are the aim. Investors can anticipate quarterly dividends, offering a predictable cash flow. It’s worth noting that like all investments, dividends are not guaranteed and can fluctuate.

The platform’s design is another plus. It’s intuitive and user-friendly, making the investment process straightforward. Whether you’re looking at single-family homes, commercial properties, or any other type of real estate, the platform streamlines the information, ensuring you’re well-informed before making investment decisions.

In conclusion, Fundrise stands out in the crowded field of real estate investment platforms by offering a hands-off, yet strategic approach to real estate. With a low minimum investment requirement, a focus on passive income, and an inclusive stance for both accredited and non-accredited investors, it’s a top choice for those looking to venture into real estate without the traditional hassles of property management.

What is Arrived Homes?

Arrived Homes has emerged as an intriguing newcomer in the real estate crowdfunding industry. Distinguishing itself from veterans like Fundrise, it offers investors the unique opportunity to invest in individual single-family rental homes.

In this model, investors can purchase fractional shares in these properties and, in return, earn dividends from the rent these homes generate. A property on Arrived Homes typically has a holding period of five to seven years, and given its inception in 2021, none have yet been sold.

An essential feature to note is that investors are essentially buying into an entity owning the real property. Once the initial offering wraps up for a home, this entity is designated to be taxed as a distinct Real Estate Investment Trust (REIT).

For those looking to get started without a substantial initial investment, Arrived Homes is attractive with its modest $100 minimum entry point. And, in terms of fees, it maintains transparency with a straightforward 1% annual fee. Among its advantages are the freedom to select specific rental homes for investment, quarterly dividends (provided one’s share is at least $5), and the relief of not having to manage the properties.

However, potential investors should be aware of its current limitations, notably the choice of only 28 properties, its brief track record given its 2021 foundation, and potential liquidity issues as there’s no guaranteed approval for withdrawal requests post the six-month mark.

What stands out about Arrived Homes is its commitment to guiding investments in top-performing real estate markets. Investors have the flexibility to channel their funds into long-term rental homes or diversify with short-term vacation rentals.

Arrived Homes simplifies the investment process by shouldering the responsibility of property selection, tenant vetting, and daily management. An innovative aspect of their model is the option for renters to invest, often leading to improved care for the property.

The ultimate goal of the platform is to deliver a consistent passive income stream, paid out quarterly, to its investors. In summation, while Arrived Homes presents a fresh perspective on real estate investment, thorough research and understanding are crucial before making any financial commitments.

Arrived Homes VS Fundrise: Determining Factors?

Let’s examine some key points that will help you determine which one is best for you and why they appeal to everyday investors.

Factor 1: Investment Minimums

You might be surprised by just how little upfront funds you need to start investing in real estate using an online investing platform.

For these two, you can get started for just $10 or $100.

Individual platforms will set their own minimums based on their users and what’s on offer.

It’s worth taking a closer look at these so you know exactly what you’re investing in.

Fundrise Is Preferable To Arrived Homes

• Fundrise lets you invest for just $10.
• Fundrise accepts accredited and non accredited investors.

Fundrise: Investment Minimums

You can get started with Fundrise for as little as $10. That minimum investment will then scale up depending on the account level you go for.

When comparing the two platform’s fees, both charge a similar asset under management fee of 1%.

But with Fundrise, there are no additional fees such as property management or source fees.

You can read our full Fundrise review here to learn more.

Arrived Homes: Investment Minimums

You can get started with Arrived Homes and start investing in real estate for just $100.

Most shares for any Arrived Homes investments start at $10 per share. You’ll see how many shares are available to be purchased on their website.

Other platforms often require tens of thousands of dollars of upfront investment.

Arrived Homes is a great platform for retail buyers looking to invest in real property.

You can read our full Arrived Homes review here!

Factor 2: Short-Term Income

When thinking about investing in real estate, most people usually consider buying a property as a long term investment.

It may take years to see a return on investment, right?

Online real estate investing platforms allow you to buy other real estate assets such as vacation homes. These investments allow you to start generating an immediate rental income.

No more 30 year mortgages.

Arrived Homes Is Preferable To Fundrise

• Arrived Homes provides short-term vacation rentals.
• The Arrived Homes rentals provide a consistent cash flow with 1-2 year leases.

Arrived Homes: Short-Term Income

Arrived Homes allows you to invest in vacation rentals to access rental income and long-term property value.

These vacation rental properties earn higher rates per night than traditional single family homes.

An Arrived Homes vacation rental property may bring up to 130% more income than a conventional long-term investment.

On top of all this, Arrived Homes provides quarterly dividends on this income.

Fundrise: Short-Term Income

If you’re looking for quick flips (6-12 months) then Fundrise might not be ideal for you.

This is because Fundrise usually holds its assets for around 5 years on average. This means keeping your money tied into Fundrise for the duration of the investment.

Fundrise imposes a 1% penalty on early exits since it takes a while for real estate developments to materialize.

Investors with short-term requirements may have an issue with this.

So, is your money trapped at Fundrise?

No, not at all!

Fundrise is still legit and the flagship fund offers quarterly redemptions without penalties.

Factor 3: Performance

Previous performance is always a factor when choosing the right platform for you.

Here’s how Arrived Homes and Fundrise stack up against each other.

Arrived Homes: Performance

Given its recent launch in 2019, Arrived Homes has an impressive track record. Arrived Homes rental properties have typically produced profits from rental income, equating to 2.4% – 7.9% yearly.

It has over 187 properties funded over 31 markets and a total of $68 million in property value. All these properties have passed through an elaborate vetting process as will any newcomers.
Learn More About Arrived Homes

Fundrise: Performance

The average annual Fundrise returns from 2017 through 2022 were between 5% and 23%.

Launched in 2017, Fundrise has an excellent history and currently boasts 371,000 active real estate investors contributing around $7 billion in transaction value and $226 million in net dividends.
Learn More About Fundrise

Arrived Homes vs. Fundrise: The Bottom Line

Fundrise and Arrived Homes share many similarities.

There’s no requirement that investors be accredited for either platform, and both have very low minimum initial investment requirements.

For investors who plan to start with simple single family investment properties but eventually move to more sophisticated real estate deals, Fundrise will be a better choice.

As your portfolio grows on Fundrise, you can start diversifying your portfolio by investing in commercial and multi-family properties.

Best of all, it’s very easy to use.

If you’re looking for steady dividends then Arrived Homes would be a good choice for that.

Both are great real estate investing platforms that are easy to use and suitable for beginners.