Fundrise vs Crowdstreet
Both Fundrise and Crowdstreet give investors a way into the real estate market, but are the platforms equal? They are crowdfunding platforms for real estate, and this type of service is growing in popularity and adding property to your investments can really diversify your portfolio. There is no doubt that there are benefits to real estate investing, and there are differences between these services. Which is the right one for you? Let’s find out.
|Fundrise is Better For:||Crowdstreet is Better For:|
|A lower minimum investment||No management fees|
|Newer investors||Recommended for accredited investors or those with a high net worth|
|Non-accredited investors||Those with self-directed IRAs|
|Mobile app access||Easy-to-use website|
Fundrise has various investment plans, with the most expensive one reaching over $100,000 in terms of minimum investment, but the most affordable Starter option is only $10! This number is more attractive than $25,000, which is Crowdstreet’s minimum investment.
It’s no surprise that Crowdstreet requires investors to be accredited with a minimum investment threshold like that, but they don’t take a general management fee. Fundrise will take a 0.15% advisory fee and a 0.85% annual fee, which equals 1% of your assets.
Fundrise and Crowdstreet offer very similar account types, which are individual, joint, entity, and trust accounts. Where they differ is the IRAs. While they both offer it, Crowdstreet’s are self-directed.
Let’s take a more detailed look at the comparison:
|Minimum Investment||$10 with the Starter Plan||$25,000|
|Accredited Investor Requirement||No||Yes|
|Fees||1% total||No general management fee|
|Account Types||Individual, joint, trust, entity, IRA||Individual, joint, trust, entity, self-directed IRA|
|Investment Types||REITs (Real Estate Investment Trusts) and proprietary funds||Mixed portfolios, proprietary funds, and individual deals|
|Modest Money Overall Rating|
Fundrise VS Crowdstreet: Determining Factors
What do the returns look like? That is investors’ biggest concern, and we believe it plays a significant role in whether or not a real estate investment platform is legit. Let’s take a look at the biggest determining factors of Fundrise VS Crowdstreet.
Factor 1: Cost
The cost of services is usually at the forefront of every consumer’s mind. We know that Fundrise charges a total of 1% of your assets annually, which can be a lot if you have a large investment capital. Crowdstreet is clearly the winning contender in the aspect of cost because they do not charge an investment fee (you really can’t top that).
Factor 2: Investments
Just looking at the options alone, Crowdstreet gives access to more types such as REITs and individual deals. Fundrise is more focused on single-family and stabilized commercial properties, but they have REITs as well.
Factor 3: Accreditation
You must be an accredited investor (an individual who has an annual income of $200,000 or over, a couple with an annual household income of $300,000 or over, or an individual or dual net worth of over $1,000,000) to sign up with Crowdstreet, while Fundrise has no such restrictions and is open to investors with lower net worths.
Factor 4: Minimum Investments
You need at least $25,000 to invest with Crowdstreet, which makes sense why you would need to be accredited (it’s a hefty sum). Fundrise offers investors more options. You can get a low minimum investment amount with the Starter plan at only $10. Of course, you can opt for premium plans that can go all the way up to a $100,000 minimum.
Factor 5: Returns
Can these crowdfunding real estate investment sites really earn you a good return? Let’s look at Fundrise first. If we go back a few years to when the platform really got its foothold in 2014, the returns have been anywhere between 8% to 12% up to 2019. We know that 2020 and a couple of years after are outliers due to the instability of the economy and the global pandemic.
Keep in mind that no investment platform will really guarantee a rate of return because they all come with some risk. You could profit one year and take a loss in another.
Crowdstreet has an internal rate of return (IRR) at a higher rate than Fundrise up to 20% after the hold period.
The Bottom Line
Which is better, Fundrise or Crowdstreet? There isn’t a better platform, just one that’s more right for you. Fundrise is suggested for people without a hefty amount looking to get into the real estate market and who are not accredited investors. Even if you are an accredited investor, Fundrise can still be a good choice for its eFunds. Crowdstreet is for people who have a bit more to play with and there are no fees, which is a definite win. Find out more about what Fundrise can provide or click here if you prefer Crowdstreet.