Fundrise vs RealtyShares 2023: Which one is a better platform?
As you know, Investing in real estate can be a profitable venture. But the unfortunate part is that it has traditionally required significant capital.
Thanks to the emergence of real estate crowdfunding platforms like Fundrise and RealtyShares –– these barriers to entry are no longer as obtrusive. Even with crowdfunding opening up real estate investment to those with less capital, it’s crucial to understand how these platforms compare before making your investment decision.
This article provides a detailed comparison of Fundrise and RealtyShares –– highlighting where each platform shines and where they fall short.
|Fundrise is Better for:||RealtyShares is Better for:|
|Lower Barriers to Entry for Real Estate Investments||Experienced Investors Interested in Individual Property Investments|
|Variety of Investment Options with eREITs and eFunds||Potentially High Returns Dependent on Individual Property Performance|
|Consistent Income Stream and Potential for Long-term Capital Appreciation||Real Estate Projects Investment for Accredited Investors|
Understanding the Platforms
Fundrise: Making Real Estate Investments Accessible
Fundrise is a real estate investing platform based in Washington D.C. Their goal is to make investing in high-quality real estate as easy as investing in the stock market. They have democratized the investment process –– allowing both accredited and non-accredited investors to start with a minimum investment as low as $10.
RealtyShares: Targeting Experienced Investors
RealtyShares is a real estate crowdfunding platform that connects individual investors with pre-vetted real estate projects. However, RealtyShares is not currently accepting new investors, making it a less accessible option compared to Fundrise.
|Service Type||Real estate investment platform||Real estate crowdfunding platform|
|Customer Support||Email and comprehensive FAQ section||LImited|
|Best Use||Individuals looking for an affordable and easy-to-use platform to invest in a diversified real estate portfolio.||Experienced investors looking to invest in individual properties.|
|Modest Money Overall Rating|
Factor 1: The Investment Opportunities
Fundrise: Wide Array of Investment Opportunities
- RealtyShares: Focused on Individual Property Investments
- Fundrise provides a diverse selection of real estate projects
As an investor, you should always consider the type of investment opportunities offered on each platform. The variety, accessibility, and quality of these opportunities can greatly affect the performance of your portfolio.
Fundrise: A Wide Range of Options
Fundrise offers a wide range of investment options, including eREITs and eFunds, which consist of a diversified portfolio of properties across the United States. By providing a wide variety –– Fundrise gives investors more control and flexibility over their investments.
RealtyShares: Limited to Individual Property Investments
RealtyShares, on the other hand, focuses on individual property investments rather than diversified portfolios. This might appeal to some investors, but the lack of options could limit the platform’s versatility and increase risk exposure.
Fundrise is better for:
- Investors who want a variety of real estate projects.
- Individuals looking for an affordable way to invest in real estate.
- Those who want an easy and user-friendly platform.
RealtyShares is better for:
- Individuals seeking out individual properties to invest in.
Factor 2: Investment Returns
Fundrise: Consistent Income Stream and Appreciation Potential
- RealtyShares: Variable Returns Depending on Individual Property Performance
- Fundrise generates steady income through dividends and share price appreciation
An essential aspect of any investment is the return it provides. In real estate crowdfunding, returns can come in various forms such as rental income, capital appreciation, or dividends.
Therefore, understanding how each platform generates returns for its investors can help you align your investment with your financial goals.
Fundrise: Consistent Income Stream
Fundrise investments generate income through quarterly dividends and the appreciation of share price, offering investors a consistent income stream. Their track record is impressive –– with average returns surpassing those of traditional investment avenues like mutual funds.
If you’d like a deeper look into all things Fundrise, check out our comprehensive review of the platform.
RealtyShares: Dependent on Property Performance
Returns from Realty hares are dependent on the performance of individual properties, which introduces more variability and risk. Investors might enjoy high returns from a successful property, but the lack of diversification could also lead to losses if a property performs poorly.
Fundrise is better for:
- Investors looking for consistent and passive income.
- Those who want potential for long-term capital appreciation.
- Investors seeking diversification away from the stock market.
Factor 3: Fee Structures — Clarity and Affordability Matter
Fundrise: Transparent and Affordable Fee Structure
- RealtyShares: Complex and Higher Fees
- Fundrise is known for its competitively low and transparent fees
Fees can significantly impact your overall returns in real estate crowdfunding. The affordability and transparency of the fee structure are critical factors that can affect your investment decisions. You definitely need to understand exactly what you’re paying for and how it will affect your bottom line.
Fundrise: Transparent and Affordable
Fundrise charges an annual asset management fee of 1%. They are transparent about these fees, which are competitively low –– making the platform a cost-effective choice for investors.
RealtyShares: Higher and More Complex Fees
RealtyShares’ fee structure can be more complex, with charges including a 1-2% management fee and other costs related to the individual investments. These higher and less transparent fees can erode returns and make it difficult for investors to calculate their net profits.
Fundrise is better for:
- Investors who appreciate clear, upfront pricing.
- Those who want to maximize their returns by minimizing fees.
Factor 4: Customer Support — Accessibility and Responsiveness
Fundrise: High-Quality and Responsive Customer Support
- RealtyShares: Limited Support Options
- Fundrise offers robust customer support with various channels of communication
When investing in any platform, having accessible and responsive customer support is crucial. It provides a safety net for investors –– especially for those who are new to the platform or to real estate investing in general. It’s therefore important to evaluate the quality of customer support offered by each platform.
Fundrise: High-Quality Support
Fundrise is known for its high-quality customer support. They offer email support and a comprehensive FAQ section on their website that covers most concerns and queries.
Realty Shares: Limited Support Options
RealtyShares also provides customer support but with more limited options. This could be a disadvantage for investors who prefer having various channels of communication.
Fundrise is better for:
- Investors who value responsive and accessible customer support.
The Verdict: Fundrise Takes the Win
Considering the accessibility, investment options, potential returns, fee structures, and customer support –– Fundrise comes out as the clear winner in this comparison. Their focus on providing an affordable and easy-to-use platform for average investors to access high-quality real estate projects makes them a compelling choice in the newfound world of real estate crowdfunding platforms.
To get started with Fundrise and explore the potential for generating passive income through real estate investments, click here.
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