Yieldstreet Vs Fundrise 2023: Which real estate platform is better?
|By: Jeremy Biberdorf|
Disclosure: This is a testimonial in partnership with Fundrise & Yieldstreet. We earn a commission from partner links on Modest Money.
With investors experiencing high volatility in the markets, some are now looking for alternative avenues to invest their money. Examples of alternative investments include REITs, unique artwork, and precious metals.
Both Yieldstreet and Fundrise provide a quick and easy way to start investing in real estate and alternative avenues with little to no experience.
If you’re searching for a platform to make alternative investments with minimal investment then read on.
|Yieldstreet is Better for:||Fundrise is Better for:|
|Seasoned investors making over $200,000 a year||Passive investors and novice investors who make less than $200,000 a year|
|Investors aiming to expand beyond equities and bonds in their portfolio||Investors seeking an inexpensive way to get started in real estate investing|
|Asset-based investment||Flexible investment options|
|Short term investment||Long term investment|
|Moderate Risk Tolerance||Higher Risk Tolerance|
So, how do you choose which one is right for you?
Let’s take a closer look at Yieldstreet vs Fundrise and compare some core features that will help you decide for yourself.
Let’s look at some comparisons:
|Minimum Investment||$2,500 / Growth & Income REIT $5,000||$10|
|Available Assets||Real Estate Properties, Legal Finance, and Asset-Based Investments||REITs (Real Estate Investment Trusts) and proprietary funds|
|Fees||1% – 4% Annual Management Fee||1% total|
|Current Promotion||More Info||More Info|
|Modest Money Overall Rating|
What is Yieldstreet?
YieldStreet primarily serves as a debt crowdfunding platform with a significant emphasis on real estate investments. For those considering diving into their offerings, there are a few things to note.
Most of the investment opportunities on YieldStreet cater to accredited investors, which means a person would typically need a higher income or net worth to participate. A notable exception is their Prism Fund. This fund provides a more accessible entry point for non-accredited investors with a minimum investment of $5,000.
After investing in YieldStreet’s real estate projects, your funds are essentially committed for the duration of the investment term. There’s no secondary market where you can sell off your securities, meaning an investor’s money could be tied up for several years.
YieldStreet’s fee structure can vary, but on an annual basis, fees might range between 0% and 2.5%. The specifics can always be found on the offering page of each individual investment. When it comes to profits, the structure is tiered. Up to a 15% return, all profits are channeled to the investors. Beyond this point, profits are divided, with 85% going to the investors and the remaining 15% to the platform’s managers.
Joining YieldStreet is quite straightforward. A simple sign-up process asks a few questions to ascertain your investor status and determine if you fall under the accredited investor category.
There are some potential drawbacks to consider. Some investors might find the platform’s fees steeper than those on other platforms. The absence of liquidity, given there’s no secondary market, might be restrictive for those looking for shorter investment terms. And while loans typically come with collateral as a safety net, there’s still an inherent risk with borrowers defaulting. Plus, even though the Prism Fund is open to all, many of the real estate investment opportunities lean heavily towards accredited investors.
To wrap up, YieldStreet presents an intriguing avenue for those keen on real estate investments. However, potential investors should weigh the fees, risks, and liquidity constraints before making a commitment.
What is Fundrise?
Fundrise is a prominent real estate investing platform, offering a wide range of real estate assets for both accredited and non-accredited individual investors. Through this platform, retail investors get an opportunity to delve into real estate investment trusts (REITs), an area often considered an alternative asset class compared to the traditional stock market investments.
The platform is designed to cater to various investment goals. Investors can select portfolios based on their risk tolerance, ensuring that their investment strategy aligns with their long-term growth aspirations.
With Fundrise, the initial investment is kept low, allowing beginner investors to participate with as little as $10. This approach breaks down barriers, making real estate investing more accessible than ever.
One highlight of Fundrise is its emphasis on purchasing undervalued real estate properties, enhancing them, and then strategically deciding whether to flip for a profit or retain for higher annual return. This approach diversifies their portfolio of properties and offers individual investments in various real estate projects.
Potential investors should be wary, as like many alternative investment options, this is an illiquid investment. The platform may tie up funds for several years.
The decision between YieldStreet vs Fundrise can be challenging, as both platforms have their merits and limitations. While YieldStreet delves deeper into various alternative asset classes, including marine vessels and legal finance, Fundrise stays rooted in the real estate market.
Yieldstreet Vs. Fundrise: Determining Factors?
When people look at Fundrise competitors they are usually looking at three main determining factors.
These are investing styles, expected returns, and price. An investor is able to decide if a platform like Fundrise is legit or not quickly based on these three factors.
Here’s how Yieldstreet vs Fundrise compare below.
Factor 1: Investing Styles
Both Yieldstreet and Fundrise platforms offer affordable ways for the “ordinary person” to make passive income or invest for long-term development.
Online real estate investing platforms are now very popular which means individual investors have options. It would be best if you determined which platform is best for you based on your objectives and budget.
Yieldstreet Investment Style Is Preferable To Fundrise If You Like
- A Diversified portfolio other than real estate
- An Easy-to-use platform
- A High potential return and income
- Are a well-established investor with lots of cash
Yieldstreet Investing Style
Yieldstreet provides its users with curated investment opportunities in alternative investments such as commercial real estate, marine investments, and artwork.
By partnering with diverse companies, Yieldstreet gives you the power to build your own portfolio of custom products and services.
These alternative types of investments were previously only accessible to institutions and the wealthy.
Yieldstreet does mainly target investors who have a six-figure portfolio and would like to diversify beyond what an ordinary brokerage can offer.
Fundrise Investing Style
Fundrise makes it easy and affordable for investors to buy into real estate without having to spend a lot of money upfront.
In fact you can get started with as little as $10.
All you need to do is choose your desired portfolio management approach. After that, the Fundrise team will manage your investment portfolio.
That’s it, you’re done. Sit back and let Fundrise continue to look for and buy new assets for your diversified portfolios.
Factor 2: Cost
The cost of any service is usually the first thing investors look at. Here’s how these two stack up against each other.
Fundrise 1% Fee Structure Is Lower Than Yieldstreet’s Potential 4%
Fundrise charges a 1% annual fee for most of its users. A portion of that fee goes towards:
- Ongoing project management
- Dividend performance reporting, reinvesting, and distribution
- Customer support and relations
Yieldstreet’s yearly management fee can range anywhere from 0% up to 2.5% on average and also offer the possibility of investing with flat annual fees.
These are detailed on their website and differ between the products offered.
Investors may also be required to pay annual fund fees, depending on the legal structure of the offering.
Fundrise charges a 1% annual fee on users’ accounts with an additional fee structure depending on what happens with your investment.
- When Fundrise acquires a new asset, it charges an origination fee ranging from 0 to 2% of the purchase price.
- In the first five years after investing, shares redeemed early are subject to an early redemption fee of one percent.
- IRA self-direction fees: $125 a year to Millennium Trust Company
Factor 3: Performance
It’s a good idea to check the past performance of any investment platform before investing any cash.
Here is what you can expect when investing in Yieldstreet or Fundrise:
Yieldstreet anticipates returns ranging from 8% to 20%. They turn down more than 90% of the proposals brought to the platform which allows them to maintain and claim such high levels of returns.
Yieldstreet’s service provides substantial returns but you’re not guaranteed success.
Learn More About Yieldstreet
Fundrise has an average cumulative net return rate of 60.4%. Between the years 2017 and 2021, its average annual return rates varied between 7.3% and 22.9%
These figures assume that you reinvest any dividends from Fundrise back into Fundrise.
Learn More About Fundrise
Yieldstreet vs. Fundrise: The Bottom Line
Yieldstreet and Fundrise are very unique in their own rights. Picking one based on your investment strategy and experience is your best bet.
If you’re an Accredited Investor or if you want access to a broader range of investments, Yieldstreet is right for you.
You’ll be better off going with Fundrise if you’re looking for an investment strategy that allows you to “set it and forget it,” in addition to having lower fees.
How Do I contact Yieldstreet?
Yieldstreet provides fundamental customer support, accompanied by a FAQ segment on their site.
For inquiries that require more in-depth answers than the standard ones, they also share a contact email and phone line.
Yieldstreet Support Details: Phone: 844-943-5378 Email: firstname.lastname@example.org
How Do I contact Fundrise?
You can use a contact form or send an email to email@example.com. You can also call them at (202) 584-0550. They’re available from 9:00 AM to 5:00 PM ET, Monday to Friday, except on public holidays.
How Much Money Can I Make With Fundrise?
In the past six years, Fundrise portfolios have seen an average yearly return of 5.3%. Forecasts for the upcoming seven years suggest that if you begin investing in real estate assets now, the expected average annual yields could be:
- Over 20% after the first 2 years
- Over 46% by the end of year 4
- Over 78% by the conclusion of year 6.
How Much Money Can I Make With Yieldstreet?
The seven top-performing asset categories on Yieldstreet, on average, are:
Private lending: 8.2%
Short term notes: 4.7%.
Related Real Estate Investing Reviews:
- Arrived Homes Review
- Baselane Review
- BirdDogBot Review
- Buildium Review
- CrowdStreet Review
- Doorloop Review
- Doorvest Review
- EquityMultiple Review
- FarmTogether Review
- First National Realty Partners Review
- Foreclosure.com Review
- Fundrise Review
- Groundfloor Finance Review
- Leadflow Review
- Lofty AI Review
- Mashvisor Review
- Realeflow Review
- RealtyMogul Review
- RentRedi Review
- Streitwise Review
- Tellus Review
- Trion Properties Review
- Yieldstreet Review
- Best Real Estate Crowdfunding Platforms
- Best Fractional Real Estate Investing Companies