So, where should you invest your money to get maximum profits? Some people might say you should invest in stocks, while others might recommend cryptocurrency. However, one of the steadily lucrative forms of investment has been real estate. You can’t really go wrong with real estate when it comes to growing your hard-earned money. On average, the real estate industry has performed better than stocks over the last 30 years.
REITs or real estate investment trusts are one excellent avenue for both newbie and small investors. And, the good news is that there are now online platforms that simplify REIT investing–these are the online real estate crowdfunding services.
One of the best online real estate crowdfunding platforms in the market today is Fundrise. With Fundrise, the minimum investment is just $500, so it’s perfect for investors who are still testing out the waters of this specific industry. But, does this platform stand up to the hype? Is it any good? That’s what you’re going to find out in this post.
Fundrise: What Is It?
As already mentioned, Fundrise is an online platform for real estate crowdfunding, and it’s one of the pioneers of this system. It allows investors to actually profit from several real estate offerings for just a few hundred bucks. It had already experienced significant successes since its founding back in 2010.
Fundrise has invented the eREIT or the electronic real estate investment trust. It’s an innovation that shook the entire crowdfunding space in 2015. If you’re familiar with mutual funds or exchange-traded funds, they actually work in the same way as eREITs. That said, The eREITs brought commercial real estate investing closer to the masses.
Fundrise: How Does It Work?
You’ll invest either in one of the core portfolio plans or in the low-minimum portfolio for starters when you decide to sign up for Fundrise. Your money will be allocated to an assortment of eREITs and eFunds that consist of private assets located across the United States. The specific allocation of your investment depends on your personal needs, and Fundrise will tailor it for you.
There are two ways of receiving payouts from Fundrise. First, quarterly dividend distributions. Second is asset value appreciation, which is determined at the end of the investment term of that specific asset.
Please keep in mind, however, that results will actually vary according to the plan you have. Also, the nature of Fundrise’s portfolio is long-term, so don’t expect the asset appreciation to happen overnight.
The eREITs or electronic real estate investment trusts and eFunds are the main products of Fundrise. Take a closer look at them below.
- eREITs – eREITs work the same way as REITs, albeit less liquid since they aren’t like stocks or bonds that are publicly traded. The eREITs of Fundrise make use of crowdfunding in acquiring, managing, and selling properties.
- eFunds – This offering is exclusive only through Fundrise. It’s a diversified portfolio consisting of residential real estate assets that are professionally managed.
Through Fundrise, you can open self-directed IRAs or individual retirement accounts, entity accounts, trusts, joint accounts, and individual taxable accounts. If you want to lower your tax bill, you would surely love an individual retirement account since placing your real estate investments inside it means sheltering yourself from tax.
Can Fundrise Help You Get Maximum Profit From Your Money?
New investors in real estate crowdfunding platforms, like Fundrise, will surely ask: “Can I get maximum profit from my money here?” Well, yes, you can. As previously mentioned, aside from paying dividends, the real estate assets you’re investing in through Fundrise also appreciates over time.
Returns come from your portfolio’s individual real estate assets, particularly from the property value’s potential appreciation, rental income collected, and interest. You’re entitled to receive your pro-rata portion of these returns as a shareholder.
As long as you invest your money for more than five years (since investing in real estate assets is a long-term game), you can safely expect your money to grow well with Fundrise.
How Do Investors Get Paid?
Fundrise investors get paid in two ways:
- Quarterly Dividends – Investors will receive dividend distributions after the end of every quarter. Dividends are income from the rental properties. You can either reinvest them back into Fundrise or have them deposited directly into your personal bank account.
- Share Value Appreciation – After the property you invested in gets sold, you’re going to receive proceeds from it. Please take note, however, that this can take several years since appreciation will only be paid when the investment ends. Real estate investing is a long-term game, and while waiting for several years before earning from the appreciation might sound too long, the ROI will be worth it.
In 2019, Fundrise recorded an average return of 9.47%, which is actually still pretty good despite being slightly lower than the previous years. Fundrise returns show the platform’s consistency, making it a highly reliable option for real estate investors. If you’re on the lookout for an investment that will get you max profit from your money, Fundrise should really be at the top of your list.