Choosing Between REITs and Fundrise: Discover the Perfect Fit for Your Investment Journey

Are you trying to decide between investing in a Real Estate Investment Trust (REIT) and Fundrise? Let’s simplify things for you.

Fundrise is essentially an online platform that allows anyone to invest in real estate with as little as $10. It was started in 2010 by Ben and Dan Miller, and since its launch, it’s managed to attract almost 2 million investors. They’ve changed the game by providing the average investor the chance to get into the booming real estate business. Not to mention, this American-based platform also lets you choose from four distinct investment strategies based on your risk tolerance and investment goals.

Now let’s talk about REITs – these are investment companies that pool together funds from multiple investors to invest in lucrative properties that are usually the domain of the wealthy. They come in two types, equity and mortgage REITs. Equity REITs centre around profits made from rental income and sale of properties like office buildings and apartments. Mortgage REITs divert their investments towards real estate debt and, while they might offer higher returns, they also carry more risk.

Confused about the differences between Fundrise and REITs? It’s all about liquidity. Normally, REITs are publicly traded and can be bought or sold just like shares in the stock market. In contrast, Fundrise shares aren’t listed on any exchange, and if you wish to sell them, you need to send a liquidation request. But Fundrise has its perks. It offers higher returns, lower investment minimums, and better customization. Plus, they even have an option for upgrading your portfolio strategy for just $10 a month.

Whether you choose a private REIT like Fundrise or a public one, you need to know your real estate types. Broadly, they fall into five categories – multifamily and residential, commercial, industrial, farmland, and the others. Each comes with its own risks and rewards, and knowing them can help you refine your investment strategy.

One last thing – did you know that both Fundrise and REITs have outperformed the S&P 500 in the last decade? Yes, and they’re known to be a sound hedge against inflation. REITs are especially effective in this regard, with mortgage REITs being a great example.

Now, you might be asking, “Is Fundrise better than a REIT?” Well, it depends on your goals. Fundrise does offer a higher annual yield, lower minimum investments, and lower fees. It’s a great start for beginners and those not bothered by the lower liquidity of private real estate. Of course, you need to be prepared for a long-term investment horizon.

To sign up with Fundrise, just head to their website, and within 5 minutes, you can be an investor. It caters to both accredited and non-accredited investors in the U.S. User reviews are positive too, praising its user-friendly app and good returns.

There you go! Investing in real estate isn’t exclusive to the wealthy anymore. With platforms like Fundrise, anyone can get a taste of this asset class starting from just $10.

Remember though, before investing, check if your investment type is regulated, know your potential taxes on dividends, and always aim for generating passive income through proper financial planning.