Comparing Investments: A Deep Dive into Fundrise and VNQ

Let’s simplify this:

**Investing in Real Estate: A Comparison between Fundrise and VNQ**

Are you considering diving into the world of real estate investing? You don’t need a fortune to get started. Thanks to platforms like Fundrise and VNQ, anyone can dip their toes into real estate investing, even if they have modest funds.

Fundrise, created in 2012, is an online investment platform. It lets people pool their money to fund commercial and private real estate projects, like condos and office spaces. The average annual return of investments could range between 10 and 14%, which attracts both beginners and seasoned investors. It offers investing through eREITs and eFunds, which are basically digital versions of Real Estate Investment Trusts (REITs).

On the other hand, VNQ is a real estate index fund offered by the well-known Vanguard. Associated with low-cost investing, VNQ fits perfectly into the long-term philosophy of Vanguard. Unlike Fundrise, VNQ shares can be bought and sold just like any other stock, providing greater flexibility.

However, these platforms are different. While Fundrise offers eREITs, VNQ provides publicly traded REITs. Non-Traded REITs like Fundrise are directly offered to investors and can only be sold back to the company. In contrast, Publicly traded REITs like VNQ let you buy and sell shares just like stocks.

Fundrise offers five membership tiers, namely Starter, Basic, Core, Advanced, and Premium. Each tier has different benefits and minimum investment requirements. Investments start as low as $10 and go up to $100,000 for accredited investors.

VNQ, on the other hand, operates more like a traditional brokerage platform, offering financial education to help set your financial goals. VNQ shares are direct and simple to purchase.

Investing in either platform has its pros and cons. Fundrise allows a low investment threshold and has a transparent fee structure, but offers less liquidity. VNQ does not require buy or sell fees and has a low expense ratio, but its average returns might be less consistent compared to Fundrise.

Here’s a snapshot of their performances:
– Fundrise annual returns: 2015 – 12.42%, 2016 – 8.76%, 2017 – 11.44%, 2018 – 9.11%, 2019 – 9.47%, 2020 – 7.3%, 2021 – 23%.
– VNQ annual returns: 2015 – 2.4%, 2016 – 8.5%, 2017 – 5.0%, 2018 – -6.0%, 2019 – 28.9%, 2020 – -4.7%, 2021 – 40.4%.

Remember, the choice between Fundrise and VNQ depends on your personal goals, strategies, and investment preferences. Fundrise can be a good start if you’re new to investing, whereas VNQ might appeal to those looking for dividends and long-term growth.

Regardless of your choice, always remember to make well-informed and careful investment decisions.