Investing in real estate is a great way of generating passive income and accumulating wealth.
Real estate has always been a solid asset and should remain part of any investor’s overall financial plan.
But getting into traditional real estate is tricky. It requires large down payments, credit checks, and lengthy processes.
Thankfully all the above is becoming a thing of the past with crowdfunding.
Crowdfunding platforms like Arrived Homes and Fundrise are creating new opportunities for investors to get into the market easier than ever.
|Arrived Homes Is Better For:||Fundrise Is Better For:|
|Medium Risk Tolerance||High-Risk Tolerance|
|Non-Accredited Investors||Accredited Investors|
|Low Minimum Investment||Low Fees|
|Short / Long-Term Investors||Long-Term Investors|
|Knowledgeable Investors||Novice Investors|
|Superior Screening Of Tenants||Wide Range Of Property Selection|
|Redemption Options||Traditional / Self-Directed IRAs|
Through these platforms, investors now have an easy way to start investing in real estate without the need for huge deposits.
These platforms also give you access to the best tools available to ensure you succeed. Their rise in popularity brings new competitors to the space each year.
Below is a guide to help you decide which platform is right for you.
Let Us Look At Some Comparisons:
|Real Estate Assets||Single-Family Rental Homes, Vacation Rentals, Individual Properties||Commercial Properties, Apartment Complexes, Real Estate Investment Trusts|
|Horizon Considered||5-7 Years||5+ Years|
|Fees||3.5% One-Time Sourcing Fee||0.15% – 0.85% Annual Management Fee|
|Best Use||Short / Long-Term Investors||Long-Term Investors|
|Promotion||More Info||More Info|
|Modest Money Overall Rating|
Arrived Homes VS Fundrise: Determining Factors?
Let’s examine some key points that will help you determine which one is best for you and why they appeal to everyday investors.
Factor 1: Investment Minimums
You might be surprised by just how little upfront funds you need to start investing in real estate using a crowdfunding platform.
For these two, you can get started for just $10 or $100.
Individual platforms will set their own minimums based on their users and what’s on offer.
It’s worth taking a closer look at these so you know exactly what you’re investing in.
Fundrise Is Preferable To Arrived Homes
- Fundrise lets you invest for just $10.
- Fundrise accepts accredited and non accredited investors.
Fundrise: Investment Minimums
You can get started with Fundrise for as little as $10 with their Starter membership. That minimum investment will then scale up depending on the account level you go for.
Fundrise offers five membership types.
- Starter ($10)
- Basic ($1,000)
- Core ($5,000)
- Advanced ($10,000)
- Premium ($100,000)
When comparing the two platform’s fees, both charge a similar asset under management fee of 1%.
But with Fundrise, there are no additional fees such as property management or source fees.
You can read our full Fundrise review here to learn more.
Arrived Homes: Investment Minimums
You can get started with Arrived Homes and start investing in real estate for just $100.
Most shares for any Arrived Homes investments start at $10 per share. You’ll see how many shares are available to be purchased on their website.
Other platforms often require tens of thousands of dollars of upfront investment.
Arrived Homes is a great platform for retail buyers looking to invest in real property.
You can read our full Arrived Homes review here!
Factor 2: Short-Term Income
When thinking about investing in real estate, most people usually consider buying a property as a long term investment.
It may take years to see a return on investment, right?
Crowdfunding platforms allow you to buy other real estate assets such as vacation homes. These investments allow you to start generating an immediate rental income.
No more 30 year mortgages.
Arrived Homes Is Preferable To Fundrise
- Arrived Homes provides short-term vacation rentals.
- The Arrived Homes rentals provide a consistent cash flow with 1-2 year leases.
Arrived Homes: Short-Term Income
Arrived Homes allows you to invest in vacation rentals to access rental income and long-term property value.
These vacation rental properties earn higher rates per night than traditional single family homes.
An Arrived Homes vacation rental property may bring up to 130% more income than a conventional long-term investment.
On top of all this, Arrived Homes provides quarterly dividends on this income.
Fundrise: Short-Term Income
If you’re looking for quick flips (6-12 months) then Fundrise might not be ideal for you.
This is because Fundrise usually holds its assets for around 5 years on average. This means keeping your money tied into Fundrise for the duration of the investment.
Fundrise imposes a 1% penalty on early exits since it takes a while for real estate developments to materialize.
Investors with short-term requirements may have an issue with this.
So, is your money trapped at Fundrise?
No, not at all!
Fundrise is still legit and the flagship fund offers quarterly redemptions without penalties.
Factor 3: Performance
Previous performance is always a factor when choosing the right platform for you.
Here’s how Arrived Homes and Fundrise stack up against each other.
Arrived Homes: Performance
Given its recent launch in 2019, Arrived Homes has an impressive track record. Arrived Homes rental properties have typically produced profits from rental income, equating to 2.4% – 7.9% yearly.
It has over 187 properties funded over 31 markets and a total of $68 million in property value. All these properties have passed through an elaborate vetting process as will any newcomers.
The average annual Fundrise returns from 2017 through 2022 were between 5% and 23%.
Launched in 2017, Fundrise has an excellent history and currently boasts 371,000 active real estate investors contributing around $7 billion in transaction value and $226 million in net dividends.
Arrived Homes vs. Fundrise: The Bottom Line
Fundrise and Arrived Homes share many similarities.
There’s no requirement that investors be accredited for either platform, and both have very low minimum initial investment requirements.
For investors who plan to start with simple single family investment properties but eventually move to more sophisticated real estate deals, Fundrise will be a better choice.
As your portfolio grows on Fundrise, you can start diversifying your portfolio by investing in commercial and multi-family properties.
Best of all, it’s very easy to use.
If you’re looking for steady dividends then Arrived Homes would be a good choice for that.
Both are great real estate crowdfunding platforms that are easy to use and suitable for beginners.
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