Optimistic About Real Estate Investing
The next few years look promising for real estate investing. With effective vaccines, high inflation, low-interest rates, plenty of stimulus, and the rise of work-from-home, real estate seems set for growth. Here’s an overview of Fundrise, a leading platform in this space.
About Fundrise
Fundrise is a top real estate crowdfunding platform open to both unaccredited and accredited investors. Founded in 2012, it pioneered the eREIT, a private diversified real estate investment trust, making it possible for everyday people to invest in private real estate typically reserved for the wealthy or institutions.
As of 2022, Fundrise manages over $3.2 billion in equity and has more than 400,000 active investors. This is a significant increase from 2021, when it managed $1 billion and had 150,000 investors.
Why Fundrise Stands Out
Fundrise aims to build a better financial system for individual investors. Unlike many financial services that prioritize high-net-worth clients, Fundrise focuses on offering great investments to everyone through a user-friendly platform. They cut out middlemen, which lowers costs and potentially increases returns for investors.
Fundrise has facilitated over $7 billion in total transactions and helped investors earn over $226 million in net dividends. They provide access to institutional-quality assets without brokers or intermediaries, making their fee structure significantly lower than traditional private real estate managers.
Investment Strategy
Fundrise’s strategy involves looking at macroeconomic trends and translating those into physical real estate investments. They focus on acquiring assets below replacement cost, ensuring a buffer against market fluctuations. For example, they target affordable apartment communities in the Sunbelt region, which is experiencing significant population and economic growth.
Their portfolio includes a mix of cash-flowing apartments and e-commerce-related industrial assets, which have grown in demand due to the pandemic’s boost to online shopping.
Advantages Over Public REITs
Investing with Fundrise means buying directly into primary issuances of non-traded private real estate, which cuts out middlemen and reduces costs. Unlike public REITs, Fundrise’s returns are less volatile and less correlated with the stock market, driven more by the actual performance of the underlying assets.
Who Should Invest
Fundrise is ideal for investors looking to diversify beyond public markets and those comfortable with the long-term nature of real estate investing. Whether you have $5,000 or $5,000,000 to invest, Fundrise offers a way to own real estate without the hassle of property management.
Getting Started with Fundrise
To start investing, sign up on the Fundrise platform, answer a few questions about your investment goals, and select an account type and investment plan. The platform will then allocate your investment across a range of existing funds, providing a diversified portfolio. Investors receive frequent updates on their investments, ensuring transparency and engagement.
Historical Performance
Fundrise’s historical performance data is available on their website, showing consistent returns over time. Their goal is to provide stable, long-term returns rather than short-term gains. This approach has resulted in performance that, over time, compares favorably to public market investments.
Looking Forward
Despite a challenging year for stocks and bonds, real estate has outperformed. Fundrise’s focus on Sunbelt real estate aligns with demographic trends and the rise of work-from-home, positioning it well for the future. By investing in assets that generate consistent cash flow, Fundrise helps investors reduce portfolio volatility and protect their gains.
For more details and to start investing, you can sign up on the Fundrise platform.
