You’ve heard about investing in mutual funds, ETFs, individual stocks and bonds, and more, but how about commercial real estate? It’s possible to invest online in commercial real estate via Real Estate Investment Trusts (REITs) and Funds.
By doing so, you can access real estate promotions without committing tons of money typically needed, without being an official investor, and without paying high fees. This can be a great way to grow your funds, though it’s not without risks.
Commercial real estate requires large sums of money upfront to purchase a property. In order to properly diversify your portfolio, you should own multiple properties with various types of features, such as apartment complexes, strip malls, and office spaces, and properties in various locations.
Though, since you can liquidize these investments, publicly traded real estate investments may be a better choice.
Before you get into commercial real estate investing, you may want to check out Fundrise. Fundrise lets you make passive income by investing in real estate through simplifying investing via REITs. Currently, Fundrise is offering 90 days of free trade when you sign up through our referral link. You can get started with as little as $500. Read more on what Fundrise can offer you.
Fundrise Robo-Advisor Information
- Direct Link to Offer
- Offering Type: Debt, Equity, Preferred Equity
- Property Type: Commercial, Residential, Single Family
- Availability: Nationwide
- Expiration Date: None
- Minimum Investment: $500
- Hard Inquiry: Unknown
- Fees:
- 0.85% annual asset management fee
- 0.15% annual investment advisory fee
- Additional Requirements: None
- Closing Account Fee: None
How Fundrise Works
To get started with Fundrise, you must first select a plan. First, you’ll choose a portfolio (Starter, Core, or Advanced). The Starter plan only requires $500. We’ll go over them in more detail down below.
Then, you sign up which takes 10 minutes and requires some personal information. You’ll provide your name, address, phone number, Social Security number.
When you’re ready to fund your account, you can link a checking account to your Fundrise account or set up a wire transfer. It may take several days for your account to fund and for you to be able to start investing.
Returns are easy. You’ll be paid out either by quarterly dividends or appreciation in values of your shares.
With quarterly dividends, or rental income generated from the properties, you’ll typically receive dividend distributions a few weeks after the end of each quarter. When your shares are appreciated, you’ll get money when the property is sold. Appreciation is only paid at the end of the investment.
Portfolio Options
When you invest with Fundrise, you’ll have several investment options to choose from. Each portfolios diversifies your funds differently, based on your goals.
The Starter Portfolio requires a $500 minimum. You receive a diversified portfolio of 5-10 real estate projects throughout the U.S. This plan has a 90-day money back guarantee.
The Core Plan has a $1,000 minimum. There are three types of Core plans, Supplemental Income, Balanced Investing, and Long-Term Growth. Each of them will provide you greater diversification across 40+ projects. Choose the one that best fits your financial goals.
- Supplemental Income focuses more on properties that generate cash flow (collecting rent or interest). You will receive more dividends.
- Balanced Investing invests in a nice mix of income and growth properties. You receive returns through both dividends and appreciation.
- Long-Term Growth focuses on properties expected to appreciate in value. You’ll receive less dividends now, but the potential returns could be the highest in the long term.
The Advanced Plan is the highest tier and most expensive plan with a $10,000 minimum. It offers diversification across 80+ projects and a more sophisticated strategy for potentially higher returns.
Fundrise Features
With Fundrise, you can invest your money, according to your goals, in a portfolio filled with dozens of real estate projects. Each one is carefully handpicked and proactively developed with the goal of growing your net worth.
- Invest in real estate with just $500. Commercial real estate is usually too costly individual investors. With Fundrise’s crowdfunding, you can take advantage of the growth and dividend potential they have to offer.
- 90-day money back guarantee. When you sign up to test out a Starter account, you can request your money back within the first 90 days if you don’t feel comfortable investing with Fundrise. In addition, Fundrise will buy your investment from you for the amount you paid.
- Upgrade to an advanced plan for free. You must invest a minimum of $1,000 before you can upgrade to one of the Core plans. However, there is no fee to upgrade.
- Low fees. Many real estate crowdfunding platforms require their investors have a net worth of over a million dollars or make more than $200,000 per year. With Fundrise, you don’t have to disclose your net worth or annual income. Thus, investing in commercial real estate possible for anyone with just $500.
- Alternative to the stock market. Investing in real estate gives you some diversification on top of stocks and bonds. While real estate and stock markets are correlated, diversifying into real estate means you can protect yourself from the direct impacts of a stock market crash.
- Broad diversity. No need to pick specific properties to invest in. Fundrise automatically diversifies portfolios for you across a series of different types of real estate.
- Passive investment. You don’t have to manage the properties, finance them, or do any of the labor involved in real estate investing.
- Receive distributions. Fundrise pays distributions on a quarterly basis. This can help with the illiquidity of real estate investments. Though, since portfolios can be unpredictable, you’re not completely guaranteed to see payments each quarter.
- Available as IRA. For tax-efficient retirement savings, you can open a self-directed IRA account through Millennium Trust Company and invest in Fundrise’s REITs.
Conclusion
Fundrise can help you invest in real estate without taking huge risks or putting a huge burden on yourself. However, since it’s a long-term investment, you should put some thought into it. In addition, these opportunities for capital appreciation, portfolio diversification and regular distributions are tempting. Remember that distributions are never guaranteed.
If you plan on tying up your money for the next five years, there’s no guarantee you’ll have access to it any time before it. Though, if you don’t mind, diversifying into real estate through Fundrise may be worth it. Plus, there’s virtually no risk if you just want to try it out with the 90 days of free trade offer going on.
If you’re not into investing in real estate, you can see our list of the best robo-advisors we recommend. In addition, you may want to check out our full list of broker bonuses to sign up for bonuses when opening for a new account.
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