Real estate has always been a popular investment choice due to its stability and potential for profits. However, investing in real estate used to be quite difficult, as it typically involved working with a real estate agent or broker who would help you find and purchase a property. Additionally, you would need to have a large amount of money saved up in order to make a down payment on the property.
Thankfully, things have changed dramatically thanks to crowdfunding real estate investing websites like Crowdstreet and Fundrise. These real estate crowdfunding platforms allow everyday investors to pool their money together and invest in commercial or residential properties. This makes it possible for people with limited funds to participate in the real estate market while also diversifying their portfolios by investing in multiple properties at once.
But which platform is better? Crowdstreet or Fundrise?
In this article, we will compare and contrast Crowdstreet vs Fundrise so that you can make an informed decision about where to invest your money.
- What Is Crowdstreet and How Does It Work?
- What Is Fundrise and How Does It Work?
- Crowdstreet vs Fundrise: Which One Should You Choose?
- Why do people choose Fundrise?
- Why do people choose Crowdstreet?
- Can You Make Money On Crowdstreet or Fundrise?
- Can I lose money with CrowdStreet or Fundrise?
- Best for non-accredited investors: Fundrise
- Best for accredited investors runner-up: Crowdstreet
- What is a real estate crowdfunding investment platform?
- What is a REIT?
- What is an accredited investor?
- What is a non-accredited investor?
- What is a CrowdStreet Fund?
- What is a Fundrise eREIT?
- Which platform is better suited for accredited investors?
- Which platform is better suited for non-accredited investors?
What Is Crowdstreet and How Does It Work?
Crowdstreet is an accredited investors-only real estate crowdfunding platform that allows individuals to invest in commercial real estate projects. Crowdstreet focuses exclusively on commercial real estate, which includes office buildings, shopping centers, warehouses, and apartments.
To use Crowdstreet, you must be an accredited investor, which generally means that you have a net worth of at least $1 million or an annual income of at least $200,000. If you meet these requirements, you can open an account and start browsing Crowdstreet’s available investment opportunities.
Crowdstreet does not charge any fees to invest, but the properties on the platform typically have a minimum investment amount of $5,000. Apart from real estate investment trusts (REITs), Crowdstreet also provides direct investment opportunities, similar to how stock investors can invest in single stocks instead of mutual funds.
Crowdstreet is a good choice for accredited investors who want to invest in commercial real estate projects with a relatively low minimum investment. However, because Crowdstreet is only available to accredited investors, it does not provide the same level of accessibility as some other platforms. In fact, Crowdstreet’s target audience is quite narrow, as most people do not meet the requirements to be an accredited investor.
What Is Fundrise and How Does It Work?
Fundrise is a real estate crowdfunding platform that allows anyone to invest in proprietary REITs and eFunds that the general public cannot invest in. Fundrise’s minimum opening investment is only $10, which makes it much more accessible than Crowdstreet.
Fundrise has 5 tiers of membership, each with different investment minimums and benefits. The starter membership has a $10 minimum investment and allows you to invest in the Flagship Fund, which is a low-cost, diversified portfolio of real estate assets. The other memberships have higher investment minimums but offer access to more exclusive investment opportunities, such as pre-vetted private placements and direct investments in individual properties.
Fundrise charges an annual advisory fee of 0.15% and a management fee of 0.85%, totaling 1%. This fee is lower than the typical 2%-8% management fees charged by traditional real estate investment firms. Additionally, Fundrise does not charge any transaction fees, making it one of the most affordable ways to invest in real estate.
Fundrise is a great choice for anyone who wants to invest in real estate, regardless of whether or not they are an accredited investor. The platform’s low minimum investment and accessible membership tiers make it possible for anyone to start investing in real estate.
Crowdstreet vs Fundrise: Which One Should You Choose?
Crowdstreet and Fundrise are both excellent real estate investing websites, but which one is right for you?
The answer to this question depends on your individual goals and circumstances. Here’s a closer look at how Crowdstreet and Fundrise compare in a few key areas:
Accessibility is one of, if not the, most important factors to consider when choosing a real estate crowdfunding platform. Crowdstreet is only available to accredited investors, which means that the vast majority of people are not able to use the platform. On the other hand, Fundrise is open to anyone, regardless of whether or not they are an accredited investor.
This makes Fundrise hands down the better choice for accessibility. Not only is the platform open to more people, but it also has a lower minimum investment ($10 vs $200,000 on Crowdstreet).
Crowdstreet does not charge any fees to invest, while Fundrise charges a 1% annual advisory and management fee. However, Crowdstreet properties typically have a minimum investment amount of $5,000, while Fundrise only has a $10 minimum investment.
Since the fees on Crowdstreet are lower and there is no minimum investment, Crowdstreet is the better choice when it comes to fees.
People who qualify as accredited investors on Crowdstreet have access to a wider range of investment opportunities than those who use Fundrise, including individual deals, custom portfolios, and REITs. However, Crowdstreet only offers commercial real estate opportunities.
Fundrise allows users to invest via eFunds and REITs in both commercial and residential real estate, which gives the platform a slight edge over Crowdstreet. However, Crowdstreet’s custom portfolios and individual deals are still better for accredited investors who want more control over their investments.
Why do people choose Fundrise?
Fundrise is a crowdfunding site for small and mid-sized business investors who are looking into commercial real estate investing. You are investing multiple investments at one time, thereby reducing your dependency on a single property. Fundraising can also be used to promote commercial real estate investment. You may start investing using the Starters Portfolio gradually advancing into the more rewarding rewards of Advanced Portfolios.
Why do people choose Crowdstreet?
Who wouldn’t love a real estate investment that yields well above 20%? They certainly come at more risky prices but Crowstreet is a very good choice for accredited investors. You have the option to invest in a property investment trust or individual property deal. You don’t have to manage your own property. Especially. Because crowdfunding has an effect on investors only, you will have to give it to several others. You can profit but without the long investment required to be involved when you own an individual property.
Can You Make Money On Crowdstreet or Fundrise?
Yes, you can make money on both Crowdstreet and Fundrise. However, it’s important to keep in mind that real estate crowdfunding is a long-term investment strategy. This means that you shouldn’t expect to see immediate returns on your investment.
That being said, both Crowdstreet and Fundrise have proven to be profitable platforms for real estate investors. In fact, Crowdstreet has a historical average annual return of 17.1%, while Fundrise has an average annual return of 7.31%.
Can I lose money with CrowdStreet or Fundrise?
These are the short answers. CrowdStreet and Fundrise investors have a property market. There is potential loss of cash through loss from operation costs over rents and / or the sale of property (capital losses). Property investing should be considered similar to stock trading. Income produced in an investment can increase or drop, a factor that affects the value of the asset itself. The major differences are that real estate investors are secured by underlying assets and can not cause a drastic or complete loss.
Best for non-accredited investors: Fundrise
Fee 1% (extra $175 for IRAs) Investment type Electronic REIT IPOs Electronic Real estate funds Fee 1% (extra $125 for IRAs). This $10 investment minimum gives you access to the company’s Starter Portfolio. Next up is an upgrade level of accounts.
Best for accredited investors runner-up: Crowdstreet
Fee 0% investors, 15% fee for sponsor, 0.25-2.55% customized portfolio Investment types single-sponsor funds CrowdStreet funds a single deal, customized portfolio Fee 0% investor, 15% sponsor. Investing in property can be done using a variety of methods: diversified funds and vehicles, specialized investments and customized investment portfolios.
In short, if you’re looking for a platform that can help you make money in the long run, both Fundrise and Crowdstreet are both excellent choices. However, Fundrise is better suited to the everyday investors looking to get started building their portfolio and Crowdstreet is better suited to the accredited investor.
What is a real estate crowdfunding investment platform?
Crowdfunding involves using the internet to attract investors. Several real-world crowdfunding applications provide similar opportunities to investors wanting to invest in residential property or real estate. Crowdfunding is a platform where investors pool their cash into any investment they make. In other words, the App can pool investment funds in REITs. This type of investment is used by both accredited investor and by non accredited investors.
What is a REIT?
A REIT is an investment company whose income-generating assets consist of multiple assets. REIT investment provides an easier, less risky and more liquid method of building wealth. Although REIT’s can be traded as stocks or as non traded, publicly traded ones can be traded as shares and provide more dividends than stocks do.This type of investment is used by both accredited investor and by non accredited investors.
What is an accredited investor?
An accredited investor is an individual with a net worth of at least $1 million, excluding the value of their primary residence, or an annual income of at least $200,000 per year (or $300,000 per year if filing jointly with a spouse).
What is a non-accredited investor?
A non-accredited investor is an individual who does not meet the criteria to be an accredited investor. Non-accredited investors are subject to certain restrictions when it comes to investing in certain types of securities.
What is a CrowdStreet Fund?
CrowdStreet Funds are private investment funds that give accredited investors the ability to invest in a diversified portfolio of commercial real estate projects. CrowdStreet Funds are managed by experienced professionals and offer investors the potential for high returns with low fees.
What is a Fundrise eREIT?
A Fundrise eREIT is a publicly traded REIT that gives investors access to a diversified portfolio of commercial real estate projects. Fundrise eREITs are managed by experienced professionals and offer investors the potential for high returns with low fees.
Which platform is better suited for accredited investors?
Crowdstreet is better suited to the accredited investor.
Which platform is better suited for non-accredited investors?
Fundrise is better suited to the everyday investors looking to get started building their portfolio.