Key Takeaways
- • Investopedia rates Fundrise the best overall crowdfunding platform for alternative real estate investing, the best for beginners, and the best for low fees, based on its review of 19 real estate crowdfunding companies scored across eight categories and 50 criteria.
- • Fundrise requires a $10 minimum for taxable accounts and a $1,000 minimum for IRAs, and charges a 0.15% annual advisory fee, with 0.85% for the Income Real Estate Fund and eREITs and 1.85% for the Innovation Fund.
- • Fundrise has more than 385,000 investors and has invested over $7 billion in real property since its 2012 founding, with 292 active projects across its funds.
- • Quarterly redemptions are available but not guaranteed, shares held less than five years may incur penalties of up to 1%, and there is no direct phone customer service line.
- • The review cautions that long-term returns are not guaranteed and that the platform suits long-term investors, with a 2016 SEC-reported former-employee extortion matter noted as the only major controversy in the review.
Summary
Investopedia's review positions Fundrise as a crowdfunded alternative investment platform for small investors, rating it the best overall crowdfunding platform with access to alternative investments in real estate, the best for beginners, and the best for low fees. According to the review, a $10 minimum for taxable accounts, or $1,000 for IRAs, provides diversification across non-listed commercial, industrial, and residential real estate, along with startup investments. Investopedia states that it analyzed 19 real estate crowdfunding companies and earns a commission on the endorsement.
Founded in 2012 and headquartered in Washington, D.C., Fundrise has invested more than $7 billion in real property and reports more than 385,000 investors. The firm began with a single-property model, moved into real estate funds in 2017, launched its iOS app in 2019, and introduced the Fundrise Real Estate Interval fund in 2020, which the review describes as its flagship fund. In 2022 it launched the Innovation Fund, which provides venture capital exposure to smaller investors with a $10 minimum. Investment plans are organized into Growth, Income, and Balanced portfolios, with a Fundrise Pro membership available for self-directed investors.
Fees are structured as a 0.15% annual advisory fee charged to all investors, which the review compares to a wrap fee, plus fund-level fees of 0.85% for the Income Real Estate Fund and all eREITs and 1.85% for the Innovation Fund. The review notes that redemptions are reviewed quarterly for the Flagship, Income, and Innovation funds and eREITs, but are not guaranteed and are fulfilled on a first-come, first-served basis. Shares of eREITs and eFunds held less than five years may be subject to penalties of up to 1%, and the Flagship Fund carries no such penalty.
The review identifies drawbacks including average historical income returns, difficulty locating individual project details and prospectuses, and the absence of a direct phone line for customer service, with email requests and callbacks used instead. Investopedia also notes Trustpilot complaints, some of which it attributes to a misunderstanding of Fundrise's long-term design. The review addresses a 2016 matter reported to the SEC involving a former employee's attempt to extort money from the company and allegations of corporate malfeasance; the employee was terminated, and Investopedia reports it has not uncovered further information.
Founded in 2012 and headquartered in Washington, D.C., Fundrise has invested more than $7 billion in real property and reports more than 385,000 investors. The firm began with a single-property model, moved into real estate funds in 2017, launched its iOS app in 2019, and introduced the Fundrise Real Estate Interval fund in 2020, which the review describes as its flagship fund. In 2022 it launched the Innovation Fund, which provides venture capital exposure to smaller investors with a $10 minimum. Investment plans are organized into Growth, Income, and Balanced portfolios, with a Fundrise Pro membership available for self-directed investors.
Fees are structured as a 0.15% annual advisory fee charged to all investors, which the review compares to a wrap fee, plus fund-level fees of 0.85% for the Income Real Estate Fund and all eREITs and 1.85% for the Innovation Fund. The review notes that redemptions are reviewed quarterly for the Flagship, Income, and Innovation funds and eREITs, but are not guaranteed and are fulfilled on a first-come, first-served basis. Shares of eREITs and eFunds held less than five years may be subject to penalties of up to 1%, and the Flagship Fund carries no such penalty.
The review identifies drawbacks including average historical income returns, difficulty locating individual project details and prospectuses, and the absence of a direct phone line for customer service, with email requests and callbacks used instead. Investopedia also notes Trustpilot complaints, some of which it attributes to a misunderstanding of Fundrise's long-term design. The review addresses a 2016 matter reported to the SEC involving a former employee's attempt to extort money from the company and allegations of corporate malfeasance; the employee was terminated, and Investopedia reports it has not uncovered further information.
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