IN-DEPTH ANALYSIS

Fundrise Review: Fees, Features, Pros, and Cons

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Written By
Julija A.
Updated
December 12, 2022
Some or all of the products/services listed on this page are from our affiliate partners from which we receive commissions. This, however, does not influence the evaluations in our reviews. Learn more by reading our Advertiser Disclosure.

Fundrise is a real estate investment platform where investors can choose from various real estate projects, such as residential and commercial properties. Platform members also have access to educational resources that help them make the best investment decisions.

Fundrise reviews various real estate investment options and picks only the top projects for its clients. So, let's see how much you can earn from investing via this real estate investment platform, how it can help you maximize earnings, and more.

MINIMUM INVESTMENT AMOUNT:
$10

Low advisory fees

Learn More

Fortunly Rating

Fortunly's Rating: Our editorial team determines the rating based on a set of evaluation criteria developed for each product and service category.

MINIMUM INVESTMENT AMOUNT:
$10
FEES:
0.15% advisory fee + up to 0.85% asset management fee
TOTAL INVESTED:
$4 billion
BBB RATING:
A+
YEARS IN BUSINESS:
Since 2012
Fundrise returns:
Up to 86.2% after six years
pros thumb up Strengths
  • Low advisory fees
  • Highly rated mobile app
  • Low minimum investment
  • Unaccredited investors can invest
  • No negative quarters in the past five years
  • Higher average income return compared to average market values
pros thumb up Weaknesses
  • Unsuitable for short-term investments
  • No discount fees for plans with higher balances
  • Redemption may be unavailable if economic conditions are bad

Fundrise Overview

Founded in 2012 and headquartered in Washington, D.C., Fundrise is a real estate investment platform that allows investors of all sizes to make money - even those with minimal starting funds can try their luck here.

Also, Fundrise software helps its clients invest in residential and commercial real estate while keeping costs low and making the most of their passive income. To help with that, the platform has a popular mobile app, enabling users to constantly track their investments.

How Does Fundrise Compare to Other Real Estate Platforms?

Fundrise Logo
Fundrise
Minimum Investment:

$10

Fees:

0.15% advisory fee + up to 0.85% asset management fee

Yieldstreet Logo
Yieldstreet
Minimum Investment:

$500

Fees:

1% to 4%

RealtyMogul Logo
RealtyMogul
Minimum Investment:

$5,000

Fees:

1% to 1.25%

How Does Fundrise Work?

Fundrise stands out in the real estate market for more than just low fees and investment amounts. For one, it allows non-accredited investors to earn and has several account levels catering to people with different budgets. Now, let's get into the details.

Basic Requirements

To invest in real estate as an unaccredited or accredited investor on Fundrise, you must be an American citizen or permanent US resident. Also, you must be at least 18 years old.

Investment Plans

You can choose among five Fundrise investment plans to become a real estate investor and generate long-term growth, and these are:

  • Starter
  • Basic
  • Core
  • Advanced
  • Premium

These plans allow you to choose the amount of money you wish to start investing with. For example, you can begin investing with as little as $10 at the Starter level. Of course, if you have more money, other plans unlock benefits Starter doesn't have.

Take a look at the following table for a quick reference regarding Fundrise account levels:

 

Starter

Basic

Core

Advanced

Premium

Minimum amount

$10

$1,000

$5,000

$10,000

$100,000

Dividend reinvestment

Yes

Yes

Yes 

Yes

Yes

Invest via IRA

No

Yes

Yes

Yes

Yes

Customize portfolio strategy

No

No

Yes

Yes

Yes

Investor Relations priority access

No

No

No

No

Yes

Fundrise Fees

While perks differ between levels, all unaccredited and accredited investors pay an annual advisory fee of 0.15% and an annual asset management fee of up to 0.85%. This is pretty low by market standards, and is in line with Fundrise’s low-barrier-to-entry approach to real estate investing.

Referral Bonuses

If they invite their friends or colleagues to join the platform as well, Fundrise investors can expect to earn a cash reward. The amount depends on their subscription tier and can be $25 (Starter), $50 (Basic, Core, Advanced), or $100 (Premium) per successful invite.

Real Estate Investing Returns

Fundrise claims that investing in real estate properties through its platform has a high chance of making money, even for those without experience or tons of capital. However, before committing any real funds, make sure to learn the basics of investing in real estate and the things that can affect cash flow and returns.

Fundrise’s strategy revolves around building a diversified portfolio capable of enduring prolonged periods of economic uncertainty. Unlike many other real estate crowdfunding platforms, it was able to set up its offering so that it could handle economic downturns and still grow its investors' profits.

In light of that, Fundrise’s average returns are as follows:

  • After one year: 11.5%
  • After two years: 21.0%
  • After three years: 34.5%
  • After four years: 49.7%
  • After five years: 60.5%
  • After six years: 86.2%
  • After seven years: 80.1%

What’s more, client accounts on this platform have made money every year since 2017. While most traders investing in real estate investment trusts elsewhere have had negative months in the same period, Fundrise clients have not. As we’ve learned while writing this Fundrise review, the positive and negative months summary is as follows:

 

Fundrise

Public Real Estate Investment Trusts

Public stocks

Positive quarters

23

17

17

Negative quarters

/

6

6

Best quarter

9.4%

16.7%

20.54%

Worst quarter

0.09%

-25.42%

-19.6%

Average return

5.42%

4.34%

2.17%

The data in the table shows that Fundrise's investors generated a higher average return overall in the past five years, even though other investors occasionally enjoyed higher quarterly returns. This means putting your funds to use with Fundrise is generally a safer bet for long-term earnings and loss avoidance than other platforms, but your returns won’t reach extravagant heights.

How Does Fundrise Earn Money?

Investors with a Fundrise account can count on generating quarterly dividends. They also benefit from their shares' increasing value over time. The primary source of returns is rental property income and the property's value appreciation.

How Can Investors Redeem Their Shares?

Investors are generally free to liquidate and redeem their real estate shares at any time, but there are exceptions to this rule. Fundrise reviews and grants requests depending on market conditions and may turn down the request or charge extra fees for early redemption if the current economic conditions are suboptimal.

This cautious approach is further reason to only open an account on Fundrise if you are ready to invest long-term (for five years or more). If you're unsure whether you can commit for at least half a decade, you'd likely be better off choosing a short-term investment opportunity, such as trading in bonds or opening a high-yield savings account.

Opening a Fundrise Account

If making long-term investments and earning regular supplemental income on this platform interests you, you should open a Fundrise account.

To do so, select the "Get Started" button in the upper-right corner of the platform’s homepage. Then, enter your email address, choose a password, pick the account level, and enter your personal information. The sign-up process should take you around 10 minutes.

Fundrise Mobile App

You can download the Fundrise mobile app for iOS or Android from the App Store or Google Play. The app is highly rated on both online stores by thousands of users.

Fundrise Pros and Cons

Let's take a quick look at the pros and cons real estate investors using Fundrise can expect:

Advantages

These are the biggest strengths of investing through Fundrise:

  • Straightforward and quick sign-up procedure
  • Both accredited and unaccredited investors can invest
  • Low advisory fees compared to other leading competitors
  • Five Fundrise investment plans catering to investors with various budgets
  • Low minimum amounts for residential and commercial real estate investments, down to $10 for the Starter portfolio
  • A long streak of positive quarters in the past five years (from 2017 to the third quarter of 2022)

Drawbacks

The principal downsides of Fundrise are:

  • Customer support should be better
  • No discount fees for higher balances
  • Share liquidation (premature redemption) depends on economic conditions

Bottom Line

Passive income from real estate assets offers high returns if you are willing to commit for the long term. Many platforms give prospective investors excellent value propositions, but Fundrise’s minimum investment amount and lower annual fees make it stand out even in this crowd.

If you’re thinking of earning supplemental income alongside your salary, investing through this real estate platform may be an excellent option. Just make sure you understand the risks and how to avoid them.

FAQ

Is Fundrise legit and safe?

+

Investing through Fundrise is perfectly safe. Since its start in 2012, it has become one of the best places to invest in real estate. Despite recent controversy over transaction handling, an SEC investigation revealed no suspicious activity took place.

Can you really make money with Fundrise?

+

Yes, you can. The average real-time return on real estate funds invested through the Fundrise platform after five years is 60.5%, rising to 86.2% after six years. Note, though, that Fundrise reviews redemption requests and turns them down in cases of unfavorable economic conditions until better times come.

Is Fundrise a risky investment?

+

Fundrise isn't risky as long as you’re aware that your investments may become illiquid for quick withdrawals, depending on the economic conditions. For that reason, you should commit long-term—no less than five years. Aside from that, Fundrise hasn’t stopped bringing profits to its investors for a single quarter since 2017.