Comparing $10 Real Estate Investments

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Table of Contents

Pros and Cons of Fundrise

Pros

Fundrise requires a low minimum investment: Fundrise has a variety of different plans with different pricing structures, but Fundrise’s “Starter” plan has a minimum investment of just $10.
You’ll earn dividends: Investors can earn dividends through the rental income Fundrise earns from renters in the properties. These dividends are paid quarterly and are based on how much you have invested. .
Non-accredited investors can invest: Like Groundfloor, Fundrise also allows non-accredited investors to invest.
Your portfolio helps you automatically diversify: With Fundrise, you’re investing in a portfolio of different real estate projects. You won’t have to deal with managing the properties, but you’re still diversifying through holding portions of different types of properties.
Higher potential returns: In 2021, Fundrise delivered returns in the low-mid 20% range.

Cons

Long-term investments: Fundrise states that the investments offered aren’t meant to be short-term. Expect to hold your money with Fundrise for at least five years, or face a 1% penalty on parts of your portfolio.
Little liquidity: Even if you don’t mind swallowing the 1% early redemption fee, it can still take months to get your money back.
Management fees: Since everything is managed by Fundrise on your behalf, you’ll pay fees. They’re not high compared to similar platforms, but they still impact your returns.

Which Should You Choose?

As two of the biggest names in real estate crowdfunding, both Groundfloor and Fundrise offer similar historical returns of around 10%. Both let you invest with just $10, and allow non-accredited investors.

Groundfloor offers shorter-term investments, as most loans repay in well under a year. They also offer a savings account alternative with their Stairs app, paying up to 6% and letting you pull out your money at any time.

I also appreciate that Groundfloor doesn’t charge investors any fees. That keeps their interests aligned with mine as an investor, and the model lends itself to 100% transparency.

But to get the full benefit of diversification, you have to invest in many different loans, with a minimum investment of $10 apiece.

Fundrise offers outstanding diversification with as little $10 however, spreading that money across dozens of properties and hundreds of loans. At higher amounts, Fundrise offers more flexibility to pick and choose investments and funds.

If you only have $10 to invest each month, try Fundrise for the instant diversification. If you have $100 to invest each month, consider spreading it across ten loans on Groundfloor.

Both platforms provide simple, intuitive interfaces and automated investing.

Final Thoughts

Groundfloor and Fundrise offer two distinct investment models. Find more stable returns on short-term investments on Groundfloor, and more diverse long-term investments on Fundrise.

Ultimately, both platforms provide investors with different investment opportunities and risk levels, so you can’t go wrong with either.♦

What are your thoughts on Fundrise vs. Groundfloor? Which do you prefer and why?