Fundrise Review 2024: Real Estate Crowdfunding Platform

Fundrise is a crowdfunding platform for private investing, and its investment products range from real estate to venture capital to private credit. Fundrise users can invest with as little as $10, and it prides itself on giving small investors access to private market exposure.

For example, instead of buying a single piece of property by yourself, you and other investors buy shares in a fund that owns or finances multiple apartment buildings, office buildings, single-family homes, hotels, retail space and other properties.

When those properties make money through rental income, mortgage payments or appreciation in value, the profits flow to the fund’s shareholders (including you). 

And there’s no income or net worth requirements to get started. 

In contrast, many other real estate investment platforms require you to be an accredited investor —  defined in U.S. securities law as having a net worth of more than $1 million and an annual income of at least $200,000 for individuals. 

After you place your initial investment, Fundrise adds assets to your portfolio without more time or investment from you.  

Still, Fundrise has drawbacks. 

Your money is rather illiquid, meaning you can’t cash out your investments as easily as you can with other asset classes like stocks, ETFs and mutual funds. 

Fundrise takes a long-term growth approach to investing, so expect to hold these funds for 5+ years. Otherwise, you could pay a 1% penalty. 

While investors can create a starter portfolio for as little as $10, Fundrise charges several fees. 

So is Fundrise a good way to invest? In this Fundrise review, we break down everything you need to know, including features, investment choices, cost and fees.

Fundrise Investment Products

Instead of shelling out thousands of dollars to buy your own rental property, Fundrise lets you (and thousands of other investors) buy small pieces of multiple real estate assets. 

Real estate investment trusts, or REITs, are the primary investment option on Fundrise. 

An REIT is a bunch of income-producing commercial real estate properties bundled together. (Like how an ETF or mutual fund bundles several stocks into a single share.) 

Fundrise calls its products “eREITs.” They help diversify your money across dozens of commercial real estate deals across the U.S. 

Fundrise also offers eFunds, which focus on residential real estate assets, such as single-family homes, townhomes and condos. 

Your real estate funds generate quarterly dividends, and they have the potential to grow in value over time.

Returns from eREITs and eFunds ultimately come from the individual real estate assets inside your portfolio. This includes interest or rental income collected, as well as potential appreciation in the property’s value.

Fundrise will tailor your specific portfolio allocation based on your personal investment goals and strategy. 

Fundrise’s largest and most diversified funds are its Flagship Real Estate Fund, its venture capital, or Innovation Fund, and its private credit, or income fund. There are no penalties for liquidating shares in any of those funds.

What is Fundrise Pro?

Fundrise created Fundrise Pro to cater to investors who want more control over their portfolios. For $10/month or $99/year (plus a 30-day free trial) users can make direct investments in specific funds and create a customized portfolio allocation.

How Do You Withdraw Money from Fundrise? The Redemption Process

Real estate is an inherently illiquid asset, meaning it’s hard to get your money out quickly once it’s invested.  

It’s like owning a home. You may have $200,000 invested in your home, but that doesn’t mean you can liquidate its full value for cash tomorrow. 

Fundrise says its platform is best suited for investors who hold their investments at least five years. 

You’ll pay a 1% fee on all eREIT and eFund redemptions processed before an investment is five years old. You’ll also undergo a minimum 60-day waiting period before the shares are sold. 

After five years, you can request to redeem your eREITs or eFunds at any time for their full value with no penalty.

Fundrise reviews liquidation requests for the Flagship Fund, Income Fund, Innovation Fund and eREITs quarterly.

This basically gives you four chances a year to liquidate these shares, and there will be no penalty or cost associated with Flagship Fund, the Income Fund or the Innovation Fund.

eREITs are non-traded — meaning they aren’t publicly traded on a stock exchange — so they generally have less liquidity than traditional REITs. 

You can’t sell eREITs and other Fundrise investments as quickly as you can sell stocks held inside a traditional brokerage account because there’s no guarantee there will be buyers for your real estate shares. 

Final note: Fundrise reserves the right to suspend redemptions, particularly during turbulent market conditions. 

Fundrise most recently flexed this restriction from March 2020 to July 2020 in response to the Covid-19 pandemic.

Fundrise’s Fees

Fundrise has a 0.15% annual advisory fee. This fee is similar to what you’ll find at most robo-advisors. It’s the fee the company charges to manage your portfolio.

1. Fundrise’s real estate funds have a 0.85% annual asset management fee. This fee supports the properties themselves, and pays for things like project-specific accounting, zoning and construction.
2. Innovation Fund has an annual 1.85% flat management fee.

Fundrise doesn’t charge any transaction fees or sales commissions on its funds. Its low fees are a big selling point for many investors.

However, other Fundrise costs may be less apparent.

The company notes that it “could potentially charge other fees, such as development or liquidation fees, for our work on a specific project.”

Fundrise isn’t transparent on the exact cost of these additional fees, and they’re not easily accessible on the company’s main website.

Finally, remember, Fundrise charges a 1% fee if you sell your eREIT or eFund shares before the five year mark.

Fundrise Retirement Account

Fundrise offers the option to open a traditional or Roth IRA. You can also choose to roll over an existing IRA or 401k.

In addition to the standard fee structure charged on all Fundrise accounts (1% a year), Fundrise’s IRA custodian — Millennium Trust Company — charges an annual fee of $125.

That’s right — $125 a year plus a 1% annual fee.

That’s in stark contrast to most brokerage firms and robo-advisors nowadays. Most — like Fidelity, Betterment, SoFi, Merrill Edge and Vanguard — charge an annual advisory fee under 0.5% with no additional annual fees on IRAs.

It’s hard to justify the cost: Fundrise’s website doesn’t mention any perks or unique investment opportunities associated with this $125 fee.

If you’re an experienced real estate investor interested in a self-directed IRA, then a Fundrise retirement account might be a good fit.

Fundrise Review: Pros and Cons

Frequently Asked Questions

Rachel Christian is a Certified Educator in Personal Finance and a senior writer for The Penny Hoarder.