The last year has been hard for housing. Slumping sales have many wondering about the sector’s future. But signs are looking up that falling mortgage rates will supercharge a 6% rise prices within the next 12 months. In today’s real estate market, investors are constantly seeking platforms that allow them to break into the industry without having to purchase a whole property. It’s time for an in-depth Arrived Homes vs. Fundrise comparison the two renowned real estate investment platforms. We’re here to help you navigate through the sea of information and make the right investment decision.
What Is Arrived Homes?
Arrived Homes is a real estate crowdfunding platform that seeks to democratize real estate investment by allowing individuals to purchase shares in residential properties for as low as $100. This startup aims to revolutionize traditional real estate investing by addressing common barriers, such as high entry thresholds and management complexities, and offering an opportunity to earn passive income through regular rental payments and potential property appreciation. By integrating technology and real estate, Arrived Homes provides a platform where individuals can easily invest in rental homes or vacation rentals. Investors can browse through Arrived’s properties that have been pre-vetted for investment potential. After selecting a property and determining the investment amount, investors can purchase their shares through a digital process, after which they start earning rental income and appreciation while Arrived manages the properties. As Arrived Homes operates on a crowdfunding model, the low minimum investment allows for a diversified investment portfolio. Investors can distribute their investments across multiple properties, thereby mitigating the risk associated with investing in a single property. Additionally, the platform offers flexibility by allowing investment amounts ranging from $100, broadening access to a wider range of investors. Moreover, Arrived Homes takes the hassle out of property management, which is often cited as one of the primary deterrents to direct real estate investing. It works with professional contractors and property management companies to manage properties and tenants, ensuring a completely passive income stream for investors. However, these services are not offered for free; Arrived charges a 1% annual management fee. Since its inception in 2019, Arrived Homes has been steadily gaining recognition in the investment community. Despite its relatively limited track record, the platform has attracted some high-profile backers, including venture capital entities owned by industry leaders such as Jeff Bezos, Marc Benioff, Spencer Rascoff, and Dara Khosrowshahi.
What is Fundrise?
Fundrise is a real estate investing platform that has made a significant impact since its establishment, enabling a much larger demographic to participate in private real estate investments. It was founded in 2010 by a group of long-time investors in the Washington, D.C. metro area, aiming to mitigate the high costs and other barriers that often exclude individual investors from the real estate market. Fundrise’s innovative model allows investors to crowdfund, or pool their resources, to buy shares in various properties. This means that instead of having to buy an entire property, investors can acquire a portion of a property for as low as $10. This not only reduces the entry barrier for real estate investment but also diversifies the investor’s portfolio, spreading the risk across several properties rather than concentrating it in a single investment. There is no Fundrise promo code, as the platform has stated that it is looking to attract investors who are looking for a serious, stable return, not flashy gimmicks. If you see someone advertising a Fundrise promo code, know it is a scam. Fundrise provides investors with a completely hands-off way to invest in real estate through its electronic Real Estate Investment Trusts (eREITs) or through professionally managed residential real estate called eFunds. These eREITs and eFunds contain a diversified portfolio of commercial and residential real estate investments, giving the investor exposure to the real estate sector without requiring them to actively manage the properties or conduct investment analysis. The platform offers three distinct portfolio options: Balanced Investing, Supplemental Income, and Long-Term Growth. These are designed to cater to varying financial goals and risk tolerances of investors, giving them the ability to choose the investment strategy that aligns best with their individual needs. The platform is lauded for its passive income generation ability due to the stable cash flow it can provide.
Arrived Homes vs. Fundrise: Which One to Choose?
Your choice between Arrived Homes vs. Fundrise depends on several factors: ● Risk tolerance: Arrived Homes might be more suitable if you have a medium risk tolerance and prefer a more defined investment period. On the contrary, Fundrise may be more appropriate if you have a high-risk tolerance and are comfortable with a less defined investment timeframe. ● Investment Period: The investment period is a crucial factor that varies between the two platforms. For Arrived Homes, the expected investment horizon is typically between 5 to 7 years. On the other hand, Fundrise caters to long-term investors, but does not specify an explicit investment horizon. ● Investment Type: If you prefer single-family rental homes and individual properties, choose Arrived Homes. If you’re more interested in a wide range of properties, including commercial ones, Fundrise could be a better fit. Both platforms provide an alternative to traditional real estate investing, thus allowing anyone to participate in the market without needing to physically buy and manage properties themselves.
Drawbacks
Nevertheless, potential investors should be aware that, as with any investment, there are risks associated with investing in real estate through Arrived Homes. Despite the advantages of low investment minimums and passive income, there can be challenges such as property vacancies, market fluctuations, and economic downturns that could impact rental income and property values. Moreover, given its relatively short operating history, the platform may have fewer options available for investment compared to more established counterparts. Despite its advantages, Fundrise also has potential drawbacks. These include the lack of liquidity, which is inherent to real estate investments, the risk associated with any investment, and higher fees compared to index funds. However, it has been recognized for its high-quality deal flow, approving only about 2% of deals, thus ensuring a rigorous vetting process.
Final Thoughts
Your choice ultimately depends on your individual investment goals, risk tolerance, and preferences. Always ensure to conduct thorough research before making a decision. For the next step in your investment journey, why not explore the benefits of the Fundrise yourself? Take the leap today, and secure your financial future with the power of real estate investing.
