Roofstock vs. Fundrise – Who’s Ready for Real Estate?
Free trading apps, a booming financial market and a COVID-19 lockdown that we are only now getting out of, like stunned creatures from Rainer Maria Rilke’s “bright, unbound forest” – all the recipe for an enormous increase in the popularity of stock trading. And while investing in stocks, bonds, and electronically traded funds (ETFs) becomes increasingly popular with mom-and-pop types, real assets are falling into oblivion.
Real assets include precious metals, land, equipment, natural resources, and real estate. Real assets are worth including in every portfolio, if only for reasons of diversity. Due to their relatively low correlation with financial assets, real assets ensure that your portfolio is protected from any turbulence in the world markets.
Real estate is our first choice when it comes to developing alternative investments. Stocks tend to rise faster than real estate, but that’s nothing to worry about. What real estate offers you is constant performance that slightly outperforms the inflation rate. There’s a reason the Gallup Business and Personal Finance 2020 survey found real estate was the most popular investment option for Americans as of 2013.
The problem with real estate has always been accessibility. But trading apps like Roofstock and Fundrise have changed the game, making the process of investing in commercial and residential real estate as easy as it is in common stocks. Bob Haegele from Modest Money calls both platforms “great opportunities for people who want to invest in real estate”. But what are the real differences between them?
Roofstock and Fundrise are actually very different programs. Roofstock’s core service enables private investors to own real estate directly. Fundrise, on the other hand, is more of a crowdfunding company with a manageable initial investment of $ 500. Different strokes, in fact, for different people. Roofstock vs Fundrise – a rivalry at its best.
But which program is right for you? Let’s take a closer look at these industry leaders.
Roofstock – Own your property
Roofstock was founded by the magnates Gary Beasley, Gregor Watson and Rich Ford and has a single goal: to bring the purchase of rentable single-family homes to the joint investor. By providing research, analysis, and insight to clients, Roofstock helps the tepid investors dive deep into the real estate world without fear of setbacks.
While Roofstock is sometimes lumped together with other crowdfunding companies, it’s really not the same. Because with Roofstock you own real estate directly instead of pooling your money with other investors. Roofstock offers a crowdfunding option called Roofstock One that allows you to buy shares in rental apartments.
Properties of the attic
- Optimized process: One thing that puts most investors off real estate is the whole process of finding suitable real estate, contacting management companies, and getting funding. Roofstock can arrange all of this for you, including home inspections. The result is a one-stop shop for real estate investors.
- Real estate data: If you don’t know a lot about homes, knowing exactly what you are buying when your first time in the real estate business can be difficult. Roofstock does the dirty work for you, providing users with detailed information, photos, neighborhood ratings, and inspection histories on each and every property.
- Fees and prices: Fees are easy at Roofstock. Basically, there is only one fee structure when buying a house via Roofstock. Buyers pay $ 500, or 0.5% of the sale price, and sellers pay $ 2,500, or 3.0% of the sale price.
Fundrise – rise above the ranks
Unlike Roofstock, Fundrise prides itself on its crowdfunding DNA. Fundrise, a Washington DC-based company founded in 2010, is often hailed as the first to crowdfund real estate companies. Founders Ben and Dan Miller saw a market opening, and they embraced it with great enthusiasm.
With a low minimum investment and a simple, user-friendly application, Fundrise is a pioneer in the democratization of real estate investments.
Fundrise functions
- Different account levels: Fundrise offers four different account levels, each with a different minimum investment, making it a platform for users of all stripes and wallet sizes. For example, their “Starter Level” only requires $ 500 to buy in, while their “Premium Level” includes an initial investment of a whopping $ 100,000.
- Different plans: Like many of today’s best robo-advisors, Fundrise offers a variety of account profiles that tailor assets to meet the needs of individual investors. Choose from income, balanced and long-term growth.
- Fees and prices: Like Roofstock, Fundrise keeps fees and pricing simple: there is an advisory fee of 0.15% and an asset management fee of 0.85% for eREITs and eFunds in your portfolio. Essentially, this means you have to pay a 1% annual fee.
Roofstock vs. Fundrise – Which Platform Wins?
As always, there is no clear winner when comparing remarkable investment platforms. Each has its own set of advantages and disadvantages, and one is hard to suggest to the average investor. The fact is, it all depends on what you are looking for when it comes to real estate investments.
At Fundrise, users will likely pay more fees in the long run, but the minimum investment is only $ 500, which should likely appeal to those with little startup capital.
Roofstock, on the other hand, allows investors to own real estate directly, but the initial investment is quite high.
Both options add much needed diversity to your portfolio and are great ways to generate additional income and achieve long-term growth.
Check out Fundrise and Roofstock today to begin your real estate adventure.