Arrived Homes vs. Fundrise 2024: Best Real Estate Investing Platform

Real estate investing has become increasingly accessible, thanks to several platforms catering to different budgets and preferences.

Two of the most popular platforms that people have been talking about recently are Arrived Homes and Fundrise.

Both Arrived Homes and Fundrise allow you to invest in real estate without the hassle of being a landlord.

However, choosing the right platform can be overwhelming. Let’s talk about the key differences and see which is the top platform.

Key Takeaways: Arrived Homes Vs. Fundrise

Arrived Homes specializes in single-family rental properties with fractional share investment options.
Fundrise mainly focuses on real estate investment trusts (eREITs) and offers a wider range of investment choices, catering to accredited and non-accredited investors.
Income Potential: Both platforms provide opportunities for steady dividend income, thanks to their property management services.
Considerations and Costs: Each real estate crowdfunding platform is part of a newer asset class in real estate investing and charges an annual management fee.

Final Verdict: Fundrise Wins

It’s a tight competition in real estate crowdfunding platforms, but ultimately, Fundrise edges out as the frontrunner.

Fundrise shines with its variety of investment choices, proven track record, and low entry barriers, ensuring it appeals to a broad audience.

The platform’s innovative strategies in real estate investment, combined with its user-friendly interface, make it a top pick for beginners and seasoned investors.

While Arrived Homes brings a fresh perspective with its focus on single-family rental homes, it doesn’t quite match up to the wide range of options and accessibility offered by Fundrise.

Arrived Homes Details

Arrived Homes is a newer player in the real estate scene, launching back in 2021.

It’s not your typical real estate platform; it lets you buy fractional shares in single-family rental homes.

It’s like getting a piece of the real estate action without fully committing property ownership.

After the funding for a house is complete, this company operates similarly to a Real Estate Investment Trust (REIT).

Read more about it in my honest Arrived Homes Review.

Investment Options

Arrived Homes is unique because it focuses mainly on residential real estate.

They started with traditional real estate rentals, but mid-2022 they added vacation rentals to the mix.

You can pick from properties, some with long-term loans and others outright. They’ve got a decent spread across different markets.

Main Features

Arrived Homes has some really good features that make investing in real estate a breeze.

First, you can start with a $100 initial investment, which is great for those who don’t want to break the bank to purchase shares.

What’s appealing is the passive income. You get dividends every three months from Arrived Homes, and your investment can increase in value over time.

Arrived Homes also uses a thorough 10-step process to ensure they’re picking single-family properties that are winners in real estate markets with potential.

And don’t worry about property management; Arrived Homes has got that covered, making it a fantastic option for people wanting rental income with a hands-off approach to real estate investing.

Cost Of Investing

When considering investing with Arrived Homes, knowing the fees involved is important. They’ve designed their fee structure to be accessible and transparent for investors like you.

Firstly, the Investment Minimum is a reasonable $100, making it accessible for the average person.

Next, you have the Sourcing Fee, which ranges from 3.5% to 5%. This fee covers the costs incurred by Arrived Homes in finding and preparing the property for investment.

For property management, the fees vary depending on the type of rental:

Long-term rental properties: 8% of the gross rental income
Vacation rentals: 15% to 25%

Arrived Homes mentions an Annual Asset Management Fee, and you can find the specific details under “Offering Details” on the property page of their website.

Earning Potential

Investors can anticipate an annual historical return that falls in the range of Without Leverage of 6% to 10% for single-family rental homes and 5.5% to 12% for vacation rentals.

Arrived Homes adopts a long-term investment approach, typically holding onto properties for five to seven years.

During this period, your earnings come from rental income and property appreciation, complemented by consistent dividends.

Arrived Homes Pros & Cons

Pros

Low investment minimum- $100 for fractional shares
Flexible rental options
Limited personal liability
Open to all investors
Property management included

Cons

Limited property selection
Long investment horizon
Fees to consider
Lack of secondary market

Fundrise Details

Next, in Arrived Homes vs. Fundrise, we’ll take a closer look at Fundrise.

This online platform focuses on real estate investment trusts (eREITs) and offers a variety of real estate portfolios for investors.

The goal? To open up the world of real estate to everyday people, making it accessible without hefty upfront costs or specialized knowledge.

Fundrise pools money using fractional shares from a community of investors to buy and manage various real estate types, like residential properties, commercial spaces, and development projects.

The beauty of it? You can start with a low investment of only $10, which is far from the hefty amounts with traditional real estate investments.

Check out the full, in-depth details in my Fundrise Review.

Investment Options

Fundrise has something for everyone who wants to make a passive income. The options include:

eREITs: These are like your ticket to the real estate market party. With eREITs, you can join forces with other investors to dive into a diverse range of real estate assets.

It’s a chance to own a piece of the real estate pie without needing a huge wallet.

eFunds: Looking for something more specialized? eFunds are your go-to. They focus on specific real estate sectors and strategies, giving your portfolio a tailored touch and spreading risk.

Interval Fund: The Interval Fund offers extra diversification and liquidity, making it a flexible option for those who want to navigate their investments easily.

Main Features

Fundrise boasts several key features that set it apart as a leading real estate crowdfunding platform.

These features include a low minimum initial investment starting at $10, the option to invest in diversified real estate portfolios, and access to innovative investment strategies.

Fundrise’s user-friendly interface, designed to simplify the investment experience, makes it even more attractive.

Fundrise offers a range of investment plans tailored to suit various investor needs:

Supplemental Income Plan: Perfect for those seeking regular income from their investments.
Balanced Investing: This option strikes a balance between income and long-term growth.
Long-Term Growth: Ideal for investors looking to build wealth over time.
Venture Capital: Great for those who want to explore more real estate projects.

Cost Of Investing

When you’re thinking about investing with Fundrise, it’s pretty straightforward regarding costs. They charge a flat 1% fee yearly, no matter how big or small your investment is.

Let’s break that down:

Asset Management Fees: 0.85% annually ($1,000 invested = $8.50 fee)
Advisory Fee: 0.15% per year ($1,000 investment = $1.50 over a year)
Fundrise Innovation Fund Fee: 1.85% annually ($1,000 invested = $18.50 in fees)
Fundrise Pro Option: $10 a month or $99 annually

Remember, these fees are on top of the general 1% fee (the 0.85% asset management fees and 0.15% advisory fee) we discussed earlier.

Earning Potential

Let’s talk about what you could potentially earn with Fundrise:

They aim to give you a steady cash flow through quarterly dividends. It’s like getting a regular paycheck from your investments.

In 2021, they managed to pull off an impressive average net return of 22.99%. And from 2017 to 2022, they hit 5% and 22% annual returns.

But, and this is important, how much you make can vary. It depends on the kind of portfolio you choose and how the market’s doing at the time.

So, while income and capital appreciation sound great, remember that these are illiquid investments. That means they’re not super easy to sell quickly.

Fundrise Pros & Cons

Pros

Low minimum investment- $10 for fractional shares
Accepts accredited and non-accredited investors
Several account choices are available
Offers an option for automated investing
Easy investment process

Cons

Taxed on dividend income illiquid investments
Investments are not easily liquidated
Not ideal for short-term investment strategies

FAQs

What are the differences between Arrived and Fundrise?

When comparing the two popular real estate investment platforms, Arrived Homes vs. Fundrise, there are a few key differences to consider:

Focus on Property Types: Arrived Homes mainly concentrates on single-family rental properties. 

Investment Variety: Fundrise, on the other hand, offers a wider range of options. They’ve got eREITs, eFunds, and even an Interval Fund, giving investors more choices to diversify.

Fee Structure: Both platforms will charge an annual management fee, which is standard in the industry.

Minimum Investment: Arrived Homes sets their minimum investment at $100, while Fundrise is more accessible with a low minimum investment of just $10.

Is Fundrise the best platform for REITs?

Fundrise stands out with its electronic REITs (eREITs) offering regarding real estate crowdfunding.

They’ve created a platform that’s easy to navigate and appeals to a wide range of investors, whether you’re just starting or you’ve been around the block a few times.

The platform lets you purchase shares in multiple properties, which can be a smart investment strategy if you’re aiming for passive income.

Are REITs the best for real estate investing?

REITs are a solid choice for diving into real estate investing to make passive income.

They’re particularly appealing if you’re looking at commercial properties or want to use an online real estate platform to get into the real estate sector.

Here’s why some investors love REITs:

Dividend-Based Income: REITs are known for giving out regular dividends, which is great if you like a steady income stream.
Transparency: REITs usually provide clear information about their real estate assets, so you know what you’re investing in.
Liquidity: Unlike direct real estate investments, REITs can be bought and sold like stocks, making them more liquid.
Portfolio Diversification: Adding REITs to your portfolio can spread your risk across different types of investments.
Potential for Long-Term Capital Appreciation: Over time, the value of real estate tends to go up, potentially increasing the value of your REIT investments.
Accredited Investor Status: Some REITs require accredited investor status, especially for their initial offering, so that’s something to think about, too.

Is Fundrise the best real estate investing platform?

When choosing the top real estate investing platform, especially when comparing Arrived Homes vs Fundrise, Fundrise often appears ahead for several reasons.

Its variety of investment options, solid reputation, and friendliness to those with smaller budgets make it a standout choice.

Fundrise is especially appealing because of its customized portfolio strategies and minimum investments ranging from very accessible amounts.

Final Thoughts

Wrapping up the Arrived Homes vs. Fundrise debate, it’s clear that both platforms have their strengths in the realm of real estate investing platforms.

However, from my perspective, Fundrise edges out as the top choice between Arrived Homes vs. Fundrise.

While Arrived Homes specializes in single-family rental properties, Fundrise leads with its broad spectrum of investment opportunities, including eREITs, eFunds, and an Interval Fund.

This diversity in investment options, combined with Fundrise’s proven track record, sets it apart when it comes to Arrived Homes and Fundrise.

What clinches the deal for Fundrise is its accessibility to a wider range of investors, particularly those who might not have much capital.

So, if you want to invest in real estate and earn passive income, I suggest starting with Fundrise as my #1 pick.