Investing with Fundrise: A Beginner's Guide to Passive Real Estate Income

Real estate investing has long been seen as one of the most reliable paths to building long-term wealth. But for many people, the idea of becoming a landlord, managing properties, and dealing with maintenance issues can feel overwhelming. That’s where platforms like Fundrise come in. If you’ve ever wanted to invest in real estate without the headaches of hands-on property management, Fundrise could be the perfect entry point. In this guide, we’ll walk through what Fundrise is, how it works, who it’s for, and how you can use it to start earning passive income.

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What Is Fundrise?

Fundrise is a real estate investment platform that allows everyday investors to participate in real estate projects without needing to buy or manage physical properties. It operates as a type of crowdfunding model, pooling funds from thousands of investors to purchase and manage portfolios of commercial and residential real estate across the United States.

Launched in 2012, Fundrise has grown to manage over $7 billion in assets and serves more than 2 million users. Its mission is to democratize real estate investing by lowering the barriers to entry.

Ready to start with Fundrise? Get $25 towards your Fundrise account when you click here!

How Does Fundrise Work?

Fundrise offers access to portfolios of real estate assets through its proprietary investment vehicles called eREITs (Electronic Real Estate Investment Trusts) and eFunds. When you invest with Fundrise, your money is allocated to one or more of these vehicles depending on your investment plan and risk tolerance.

There are several investment tiers:

1. Starter Account ($10 minimum): A simple, hands-off introduction to Fundrise.

2. Basic Account ($1,000 minimum): Access to more features, including auto-invest.

3. Core Account ($5,000+): Lets you choose between different investment strategies (Supplemental Income, Balanced Investing, Long-Term Growth).

4. Advanced & Premium Accounts ($10,000+ and $100,000+): Offers greater customization and potential access to exclusive private equity deals.

Fundrise investments typically include multi-family apartment complexes, commercial buildings, and single-family rental communities. The platform manages the properties, collects rent, and distributes dividends to investors.

Key Benefits of Fundrise

1. Low Minimum Investment

   • Traditional real estate investing can require tens of thousands of dollars upfront. Fundrise allows you to start with as little as $10.

2. Passive Income

   • Investors earn returns through quarterly dividends and potential appreciation of their shares.

3. Diversification

   • Fundrise spreads your money across multiple properties, reducing risk through diversification.

4. Accessibility

   • No need to qualify as an accredited investor. Anyone over 18 in the U.S. can invest.

5. Transparency

   • Fundrise provides detailed performance reports, property updates, and historical returns.

Potential Drawbacks

1. Liquidity Limitations

   • Unlike stocks, Fundrise investments are not easily tradable. While you can request to redeem shares quarterly, there’s no guarantee of immediate liquidity.

2. Fees

   • Fundrise charges an annual 0.15% advisory fee and a 0.85% asset management fee. These are relatively low compared to traditional REITs, but they can still impact returns.

3. Long-Term Focus

   • Fundrise is best for investors with a time horizon of 5 years or more. Short-term investors may not see meaningful returns.

4. No Control Over Assets

   • Investors have no say in what properties are purchased or how they’re managed. This may be a drawback for those who prefer more control.

Fundrise vs. Traditional Real Estate Investing

FeatureFundriseTraditional Real EstateMinimum Investment$10$20,000+ManagementCompletely passiveRequires active involvementDiversificationHigh (across dozens of assets)Low unless you buy multiple propertiesLiquidityLimitedVery limited (takes time to sell property)Tax AdvantagesSome (REIT dividends)Depreciation, 1031 exchanges, mortgage deductions

Fundrise is ideal for those who want exposure to real estate without the steep learning curve or financial commitment of traditional methods.

How to Get Started with Fundrise

1. Sign Up

   • Create an account at Fundrise.com. You’ll answer a few questions about your goals and risk tolerance.

2. Choose an Investment Plan

   • Based on your preferences, Fundrise will recommend a portfolio: Supplemental Income, Balanced Investing, or Long-Term Growth.

3. Fund Your Account

   • Link your bank account and deposit your initial investment (as low as $10).

4. Track Performance

   • Use the dashboard to monitor earnings, read property updates, and reinvest dividends.

5. Set it and Forget it (Mostly)

   • Fundrise is meant to be passive. You can automate contributions or make one-time investments.

Who Is Fundrise Best For?

• First-time investors who want to dip their toes into real estate.

• Busy professionals who want passive income without being landlords.

• People with limited capital but long-term investment goals.

• Investors seeking diversification outside of stocks and bonds.

It’s not ideal for:

• Those needing quick access to their money.

• Investors who want full control over their real estate holdings.

Fundrise Performance: What Can You Expect?

Fundrise publishes historical returns on its website. Here’s a general snapshot of past performance:

• 2020: 7.31%

• 2021: 22.99% (reflecting strong real estate market conditions)

• 2022: 1.5% (amid rising interest rates and inflation)

• 2023: ~6-8% (early estimates, subject to change)

Past performance isn’t a guarantee of future results, but Fundrise has shown relatively stable returns compared to the stock market.

How Does Fundrise Make Money?

Fundrise earns revenue primarily from:

• Advisory and asset management fees

• Origination and servicing fees on real estate deals

• Equity interests in development projects

These fees are disclosed transparently in your account and investor documents.

Is Fundrise Safe?

Fundrise is regulated by the SEC and follows standard real estate and investment protocols. That said, all investments carry risk. You could lose money, particularly if the real estate market declines or if projects underperform.

They mitigate risk through diversification, experienced asset management, and detailed underwriting.

Final Thoughts

If you’re looking to build wealth through real estate but don’t have the time, money, or desire to manage properties yourself, Fundrise can be an excellent way to get started. With low minimums, a user-friendly platform, and a focus on long-term returns, it offers a unique entry point into a traditionally exclusive asset class.

As with any investment, do your research, understand the risks, and invest only what you can afford to keep tied up for several years. But for many investors, Fundrise represents a practical and modern way to make real estate part of a diversified portfolio.