Free trading apps, a booming financial market, and a COVID-19 lockdown that we are barely emerging from, like numb creatures in Rainer Maria Rilke’s “Bright and Unlimited Forest” – all the proceeds for a huge increase in the popularity of stock market transactions. And as investing in stocks, bonds, and electronically traded funds (ETFs) becomes more and more popular among mom and pop types, real assets are forgotten.
Real assets include precious metals, land, equipment, natural resources and immovable. Real assets are worth including in any portfolio, if only for the sake of diversity. Due to their relatively low correlation with financial assets, real assets ensure that your portfolio is safe from any turbulence that global markets may experience.
Real estate is our benchmark when it comes to diversifying into alternative assets. Stocks tend to rise in value faster than real estate, but there is no need to worry. What real estate offers you is constant performance slightly above the inflation rate. There’s a reason Gallup’s 2020 Economy and Personal Finance Survey found real estate to be the most popular investment choice for Americans as of 2013.
The problem with real estate has always been affordability. But commercial applications like Roofstock and Fundrise were a game-changer, making the process of investing in commercial and residential properties as easy as common stocks. Bob Haegele of Modest Money calls both platforms “great opportunities for people who want to invest in real estate.” But what are the real ones differences between them?
Roofstock and Fundrise are actually quite different programs. Roofstock’s main service allows private investors to directly own properties. On the flip side, Fundrise is more of a crowdfunding operation with a manageable initial investment of $ 500. Indeed, different strokes for different people. Roofstock vs Fundrise – rivalry at its best.
But which program is suitable you? Let’s take a closer look at these industry leaders.
Roofstock – Own your property
Founded by tycoons Gary Beasley, Gregor Watson and Rich Ford, Roofstock has one singular goal: to bring the purchase of rentable single-family homes to the common investor. By providing its clients with research, analysis and information, Roofstock helps the most timid investors dive deep into the world of real estate without fear of backfire.
While Roofstock is sometimes bundled with other crowdfunding companies, it’s really not the same. This is because with Roofstock you own properties directly rather than pooling your money with other investors. Roofstock offers a crowdfunding option, called Roofstock One, which allows you to buy shares in rental housing.
Roof drill bit characteristics
- Simplified process: One thing that most real estate investors hold back is the whole process of finding suitable properties, contacting management companies, and financing. Roofstock organizes 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 have a lot of home knowledge, it can be difficult to know exactly what you are buying when you get started in the real estate business. Roofstock does the dirty work for you, providing users with detailed information, photographs, neighborhood ratings and inspection histories on each property.
- Fees and rates: fees are easy with Roofstock. Basically there is only one fee structure when buying homes through Roofstock. Buyers pay $ 500 or 0.5% of the sale price and sellers $ 2,500 or 3.0% of the sale price.
Fundrise – Rise above the ranks
Unlike Roofstock, Fundrise prides itself on its crowdfunding DNA. A Washington DC-based company founded in 2010, Fundrise is often hailed as the first company to crowdfund into real estate businesses. Founders Ben and Dan Miller saw an opening in the market, and they went there, full of enthusiasm.
With low minimum investments and a simple, user-friendly app, Fundrise is at the forefront of democratizing real estate investing.
Characteristics of fundraising
- Different account levels: Fundrise offers four different account levels, each with a different minimum investment, making it a platform for users of all backgrounds and sizes. For example, their “starter tier” only requires $ 500 to purchase, while their “premium tier” involves a huge initial investment of $ 100,000.
- Different packages: Like many of today’s best robo-advisors, Fundrise offers a variety of account profiles that tailor assets to the needs of individual investors. Choose from Income, Balanced, and Long Term Growth.
- Fees and rates: Like Roofstock, Fundrise simplifies fees and rates: an advisory fee of 0.15% is associated with an asset management fee of 0.85% attached to the eREITs and eFunds in your portfolio. Essentially, this means that you will be considering a 1% annual fee.
Roofstock vs. Fundrise – Which platform wins?
As always, there is no clear winner when comparing notable investment platforms. Each has its own advantages and disadvantages, and it is difficult to suggest one over the other for the average investor. The point is, it all depends on what you are looking for in real estate investing.
With Fundrise, users are likely to pay more fees in the long run, but the minimum investment is only $ 500, which is likely to appeal to those with little starting capital.
On the other hand, Roofstock allows investors to own properties directly, but the initial investment is quite high.
Both options give your portfolio the much-needed diversity and are good ways to generate additional income and establish long-term growth.
Discover Fundrise and Roofstock today to start your real estate adventure.