When looking to diversify your investment portfolio, real estate is one of the best options available, but it isn’t always easy to get started. Finding the right place to invest can be a challenge, but companies like Roofstock, Crowdstreet, and Roots make real estate investment easy with transparent online platforms that are easy to use and easy to understand.

If you are looking for low fees, low minimums and a portfolio that has a one-of-its-kind social impact on its renters, Roots is for you.

If you are very interested in commercial real estate and are okay with a higher minimum, then Crowdstreet may be right for you.

If you’re looking to purchase or sell a single family rental property instead of investing in a portfolio of properties, then Roofstock may be the best option for you.

Roofstock's marketplace, Crowdstreet's C-RECIT, and Roots' REIT all offer great ways to invest in real estate. Below we'll compare them across 4 key dimensions: property type, fees, minimums, and performance.

Property Type

Roots

Roots' REIT offers investors a portfolio of residential rental properties in which its renters become invested in the fund alongside the investors. This helps incentivizes the renters to be good neighbors which led to low vacancy, low turn costs, and high returns for its investors as you’ll see below.

Roofstock

Roofstock is an online marketplace where both accredited and non-accredited investors can evaluate and purchasing a quality single-family rental (SFR) properties in 27 states throughout the U.S. Roofstock offers their users an investment experience backed by advanced data models, as the company was built on being tech driven.

Crowdstreet

Crowdstreet offers a diverse pool of commercial real estate options for accredited investors to choose from when investing. Investors can invest in Crowdstreet's C-REIT or see their individual commercial properties on Crowdstreet's marketplace.

Minimum Investments, Fees, and Liquidity

Roots

Roots allows you to invest with a $100 minimum.

Unlike Roofstock and Crowdstreet, Roots has a low fee structure, with only a $5 transaction fee for your first investment and a $3 transaction fee on any recurring investment.

If you need to liquidate your funds before one year, there is a 6% early withdrawal fee, but other than that there are no fees to investors.

Roots distributes to investors quarterly, providing investors the option to reinvest or cash out their distributions at that point in time.

Roots offers the ability to liquidate quarterly as well, $100k or up to 5% of the fund.

Roofstock

There is no minimum investment for investors as you are buying or selling a property on its marketplace since investments would vary between rental properties. If you are in the market to purchase a property, Roofstock charges a fee of 0.5% of the home purchase price, or $500 (whichever is greater). For sellers, it takes 3% of the purchase price, or $2,500 (whichever is greater). Liquidity is non-applicable to Roofstock, as its function is to allow purchasing and selling of homes on their marketplace.

Crowdstreet

Crowdstreet requires $25,000 as a minimum initial investment, but depending on the type of investment made, the minimum may be higher.

Since Crowdstreet offers two different investment paths, we will just be focusing on the fees for investing in their C-REIT. The annual fee to invest in CrowdStreet’s C-REIT is 1.5% of assets under management, plus possible sponsor fees. Sponsor fees are the fees the property owners or developers pay to use Crowdstreet’s platform, which they often pass on to the customer.

Crowdstreet also emphasizes a long-term investment horizon, meaning it is very illiquid and investors are in it for the long haul.

Returns

All platforms have delivered returns to their investors

All platforms have delivered returns to their investors with Roots generating some great returns.

Roots had an average annual return of 17.17% as of July 10, 2024 and has returned 51.5% from July 1, 2021- July 10, 2024.

Crowdstreet reports an annualized historic internal rate of return of 12.9% for their marketplace. This marketplace return is referenced as the C-REIT's return data was not publicly available at the time of this article's update.

Rootstock estimates 11-12% gross returns on their marketplace.

Even though historically all three companies have delivered returns to investors, it’s important to remember that past results do not determine future success. Risks are always present when investing your money, so it’s important to understand what those risks are before making your first investment. 

Ready To Get Started? Invest With Roots

Imagine owning real estate where your renters wanted it to succeed as much as you do.

Start investing with as little as $100, and own a piece of the only REIT that creates wealth for both its investors and its residents. It took us years to build Roots, but you can invest in as little as 5 minutes.

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Sources

• Money Under 30
• The Ways to Wealth
• Crowdstreet Track Record
• European Business Review
• Crowdstreet Marketplace Performance
• Investopedia
• Business Insider - Roofstock
• Business Insider - Crowdstreet
• The Real Estate Crowdfunding Review
• Money Made
• Mashvisor
• Tokenist
• Roofstock Glossary
• Roofstock One
• Roots

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