Comparing 3 of the Best Real Estate Investment Platforms Going Into 2024: Roots vs Fundrise vs Crowdstreet
Investing in real estate can be an excellent strategy to diversify your investment portfolio, but getting started can be difficult. Fortunately, companies like Roots, Fundrise, and Crowdstreet make real estate investing accessible and easier to manage via their online platforms.
If you're looking for the most property types, Fundrise might be the better option for you.
If you are very interested in commercial real estate and comfortable with a higher minimum investment, then Crowdstreet could be the right fit for you.
If you are looking for residential properties, less fees, and to invest in real estate that has a unique, positive social impact on the renters, Roots is for you.
All three platforms offer a great way to invest in real estate without the hassle. But, it's crucial to conduct thorough research, understand the risks involved, and seek professional financial advice before investing your money.
Below you'll find an in-depth review of Roots, Fundrise, and Crowdstreet, highlighting their differences across 5 dimensions: property type, minimums, fees, liquidity and average returns.
Fundrise and Roots offer the ability to invest in a portfolio of specific assets, whereas Crowdstreet offers a diversified fund or the option to invest through single sponsor funds from specific real estate firms.
Roots offers a portfolio of residential rental properties. Roots has a unique model where the residents of the properties get invested in the fund if they are good renters (pay rent on time, take care of the property, and are a good neighbor). This has led to less vacancy, lower turn costs, and higher returns for its investors, as you’ll see below.
Fundrise offers three property types: multifamily apartments, industrial properties, and single-family rentals. Similar to Roots, these properties are electronic real estate investment trusts (eREITs), mirroring traditional REITs, but accessible through an online platform.
Crowdstreet offers a diverse pool of commercial real estate options to choose from when investing.
Minimum Investments, Fees & Liquidity
When it comes to fees and liquidity Roots, Fundrise, and Crowdstreet differ significantly. Fundrise and Roots allow non accredited investors to invest with a low minimum. In contrast, you must be an accredited investor to start investing with Crowdstreet as it requires a minimum initial investment of $25,000.
Roots allows you to invest with a $100 minimum. Unlike Fundrise and Crowdstreet, Roots has a lower fee structure, with only a $5 transaction fee for your first investment and a $3 fee for any subsequent 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.
With Fundrise, you can start with as little as $10, with a 1% annual asset management fee, a 0.15% annual advisory fee, and a 0.85% annual investment fee. It’s also important to note that Fundrise is intended to be a long-term, illiquid investment. They offer the ability to withdraw your investment at the beginning of each quarter, but there is an approximate penalty of 1% of your total share value if it’s liquidated before 5 years.
Crowdstreet offers different options to any accredited investor. You can choose to invest in a diversified fund through Crowdstreet directly, where the management responsibilities are entrusted to Crowdstreet’s team of real estate professionals. or through single sponsor funds from specific real estate firms.
Crowdstreet also offers individual deals, allowing direct communication between the investors and sponsors, which removes Crowdstreet as a middle man.
They also offer tailored portfolios, which connects the investor with a Crowdstreet advisor. The advisor then assists the investor in developing a personalized commercial real estate portfolio.
Fees vary depending on the investment, going as high as 2.5% for a Tailored Portfolio.
Crowdstreet emphasizes a long-term investment horizon, meaning it is very illiquid and investors are in it for the long haul.
Crowdstreet requires $25,000 as a minimum initial investment, but depending on the type of investment made, the minimum may be higher – as high as $250,000 if you choose the Tailored Portfolio option.
All platforms have delivered returns to their investors:
Roots returned 16.96% from January 1, 2023 - January 1, 2024 and has returned 43.5% from July 1, 2021- January 1, 2024.
Fundrise boasts an average income return of 4.81%.
Crowdstreet reports an annualized historic internal rate of return of 17.9%.
It's essential to note that past performance does not guarantee future results. Investing always involves risks, and a comprehensive understanding of these risks is crucial before investing your money.
Ready To Get Started? Invest With RootsStart Investing
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.
- Roots - Social Impact
- Roots - Performance
- Fundrise - Everything You’ve Ever Wanted to know about Fundrise’s Fees
- Fundrise - Real-time average’s on client returns
- The Ways to Wealth
- Money Under 30
- Crowdstreet Track Record
- Crowdstreet Marketplace Performance
- European Business Review
- Business Insider - Crowdstreet