Investing in real estate can be a great option to diversify your portfolio, but getting started can be difficult. Companies like Roots, Fundrise, and Arrived make real estate investing accessible and easier to manage via their online private REIT platforms.

All three platforms offer low minimum investment options and are open to non-accredited investors, so the decision ultimately comes down to your individual goals and preferences.

If you're looking for the most property types, Fundrise might be the better option for you.

If you're an experienced investor looking for individual properties to place bets on, or really like the vacation rental market, then Arrived might suit you better

If you are looking for less fees, a focus on residential, 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. Ultimately, it's crucial to do your 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 Arrived, highlighting their differences across 5 dimensions: property type, minimums, fees, liquidity and average returns.

Property Type

Fundrise and Roots offer the ability to invest in a portfolio of assets, while Arrived allows you to invest both in a portfolio and in a single asset in a fractional capacity.

Fundrise

Fundrise offers three property types: multifamily apartments, industrial properties, and single-family rentals. Like Arrived and Roots, these properties are electronic real estate investment trusts (eREITs), similar to traditional REITs, but offered through an online platform.

Arrived

Arrived offers two ways to invest: you can purchase a fractional share of a vacation rental or single family property or you can invest in a newly launched single family residential fund.

Roots

Roots offers one investment option, a portfolio of residential rental properties with a mix of single family and small multi family 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.

Minimum Investments, Fees & Liquidity

Arrived, Fundrise and Roots allow non accredited investors to invest with a low minimum, but when it comes to fees and liquidity Roots, Fundrise, and Arrived differ significantly.

Fundrise

With Fundrise, you can start with as little as $10, and they charge 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.

Arrived

Arrived allows you to invest with a $100 minimum, and charges a one time sourcing fee of 3.5% of property purchase price and a 0.15% AUM fee of property purchase price on a quarterly basis for long term rentals. Arrived also has separate fees for vacation rentals and property management. At this time, there is no ability to liquidate early for a fractional investment.

Investment in its single family residential fund has a 0.25% management fee and other potential fees which may include but not limited to closing costs, offering costs, property renovations, sourcing fees, holding costs, operating expenses, and more. These investments are positioned as a longer term investment with a six-month holding period on withdrawals. For those who are looking to liquidate earlier than 5 years, there is a 1-2% cost associated.

Roots

Roots allows you to invest with a $100 minimum. Unlike Fundrise and Arrived, Roots has a lower 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 after one year there are no fees. Roots distributes to investors every quarter, and investors have the option to reinvest or cash out their distributions at that point in time.

Performance

All platforms have delivered returns to their investors with Roots leading the way.

Roots had an average annual return of 16% as of April 1, 2024 and has returned 48% from July 1, 2021- April 1, 2024.

Fundrise boasts an average income return of 4.81%.

Arrived’s average annual return is around 8.4%.

However, it's crucial to note that past performance is not a guarantee of future results. There are always risks in investing, and it's essential to understand them before investing your money.

Ready To Get Started? Invest With Roots

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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

• Fundrise - Everything You’ve Ever Wanted to know about Fundrise’s Fees
• Fundrise - Real-time average’s on client returns 
• Arrived - Why are homes held in a Series LLC
• Arrived - How does Arrived make money?
• Arrived - What fees do investors pay to property managers?
• Arrived - What returns can I expect from Arrived properties?
• Arrived - Single Family Residential Fund
• Roots - Social Impact
• Roots - Performance