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In the world of real estate investment, there are various avenues available for individuals to explore.
Two prominent platforms in this space are Fundrise and AcreTrader, each offering unique opportunities for investors looking to diversify their portfolios.
In this article, we will compare Fundrise vs AcreTrader.
We earn a commission for this endorsement of Fundrise.
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|Commercial Real Estate Properties
|US Farmland, Timberland, Vineyards
Farmland Investing 101
Farmland has provided investors with consistent returns for decades, but gaining exposure to this alternative asset has been a challenge in the past.
Today, you can invest passively in farmland through crowdfunded real estate platforms like AcreTrader.
Instead of buying a farm yourself, investors pool their money together. And instead of managing the farmland yourself, AcreTrader takes care of that. They handle everything from the paperwork to finding a suitable farmland renter.
To date, the team over at AcreTrader has funded 149 properties, totaling over $365 Million in equity raised. This has been invested into over 50,000 acres of farmland.
Looking to learn more? Here's our full review of AcreTrader.
This is a sponsored promotion for the AcreTrader platform. Farmland Riches, LLC and it's members may have investments in companies represented on the AcreTrader platform. This informational post is by no means a promotion, solicitation, or recommendation of any specific investment.
Management Fees: AcreTrader vs. Fundrise
One of the crucial aspects investors consider when choosing a real estate investment platform is the management fee. It directly impacts the returns investors can expect from their investments.
Here's how AcreTrader and Fundrise stack up in terms of management fees:
- AcreTrader charges a management fee of 0.75% on the total investment amount. This means that for every $10,000 invested, investors pay a management fee of $75 annually.
- Fundrise, on the other hand, charges a slightly higher management fee of 1% on assets under management. For a $10,000 investment, this translates to an annual management fee of $100.
While both platforms have management fees, AcreTrader offers a slight cost advantage in this regard, with a lower fee structure.
Minimum Investment Requirement: AcreTrader vs. Fundrise
The minimum investment requirement is another factor that can significantly impact an investor's ability to participate in a particular platform.
Let's compare the minimum investment thresholds for AcreTrader and Fundrise:
- AcreTrader typically requires a minimum investment of $10,000 to $15,000 per deal. This means that investors need to have a relatively substantial amount of capital to participate in AcreTrader's farmland investment opportunities.
- Fundrise, on the other hand, has a much lower barrier to entry, with a minimum investment requirement of just $10. This low threshold makes Fundrise accessible to a broader range of investors, including those with more limited funds to invest.
Fundrise's low minimum investment requirement is advantageous for individuals who want to dip their toes into real estate investing without committing a large sum of money.
Investor Qualifications: AcreTrader vs. Fundrise
The qualifications required to invest in these platforms vary significantly:
- AcreTrader is tailored for accredited investors only. Accredited investors typically have higher income or net worth thresholds and are considered to have a deeper understanding of financial markets. This exclusivity may limit participation for some potential investors.
- Fundrise takes a more inclusive approach by allowing both accredited and non-accredited investors to participate. This means that individuals with varying levels of financial sophistication and resources can invest in Fundrise's commercial real estate portfolios.
Fundrise's open policy to non-accredited investors expands the pool of potential investors significantly, providing opportunities to a broader demographic.
Types of Real Estate Assets: AcreTrader vs. Fundrise
Finally, the types of real estate assets offered by each platform differ:
- AcreTrader specializes in farmland investments. Investors on this platform have the opportunity to buy shares of real farms that are currently leased out to farmers. Returns are generated through farm appreciation and rental payments from farmers.
- Fundrise, on the other hand, focuses on commercial real estate. Investors in Fundrise are part of a portfolio of eREITs and eFunds, which encompass a variety of commercial real estate properties. Returns come from asset appreciation, quarterly distributions, and rental and interest payments.
The choice between AcreTrader and Fundrise largely depends on an investor's preference for asset type, risk tolerance, and investment goals.
AcreTrader caters to accredited investors interested in farmland investments with a lower management fee, while Fundrise welcomes a broader range of investors with a lower minimum investment requirement and diverse commercial real estate portfolios.