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Most experts recommend having some real estate in your portfolio outside of your single family home. With the rise of online platforms, it is now easier than ever before to invest in private real estate deals.
However, with the wide array of platforms come many choices for investors.
Today, we will be looking at the offerings from Fundrise as well as Acretrader.
Fundrise is an online crowdfunded real estate platform that invests in commercial real estate via portfolios.
AcreTrader is an online marketplace for buying shares of farmland.
Both give you exposure to real estate via an online platform, but the similarities really stop there.
Let's dive into Fundrise vs AcreTrader now!
Summary: AcreTrader vs Fundrise
- The minimum investment on Fundrise is $10 for the Starter Portfolio
- Minimums on AcreTrader vary per deal, but they tend to be $10,000 to $15,000
- AcreTrader is open to accredited investors only whereas Fundrise is open to all investors
- Fundrise invests your money in a portfolio of commercial real estate debt and equity investments
- AcreTrader invests your money in a fully managed individual farm that you select on your own
- Both are considered to be a longer term, 5+ year investment
- Both are illiquid, meaning you can't take your money out at the snap of your fingers
What Is Fundrise?
If you have $10 in your bank account, you can invest that in a portfolio of commercial real estate via Fundrise.
In the past, most private commercial real estate deals were reserved for high net worth investors. Fundrise has opened this opportunity up to all leveraging the power of online crowdfunding.
Instead of raising large sums of money from a small group of investors, they raise smaller amounts from a much larger group.
When you invest with Fundrise, you are actually investing in a portfolio of eREIT's and eFunds. However, this is not a publicly traded REIT.
With Fundrise, you make money from asset appreciation as well as quarterly distributions. Rental and interest payments are paid out via dividends, and these can be reinvested automatically.
Fundrise is a 5+ year investment and early withdrawal fees may be incurred if you sell early. Also, Fundrise reserves the right to suspend redemptions at any time.
If you are looking for easy, diversified exposure to private commercial real estate, that is exactly what Fundrise was designed to accomplish.
What Is AcreTrader?
AcreTrader is an online marketplace where you are able to buy shares of real farms that are already rented out to farmers.
This platform, however, is for accredited investors only.
Each farm is split up into a set number of shares, and new deals are listed on a weekly basis. The minimum investment varies per deal, but it tends to be around $10,000 to $15,000.
Each investment involves the formation of a separate LLC, and investors become owners of that LLC proportional to their investment.
With AcreTrader, you make money from the appreciation of the underlying farmland as well as rent payments from the farmers paid out in dividends.
However, the bulk of the money is made when the underlying farm is sold. That is why it is recommended to invest for the full term of the investment.