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Today’s investors have more choices and options than ever, and that’s especially true when it comes to real estate. With the rise in popularity of real estate crowdfunding, anyone can invest in income-generating properties.
Fundrise is one of the most popular platforms for passive real estate investing. A little over three years ago, I began investing with Fundrise to add some diversification to my portfolio. In this article, I’ll share my Fundrise returns so you can see a real-world scenario and the actual performance.
You can find some details about Fundrise’s historical performance (more about that later in the article) on their website, but it’s important to note that each investor’s experience and results will vary. Fundrise offers a few different plans or portfolios based on your goals. Additionally, each investor’s portfolio will be a little bit different because of the timing of when they started investing.
As you look at historical returns, whether you’re looking at overall averages or the results of a particular investor, keep that in mind. Your own results are likely to vary.
My Fundrise Returns After 3 Years
I initially invested with Fundrise at the very end of 2018. I chose their long-term core strategy because it was the best fit for me and my wife. Fundrise also offers a core strategy for income generation, which prioritizes dividends over long-term growth, and a balanced strategy, which is a blend of the two.
Here are my returns as of the end of 2021:
- 2019 – 6.2%
- 2020 – 6.3%
- 2021 – 22.2%
- All time – 12.1% (annually)
I’m including the screenshot below from my Fundrise account for verification.
Three years into the investment, I’m extremely happy with the 12.1% annualized return. To be honest, I was a little underwhelmed with the 6.2% return the first year. However, since I chose the long-term strategy, Fundrise built my portfolio to maximize long-term results and those investments weren’t intended to produce huge gains in the first year.
A few factors contributed to the significant growth in year three, including general real estate trends in the U.S., and progress on those long-term investments that Fundrise placed in my portfolio. I know the results will not continue at this pace (22.2%), but I’m interested to see what happens going forward.
For more details, please read our Fundrise Review.
Fundrise Historical Performance
If you’re researching Fundrise returns, you’re probably looking to find the average historical returns. While there are some numbers out there, it’s critical to note that these numbers are averages across a wide range of different investors and portfolios.
Fundrise aims to be a long-term investment. Because of this approach, the performance may be slow for the first few years before picking up. In general, investors who have been with Fundrise for longer will earn better returns than those who just started investing because they’ll have more mature properties in their portfolios. Fundrise provides an excellent explanation of this in the article Understanding Fundrise Historical Returns, which I’d encourage every potential investor to read.
If you’re looking for overall average returns, Fundrise provides those numbers. Keep in mind, these numbers reflect the average of all Fundrise investors and individual results will vary. Here is how Fundrise compares to public REITs and the stock market. These numbers are taken from Fundrise’s track record page, which you can check for updated numbers.
(all U.S. REITs)
|Avg. Income Return||5.42%||4.34%||2.17%|
As you can see, since 2017, Fundrise has produced much more steady returns than public REITs and the S&P 500.
Keep in mind that past performance is not necessarily reflective of future performance. This is true with all investments.
Fundrise Plans and Portfolios
- Starter – The simplest way to begin, the starter plan requires a minimum investment of only $10.
- Basic – Invest at least $1,000 to get access to additional features like investor goals and the ability to invest in IRAs.
- Long-Term Core Strategy – Invest at least $5,000 and Fundrise will set up your portfolio to prioritize the long-term returns.
- Income Core Strategy – Invest at least $5,000 and Fundrise will help you to maximize dividends from your portfolio.
- Balanced Core Strategy – Invest at least $5,000 and get a blend of the long-term and income strategies.
You can learn more about these strategies at Fundrise’s website.
My Experience with Fundrise
So far, this article has been focused on returns, but I’d also like to share my overall thoughts after three years of investing with Fundrise. Here are some of the key points.
- Stability – The past three years have seen huge ups and downs for the stock market. Meanwhile, my investment with Fundrise has been very calm and stable.
- Ease of Use – I love Funrdise’s platform. The user dashboard is well-designed and extremely easy to use.
- Communication – Fundrise does an outstanding job of communicating with investors. They regularly send emails with updates on specific properties within my portfolio.
- Customization – I like having the ability to customize my portfolio according to my own goals and preferences. For now, I have a long-term approach. But I like that Fundrise also offers a core strategy for maximizing dividends. Investors can also flip a switch in their settings to have dividends reinvested or paid out as cash.
Frequently Asked Questions
Fundrise publishes the average returns of its investors on the company website. From 2017 to 2021, the average annual return was 10.63%. Keep in mind that each investor’s experience will be different. Fundrise offers several different funds and results vary depending on the mix of funds included in an investor’s portfolio.
Yes, you can. Fundrise has an excellent track record, but past performance does not guarantee future success. You should not invest money that you can’t afford to lose.
Yes, with a track record that averages double-digit annual returns, it’s safe to say that people have made money with Fundrise. The average return for Fundrise investors in 2021 was 22.99.%
Yes, Fundrise investors receive dividends quarterly, assuming the portfolio produces the cash to support dividends. Investors can receive the dividends as cash or have them automatically reinvested.
Fundrise is a long-term investment and is intended to be held for at least five years. However, dividends are paid to investors quarterly. You can choose to have your dividends reinvested or transferred to your bank account as cash.
Investors who want passive income can choose to receive dividends as cash instead of reinvesting. Fundrise offers a core strategy (minimum investment of $5,000) that is intended to produce dividend income. This investment should maximize the amount of dividends you earn each quarter, instead of prioritizing long-term growth.
Dividends earned from Fundrise investments are taxed as ordinary income. This is the case for all REITs.
It depends on your investment goals. If you aim to maximize long-term returns, yes, reinvesting is a good choice. If you’re more interested in passive income (for example, if you’re retired), the quarterly dividends can be a good source of income.
Fundrise and other private REITs are not as volatile as publicly-traded REITs.
Final Thoughts on Funrise Returns
Overall, I’ve been really happy with my Fundrise returns, and also with the experience I’ve had using their platform. Based on my experience so far, I expect that I’ll be adding more to my investment.
I’ve written this article to share my personal experience with Fundrise, but it should not be considered investment advice. Be sure to do your own due diligence before deciding to invest.