Real estate Investment Comparison
Wondering whether Fundrise or Lofty is a better investment? We put them both to the test to help you compare and decide where to invest your money.
Fundrise is a good hands-off investment option for novice real estate investors, but investors pay for it with very low liquidity, paltry rent dividends, and appreciation gains disconnected from the true value of the properties they help fund.
Makes it easy to invest in real estate with a well designed platform and low entry costs
Their stated fee structure is low, starting at just 1% per year
They've been around since 2010 and has acquired billions worth of real estate
Expected investment time window is at least 5 years
They make a big deal about their low 1% fees. But they've disconnected the value of their REIT shares from the true value of the properties in their portfolio, giving them opportunities to capture returns before they appear in their investor's accounts
Typical returns of 10.70% per year is average compared with returns from other real estate investment options (typically 5-15% in rent yield per year) and the stock market (average 10% per year)
Only pays rent to investors a few times a year - much less often than other real estate investment options. This hurts cash flow and makes it harder to reinvest and access compounding returns
Lofty gives investors unprecedented flexibility with their real estate investment with low minimums, no holding period, and almost instant liquidity. Some knowledge is required to get the most of your investments, but they do a good job at providing necessary documentation to help investors make the right choice.
Secondary market allows investors to trade holdings with low fees from the day they buy them
Investors receive pro-rated rent payments in their account daily
Easily invest in a fraction of a property — as little as 0.1% ownership per property.
Investors actually own the underlying property and vote on major property decisions
Investors from anywhere can invest in U.S. real estate
Fractional investing and managing properties is easy with Lofty, but it's helpful to understand the concept of "limit orders" when buying and selling. This is a key part of trading on Lofty, and it involves you choosing the specific price that you want to trade at.
Lofty's Marketplace has a mix of low and high cap rate properties that you can choose from. Higher higher cap rate properties offer greater cash flow, but they may also carry higher risk of tenant delinquency.
You can easily use Lofty via your mobile web browser, but Lofty does not yet have a dedicated mobile app.