How You Can Earn Money With Fundrise

Have you ever thought of jumping into real estate investing, but didn’t make it happen because of a lack of idea on how to get started? Maybe you want your money to work for you in a way that it will give back instead of only letting it sit in a shoebox or even a bank account wasting its potential?

If so, then Fundrise might be the side-hustle that you’ve been looking for. But can someone really make money with Fundrise.com?

Most people believe that investing in real estate is something that should be best left to the professionals. After all, ordinary individuals got the bond and stock markets to invest in. Doing that should keep anyone’s portfolio diversified enough, right? Well, maybe not, according to Fundrise.

While it’s true that investing practices in the past have been limited to bonds and public stocks, Fundrise has positioned itself to change all that. Today, you can start investing like the pros with an affordable and easy way to get into the world of real estate.

Fundrise: What Is It?

Fundrise is a fintech company that’s based out of the metro area of Washington, D.C., that operates as an online platform for real estate investments. A group of long-time investors founded the company in 2010, armed with the strong belief that technology could provide people a better way of investing in real estate. Of course, when Fundrise was just starting, it was quickly met with doubt. Most people, even experts, during that time, thought that there’s no way to make the lowering of costs and broadening of access to real estate investing possible.

But after only a year of struggle and working through regulations, the company emerged on the other side being a new and real alternative for people to invest in the stock market. Fundrise became a new option for people to invest in high-quality real estate without the need to deal with all of the conventional real estate industry’s associated high costs.

According to this Fundrise review, the company was rebranded in 2017 as more than only a platform for real estate crowdfunding. Fundrise has created an entirely new marketplace for people to engage in private real estate investing like a mutual fund, albeit with more affordable fees thanks to the company’s direct to consumer model.

Fundrise: How Does It Work?

When an individual invests with Fundrise, his funds get allocated across the company’s diversified mix of “eDirect” offerings. These “eDirect” offerings are composed of eREITs and eFunds. Both eREITs and eFunds are professionally managed portfolios consisting of private real estate assets throughout the United States.

eREIT: What Is It?

An eREIT or electronic real estate investment trust is one type of online investment that’s exclusively available on Fundrise. It focuses solely on commercial real estate, so an individual’s investment will go to properties such as office buildings, shopping centers, hotels, and apartments. Similar to a mutual fund or an ETF (exchange-traded fund), eREITs give people the chance to diversify across many properties easily at a relatively low cost.

The eREITs of Fundrise don’t have selling commissions or brokers, unlike other REITs. Since eREITs don’t use middlemen and get sold directly to the investors, they have much lower fees when compared to other REITs. What does it mean for investors like you? Well, you’re going to pay significantly less amount to invest your hard-earned money in real estate.

Please keep in mind, though, that eREITs are non-traded, which means they don’t get traded publicly on the stock exchange. eREITs generally have less liquidity when compared to other REITs. Simply saying, it can be a little more difficult to cash out your eREITs.

eFund: What Is It?

An eFund is actually just similar to an eREIT, albeit focusing exclusively on residential real estates, such as condominiums, townhomes, and single-family homes.

Traditionally, when a person wants to invest money in the housing market, his primary opportunity was to do it via publicly traded homebuilders. However, Fundrise pointed out that these companies are usually subject to “double taxation” or the levying of tax on the same financial transaction, asset, or income by two or more jurisdictions. Double taxation happens when shareholders of a corporation get taxed on the dividends they receive from the already-taxed profits of the company.

The eFunds of Fundrise, unlike those residential homebuilders, aren’t structured as corporations and aren’t publicly traded. eFunds are instead structured as partnerships, which means that they’re not subject to double taxation. Simply said, all investors in Fundrise are considered as the company’s partners. So the cash distribution you’ll receive won’t be considered income and won’t qualify for double taxation.

Final Thoughts

If you invest in Fundrise, you’re going to earn passive income via a combination of property income, interest payments, and the potential value appreciation of these properties themselves. Of course, the exact amount and timing of your return vary depending on the investments within your portfolio and your selected plan.

This article does not necessarily reflect the opinions of the editors or management of EconoTimes