Fundrise vs Streitwise - Which is Better for You?
While on the surface Fundrise and Streitwise appear very similar they have a few fundamental differences, namely the level of diversification they offer and the types of properties they have for you to invest in.
Before we get into the specifics and categories 1 by 1 comparing them, we’ll just give you our honest assessment:
If you’re looking for a eREIT that focuses on residential properties that has low-fees and good returns while still providing early redemption flexibility then Fundrise is a fantastic choice — alternatively if you’re looking to simply diversify into purely commercial properties then Streitwise isn’t a bad choice, despite it’s higher fees.
Ultimately if you’re an average investor who wants to be diversified without lots of fees eating into your over-all return, and still have flexibility, we’d say Fundrise is the best choice for you, however if you have a more complex strategy and already own residental real estate, say a rental property or two, then you may prefer to go with Streitwise.
Which Platform Has Less Fees - Fundrise or Streitwise?
This category is hands-down won by Fundrise — this is because Streitwise charges various fees including a 3% entry fee upon buying into a fund, and 2% annually in management fees due to them using an external property manager. This means in a 5-year invested period you’d pay 13% in fees to Streitwise.
During the same 5-year invested period with Fundrise you’d only pay 5% in fees — less than half of what Streitwise charges, and that’s not even taking into account early redemption options (if you sell your investment early) which we cover later in the article, but essentially Fundrise’s early redemption fees are 1-3% while Streitwise charges multiple times that.
Overall it’s very clear Fundrise has lower fees and less ‘bloat,’ however it’s important to acknowledge that fees aren’t everything. What matters more is which offers the best overall return, after fees, which we cover later in this article — spoiler: it’s Fundrise by a slight margin.
Which Platform has Better Sign-Up Offers - Fundrise or Streitwise?
Currently neither Fundrise or Streitwise offer anything great in terms of sign-up offers — Often you can get a couple months of advisory fees off your investments with Fundrise by signing up through someone’s referral link, you can use ours by clicking here or ask a friend for theirs, as the person who refers you gets a couple months in advisory fees waived generally as well.
As for Streitwise, they don’t offer a sign-up bonus as far as we know, nor have recently, so you’re out of luck when it comes to them.
Which Platform has Better Transparency & Choice - Fundrise or Streitwise?
Fundrise wins this category by a small margin — This is due to Fundrise being hands-down better for Diversification & Investment Choices (many options), however when it comes to transparency both Streitwise and Fundrise are good relative to other eREITs.
With Fundrise you get ample investment choices depending on what part of the country you think will do better in the coming years or what category of real estate (high end, middle-class apartments, properties in the South-East USA), etc, while with Streitwise they’re a smaller eREIT with few active funds, often only 1 with a few properties in it, which makes the diversification and choice they offer quite bad compared to Fundrise.
Which Platform Offers the Best Overall Return - Fundrise or Streitwise?
Historically Streitwise has returned a bit below 10% a year, while Fundrise historically returns around the same, with new funds returning only 8-9% for the first year then ramping up to 12%+/year — averaging this out this works to right around 10% a year, a bit more if you select growth funds, which makes Fundrise win out slightly.
Ultimately this is why we say fees don’t matter too much — what’s more important is overall return, and as things more or less are the same in this regard, we’d say the main deciding factor is the superior diversification Fundrise offers, as well as the MUCH lower early withdrawal penalties than Streitwise.
Really the only reason to go with Streitwise over Fundrise in our view is if you want pure-play office/retail, as Fundrise has few of such funds and generally mixes in residential real estate with Commerical Real estate — however keep in mind this will come at the cost of extra volatility and risk due to the lower diversification and fund options if you go with Steitwise — such risks may not be an issue for you if you’re diversified already by having a couple rental properties in real life already.
Who is Better Off Investing with Streitwise?
If you’re looking for exposure to commercial real estate (shopping, offices, industry) then Streitwise offers a pure-play exposure to this sector without any residental real estate in it — so if you’re particularly bullish on that sector, or already have exposure to other real estate sectors such as residental single-family or multi-family propertieis then you may prefer to only gain exposure to the commercial side of real estate, for diversification purposes.
Ultimately unless that sounds like you then we’d say most people are better off with Fundrise — or even if you’re looking for pure-play commercial exposure then you’d probably fair better buying a publicly traded REIT like Simon Property Group, STAG Industrial, EPR Properties, or other commercial-focused publicly traded REIT’s, as they offer similar dividends and historic returns to Streitwise with no early redemption fees.
Who is Better Off Investing with Fundrise?
We’d say 90% of people are best off going with Fundrise when it comes to investing in eREIT’s, as they simply offer the best diversification of any company in the sector, and with low fees, great customer service, and overall a fantastic platform and user experience.
Really the only other platform we’d recommend personally to friends or family would be DiversyFund, as it has low-fees as well, but an even higher historic return (15%+ annually) than Fundrise offers — the only downside to it is it’s diversification also isn’t quite as good as Fundrise’s and it has NO early redemption period, meaning you’re forced into holding the investment for multiple years, so it’s not good if you aren’t 100% sure you won’t redeem early.
Fundrise & Streitwise FAQ's:
Below we’ll answer the most popular questions we’ve been asked about the two platforms, or questions we personally had about each of them before we tried them out ourselves — if you have any questions that aren’t answered below feel free to either email us or the companies their self to get those questions answered.
Does Fundrise & Streitwise Pay Dividends?
Both Fundrise and Streitwise pay dividends quarterly and offer a DRIP (Dividend re-investment Program) — generally for both of these platforms you can expect around a 8% dividend-yield from them both, however Streitwise is strictly a 1099-type dividend, while Fundrise allows you to take it as either a standard 1099-type dividend or a ‘distribution’ on a K-1 form, which is an extremely tax-advantaged way to collect yeild — currently Fundrise is the only eREIT that we know of that offers this.
What are the terms for early-redemption (exits before the liquidation period) for Streitwise and Fundrise?
You can ‘redeem’ your assets whenever you want and Streitwise will repurchase them from you — however they do have a small waiting period of between a few days and a little over 2 months depending on the product and time of the quarter you choose to redeem your assets and they do charge a redemption fee of 0% -> 10% depending on how long you were invested in the platform. 10% if you just invested, going down year by year until it’s fee-less after 5 years invested in the property.
With Fundrise you can ‘redeem’ your assets whenever you want and Fundrise (or rather newer investors) will purchase them from you — however you will not receive the proceeds until the quarter has closed, which may be anywhere from a few days away to a couple months depending on when you choose to redeem — fee wise Fundrise charges a 1% -> 3% if done within the first 5-years, and after 5-years, much like Streitwise, they don’t charge a fee for redemption.
Does Streitwise or Fundrise Use Debt/Mortgage’s With Their Properties?
Yes, we met with both Fundrise and StreitWise and discussed this very topic — they both use a fractional debt when purchase deals — meaning that they take a portion of customers invested capital and use it as a ‘downpayment’ for a property, then finance the rest of the deal, generally around 45% -> 60% with debt and the rest of the property is paid for in cash, providing a healthy cash-flow right off the bat while at the same time providing a decent built-in inflation-hedge and low-risk leverage.
Is Fundrise or Streitwise limited to only accredited investors?
No, both accredited and non-accredited investors can invest with Fundrise and Streitwise — however with Fundrise there’s no restrictions as an unaccredited investor. but with Streitwise there are some limitations.
With streitwise you can only invest up to 10% of your annual income or networth with them — you can always lie about it, however we’d say doing such things is not the best of ideas. Better to just go with another platform that won’t restrict you if you want to invest beyond what Streitwise wants you to invest as a non-accredited investor.