Streitwise Review 2022 - Better Than Average Returns
Streitwise is one of the best ways to invest in Real Estate currently with low fees, good historic returns, and overall is one of the best ways retail investors can gain exposure to commercial/office-oriented real estate. Streitwise makes it increddibly easy to invest, and overall seems to overall be better than most other eREITs we’ve encountered — albeit with some caviots we’ll go in detail about in this article.
|💰 Overall Return||Above-Average|
|💻 Platform Useability||Simple & Easy|
|🛠 Support Quality||Above-Average|
|🥇 Best Feature||Easy IRA Integration|
While we think Streitwise is one of the best ways to invest in Real Estate and gain exposure to the real estate market it’s not the only way — we’d also suggest checking out Fundrise which is similar to Streitwise — both are competitive with one another in terms of historic return, however they invest in different types of real estate.
Personally we use both platforms and are happy with both, however certain folks may prefer one over the other depending on their investment preferences (residential vs commercial/office property investments) and current portfolio allocations.
To put it short and simply and not bury the lead — Streitwise is our #1 pick if you want commercial/office exposure or if you already own residential property (your home or a rental unit), however as they don’t invest in residential real estate you’ll have to get that elsewhere — other than owning real estate yourself and managing it yourself the next best thing for that, in our opinion, and what we use, is Fundrise.
Table of Contents
Streitwise Unique Features:
Streitwise has many unique features that separates it from competitors, but most of them simply revolve around the approach Streitwise takes — which is to make it simple, approachable, efficient, and highly targeted investments — they don’t try to get every customer under the sun, but instead focus on their area of competence and give investors ample resources to monitor their own investments independently if they want to, as well as of course management insights.
Entirely Equity-Focused REIT
Streitwise exclusively invests in Equity — meaning they invest in assets, physical properties, exclusively — they don’t put your money to hard-money lending or risky remodeling loans nor do they lend it out to others who are trying to buy apartment complexes or whatever else.
Instead Streitwise buys physical properties only, generally commercial and office properties, and holds them long-term while getting fixed-rate debt for a portion of the purchase price — giving you the benefits of debt (low-risk leverage).
This makes Streitwise one of the best and most conservative eREITs out there, despite it having nearly identical returns to most other eREITs — for reference most eREITS return around 8-9% on average and Streitwise generally performs on the higher end of that, or a bit higher — usually around 9% to 11%.
Painless IRA Integration
Streitwise is one of the only eREITs that allow you to invest in an IRA, allowing you to take advantage of their reduced overhead expenses (from not being publicly traded) in a retirement account. The only other platform we’re aware of that offers this is Fundrise, however they charge more for this feature.
You’ll need to first sign up to AltoIRA, an alternative IRA provider that facilitates the investment through the IRAs they provide. You can read our review of AltoIRA here, but essentially they’re low-fee, reliable, trustworthy, and offer 100s of alternative investments through the partnerships they have. Streitwise has such a partnership with AltoIRA so once you’ve opened an IRA with them everything is handled seamlessly, they handle the filing and paperwork, and you simply invest with Streitwise.
Simple to Use & Invest In
Some eREITs are very complicated to invest with, require you to fill out forms and documents, scan them and send them over, etc — with Streitwise the sign-up to funding process is much simpler and easier and you essentially just sign up, send them funds and basic details, and you’re good to go.
But it goes further than the sign-up process — some platforms make it very complicated and convoluted to invest and give you so many options that it becomes hard to decide what to do — a good example of this is Fundrise which has dozens of different funds to invest in, which is great if you want something specific, and a benefit to them, but it’s also a con as it gives some people decision-fatigue and makes them second-guess their self.
With Streitwise as there’s only one fund and it’s focused on one specific strategy you can easily figure out if it’s right for you and your portfolio or not and then proceed to invest — no trying to decide between 40 different funds, 20 of which are similar and most of which have bad elements to them (such as fixed-rate debt).
Fantastic Transparency & Location-Data
While Streitwise’s transparency is overall quite good they shine especially well in that they explicitly show you what building(s) and location(s) you’re investing in when you invest with them — this means you can do your own due diligence on the location, region, and asset before making a decision to invest.
This isn’t really available or at least easy to do with other platforms, part because other platforms often aren’t as transparent, part because most platforms only offer baskets of many many properties together, while Streitwise allows you to invest in just a couple rather than a massive basket of properties. Of course more diversification can be good, but being able to do your own due dilligence on the properties you’re going to invest in is also valuable.
Streitwise Biggest Pros & Cons:
While we’ve mentioned some features and benefits (pros) of Streitwise we didn’t cover them all — nor have we touched on the cons, so we’ll go over them briefly now starting with the Pros of Streitwise:
- Highly Regulated & Transparent
- Easy IRA Support for US Customers
- Low Fees + Good Overall Performance
- Consistent High Dividends (8%+ per year for 5+ years)
- Allows Non-Accredited Investors (anybody)
- Simple and Straightforward
- Has a minimum investment of $5000~
- Doesn’t give exposure to single-family or multi-family residential properties
- Charges hefty early withdrawal/exit penalties and fees (covered more below)
- Is not marginable equity (explained below)
Streitwise Pricing, Fees, and Redemption Tariffs:
Streitwise’s pricing is much more straightforward and transparent than other eREITs, with just a few simple fees we’ll go over below — however the only real one you’ll notice in practice is their redemption fees — which admittably are quite high and higher than most competitiors. This is the main downside to streitwise in our opinion and what makes it not the right choice for some people, as if you aren’t prepared to invest for 4+ years the redemption fee is quite harsh.
With that being said the redemption fee schedule is shown above, but to reiterate it if you redeem (cash-out) after 5 years you pay nothing, within 4-5 years you pay 2.5% in fees, within 3-4 years you pay 5%, within 2-3 years you pay 7.5%, within 1-2 years you pay a whopping 10%, and if you invested within the last year you’re not allowed to redeem your shares (potential exceptions may apply).
This is the real deciding factor in terms of fees, the only one that really matters — as it’ll be what reduces your return. The other fees we mention below are baked into the price/fund/dividends already and thus they’re baked into the overall return of Streitwise.
- Asset Management Fee (2%)
- Upfront Property Purchase/Organization Fee (3%)
To elaborate on these fees the management fee is obviously paid to manage the property and the Streitwise company/REIT it’s self, and the upfront property organization fee is also quite reasonable when you consider that includes all the cost to incorporate the company, prepare tax documents, and all the nessecary beaurocracy that comes with business.
As mentioned before they’re already baked in — so the real deciding factor should be redemption schedule fees. Our rule of thumb, what we follow, is that if we aren’t sure if we’ll stay invested for at least 4 years we’ll opt to go with Fundrise instead, which has significantly lower redemption fees and similar historic returns, however if we were going to be invested for more than 4 years (ideally), and want some office/commercial exposure, we’d rather go with Streitwise.
Streitwise Historic & Expected Returns:
We believe it’s important that folks have a realistic expectation of what they’ll likely make investing with streitwise, and more importantly how they’ve performed historically — as while it’s not a gaurantee of future performance it provides a good idea of how well they manage the assets intrusted to them.
As you can see above in the last 5 years $10,000 invested in streitwise has turned into $16,289, which is quite good and a CAGR of 10.25% — which is quite good for a REIT, within 0.75% of the top-performing REITs and eREITs on the market around the world.
With that being said you probably should expect similar returns in the coming years, maybe a bit higher with inflation picking up, or maybe a bit lower due to potentially. worsening economic conditions — more or less around 9% to 12% per year over the long term, maybe a bit more in numerical terms and a bit lower in real terms due to inflation and it’s impacts. Not too bad — we’d say it’s a good addition to most portfolios as a result, a good buy and hold to diversify.
Streitwise vs Competitors:
There’s many other eREITs and publicly traded REITs on the market, but there’s only a few competitors in the space really worth considering in terms of eREITs like Streitwise — below we’ll cover each individually (briefly) as we have articles comparing them to each other that are much more in detail you can read if you want more detailed comparisons.
But in short, Streitwise is the best office/commercial property eREIT in our opinion, however Fundrise is better for short-medium term (<4 year) investments and if you want residential property exposure — other competitors aren’t really worth considering in most cases when compared to either fundrise or streitwise due to them having higher fees (generally) that result in overall lower net-returns with little other benefits.
There are a couple exceptions that can be better for accredited investors who are willing to invest large sums of capital, or folks who are willing to lock up their funds for indefinite periods of time (generally 10~ years), if you’re interested in such exceptions you can contact us to get more information, but for most people they aren’t worth considering — or even possible due to their strict requirements which often include having a liquid networth of over 1million dollars or investing 100k+.
Streitwise vs Fundrise
Streitwise and Fundrise are our two favorite eREITs and the best investments in the sector in our opinion for most people — however they’re not very comparable in terms of product offerings as Fundrise invests primarily in residential (multi-family) properties while Streitwise primarily invests in Commercial and Office properties.
The overall return of Fundrise is nearly identical to Streitwise, generally being within 0.5% in any given year and 0.2% over the longterm last we calculated, so they perform nearly exactly the same and thus both are good choices — we’d say investing in both — for diversification reasons — makes the most sense, as it’ll provide both residential and office/commercial exposure, thus diversifying further and insulting the investor from potential sector-specific downturns.
Because of this we don’t really think it’s worthwhile comparing the two — but rather it’s better to just use both — however if you want to compare them in more detail you can read our comparison of fundrise vs streitwise here which goes in much more detail. You can also simply sign up to Streitwise by clicking here, or fundrise by clicking here, if you want to go with one in particular — or want to go with both like we generally think is the best choice.
Streitwise vs Diversyfund
Diversyfund is another one of the big eREITs available today — Diversyfund is OK but in our opinion inferior to Streitwise and Fundrise and they do not allow redemption at all, meaning you’re forced to remain invested until liquidation occurs, which could be over 5 years away, which in our opinion is just too risky for most folks as if an emergency came up that forced them to rely on their savings and investments long-term they may need the invested funds to be liquid.
Diversyfund also has a…’interesting’ fee structure, which is much more complex than Streitwise’s and while potentially lower in a low-inflation environment, and something we used to like and see as a pro to diversyfund, is now a con as inflation has went up — in short Streitwise’s fees are built-in and flat-rate, while Diversyfund’s are post-sale and scale relative to the payout, with investors suffering major haircuts in return if the fund returns over 12% a year, which is very possible if inflation continues — in such cases Diversyfund’s fees would eat investors alive, while Streitwise’s investors would be left relatively unharmed.
As a result, while Diversyfund can be good for some people as mentioned in our comparison of Streitwise vs Diversfund here, we wouldn’t personally feel very comfortable investing with Diversyfund, especially over Fundrise or Streitwise, at this stage due to inflationary + Fee concerns.
Streitwise vs Others
There’s a few other eREITs, however they’re all either smaller and perform worse than Fundrise or Streitwise when we reviewed them or they are only available to accreddited investors, investors with large sums to invest, investors who are willing to have indefinite lockups (which we would stay away from), or have other restrictions in place that make them not viable for most people.
If you are an accredited investor you can contact us to discuss what other platforms are options for you, as it really depends on your location/state/country, but generally they do not perform significantly better than Streitwise or Fundrise, generally performing about the same or 0.5% better annually at most — which in our opinion isn’t worth the extra paperwork and accredited-investor status verification, etc, that they require — because of this they asked not to be mentioned by name publicly here, however we’re happy to disclose such platforms privately if they interest you.
Closing Thoughts & Conclusions:
Streitwise may not be for everyone — namely folks that aren’t prepared to invest in the long-term would likely be better off with another platform like Fundrise or better off simply investing in publicly traded REITs, however for folks who want to invest over the long-term and have a multi-year time horizon, and want well managed office and commercial property exposure, then Streitwise is a fantastic choice.
The way we look at it, as folks who don’t want the hassle of managing our own real estate investments, is that it’s good to have exposure to both residential and commercial/office properties, and thus if you do not have a rental property of your own then it’d likely be wise to invest in residential real estate through a platform like Fundrise as Streitwise does not include residential properties — however we’d say having a portion invested in commercial/office-type properties is essential and streitwise is arguably the best choice for that portion of a REIT portfolio.
We’d argue if you like the offerings Streitwise has then it’s reasonable to invest up to 30% of ones real estate portfolio into Streitwise, however a bit more wouldn’t be particularly harmful – just a bit riskier due to lower diversification – if need be, however we’d aim to keep our Streitwise investments between 20% and 30% of our real estate portfolio currently as their performance seems reliable and good and they offer good office + commercial property exposure that is otherwise hard to achieve.
Streitwise Review FAQ's:
Below we’ll go over the FAQ’s we’ve been asked, or encountered, or even had asked ourselves about Streitwise when we first started checking them out and as we used them — If you have other questions feel free to contact us and we’ll get back to you as soon as we can — and likely even add our answer down below.
What is the minimum investment required to invest with streitwise?
The Minimum to invest with Streitwise varies due to the NAV to buy into the fund, however generally sits right around $5000 -- usually a little bit higher due to appreciation of the properties. You cannot invest less than $5000~ with them currently due to the regulatory and paperwork requirements for them to onboard and maintain your investment -- below $5000 and it's not really viable from an operational perspective.This may seem unfair, but keep in mind this is just Streitwise protecting existing shareholders and investors, as if they allowed less you'd be a burden on the fund rather than an equal partner or net-benefit to the fund, meaning if they allowed people to invest less than $5000 they'd hurt other investors returns.
Does Streitwise offer any sign-up bonuses or rewards?
As far as we’re aware of Streitwise does not offer any sign-up bonuses or rewards for new users — they do however have a partner program that allows websites like this one to earn a small savings on platform fees or in some cases compensation if people sign up through their special partner links. You can use ours by clicking here, doing so will support us and help us keep these articles up to date and accurate.
Is Streitwise a Good Investment?
Using Streitwise in our experience has been a good investment for us as it’s returned quite well over the last few years — better than the broader market has historically, and overall we’re satisfied with our investment in the sector through Streitwise. It’s not our highest returning investment, but it’s a nice investment that returned above average returned and helped diversify our portfolios away from more risky volatile investments.
How long has Streitwise been around?
Streitwise in it’s current form has been around officially since 2017, however if we're being upfront with you it appears that streitwise is merely an operating entity for a public-facing REIT and the investments and management of the properties are based with an entity Streitwise refers to as a 'sponsor' -- this 'sponsor' has a track record of over 10 years of successful investments, management, and exits of commercial and office properties, all of which they've performed similarly in.
Is Streitwise Safe to Use?
While investments with Streitwise can of course just like any publicly traded REIT or other eREITs the platform it's self is safe to use and invest in -- and legitimate -- however there's risk if they (or the sponsor) performs poorly -- you could underperform the market in such cases, however as covered previously historically Streitwise (and the sponsor) has outperformed the market.
Our overall Streitwise rating
Streitwise is an overall above-average eREIT that has a slightly higher net-return compared to other eREITs and slightly lower fees than most eREITs.
While not right for all investors they’re an above-average choice for people with long-term investment horizons and want hands-off exposure to real estate – particularly non-downtown office and commercial real estate.