Fundrise vs Arrived Homes [2024] Arrived Homes vs Fundrise

In recent years, house prices in the U.S. have increased by 3.1%. Which means it’s a good time to invest in real estate!

But how? You need serious money for that, right?

Wrong! With real estate platforms like Fundrise and Arrived Homes, you can start investing with $100 or less.

These companies let you join forces with other people to invest in properties. It’s crowdfunding – real estate style. 

Below, I’ll walk you through the details of Fundrise vs Arrived Homes. Once you understand each business model (plus the potential returns), you’ll know which platform is better for you. 

Fundrise vs Arrived Homes Overview

Fundrise and Arrived Homes appeal to similar types of clients. Both prioritize accessibility by letting non-accredited investors get involved in the real estate game with small amounts of money. 

There are also some key differences in the Arrived Homes vs Fundrise debate. The biggest one? Probably that Arrived Homes lets you invest in individual properties, while Fundrise is only for real estate investment funds with multiple properties included. 

Let’s dig deeper into the Fundrise vs Arrived Homes comparison by examining how each platform functions.

What is Fundrise and How Does Fundrise Work?

Fundrise is a real estate investment platform that buys and manages properties and then invites investors like you to buy into the venture. 

With Fundrise, you don’t choose individual properties. Instead, you invest in a private real estate investment trust (REIT) made up of multiple real estate assets. That means your returns will depend on the portfolio as a whole, not a single property.

Fundrise’s portfolio is worth $7 billion, and it contains 290 active projects, including:

• Multifamily homes
• Single-family homes
• Industrial properties

Interested? Here’s how to invest with Fundrise:

1. Create a Fundrise account. You can open a standard Individual Brokerage Account or go for a tax-advantaged Individual Retirement Account (IRA).
2. Invest. You’ll be able to choose between four different investment plans – including a “Supplemental Income” plan that aims for immediate earnings and a “Long-Term Growth” plan that prioritizes gradual appreciation. 
3. Collect your returns. If the property makes money, you’ll receive quarterly dividends. 

What if you want to “liquidate” your investment to get all your money back? Unfortunately, it’s not something you can do with the click of a button. A real estate investment with Fundrise is meant to last at least 5 years. You can request an early liquidation, and with some Fundrise REITs, you’ll have to pay a penalty (1% of total share value). 

*Note: Fundrise also offers investments in private credit and venture capital. This article focuses on Fundrise’s real estate investments since they’re most relevant to the Fundrise vs Arrived Homes conversation.

For more information on the platform, read this complete Fundrise review. 

Sign Up for Fundrise Here

What is Arrived Homes and How Does Arrived Homes Work?

Arrived Homes is a crowdfunding investment platform that focuses on rental homes and vacation properties. The idea is that you join with other investors to buy just a portion of a property.

Investing with Arrived Homes is designed to be simple and convenient. You won’t have to go through a long process of searching for potential properties on your own. 

Once you’ve made a purchase, property managers take care of the day-to-day affairs. That means you’ll enjoy the fun part of being a landlord (earning money), without having to deal with the bad parts like calls from angry tenants. 

Perfect, right?

You don’t have to be an accredited investor to use Arrived Homes, and the minimum investment is only $100. So, both platforms in the Fundrise vs Arrived Homes debate are super accessible!

There are three types of investments you can make through Arrived Homes:

• Single-family residential homes
• Vacation rentals
• Real estate funds – which include multiple properties managed by Arrived Homes

When you invest in single properties through Arrived Homes, you buy an actual portion of the limited liability company (LLC) that owns the home. So, yeah – your stakes in the project are totally legit!

Now that you have a general idea of how Arrived Homes works, let’s take a look at the 4-step process for investing:

1. Browse available investment properties. All of the projects have been vetted ahead of time.
2. Select the shares you want to buy. You should base your decision on your sense of which properties are most likely to make money.
3. Sign the paperwork and complete the investment. The minimum investment is just $100, but you can invest more if you want to.
4. Earn income. Since the investments are all in rental properties, you can expect to earn your share of the rent. You’ll receive the money quarterly.

With Arrived Homes, the plan is usually to hold onto a property for 5 – 15 years and then sell it. If the value of the property has increased since you made the investment, you’ll get your share of the profit.

Be aware that 5 – 15 years is a long time to have money invested in a project. This isn’t something you can pull out of at a moment’s notice. Both platforms in the Arrived Homes vs Fundrise are long-term investments. That’s not necessarily a problem, but something you should know going in!

Looking for more investment ideas besides just real estate? Check out this article on different types of alternative investments.  

If precious metals is an alternative investment that appeals to you, our Goldco vs Augusta Precious Metals comparison can get you up to speed there.

And if you’d like to learn about wine and whisky as an alternative investment, our Vint vs Vinovest comparison can help.

Fundrise vs Arrived Homes Fees

Fees are a major point of difference in the Arrived Homes vs Fundrise debate. Both platforms involve costs, of course, but Fundrise’s fees are lower and simpler. I’ll explain more below. 

Fundrise Fees

The fees associated with Fundrise’s real estate investments are super straightforward and pretty reasonable, too.

Here are the fees you can expect to pay:

• A “management” fee of 0.85% per year
• An “advisory” fee of 0.15% per year

Add those together, and you’re looking at a total annual fee of 1%. 

Not bad, right? If you invested $1,000 through the platform, you’d only pay $10 per year.

Arrived Homes Fees

When you invest through Arrived Homes, the fees and expenses can be complicated. 

Why? Because with Arrived Homes, you’re actually buying a percentage of a company that owns real estate. That means you face your share of the associated expenses – and there can be a lot of them.

When you first buy into a property, you’ll have to pay a one-time sourcing fee. The size of the fee depends on the type of property you’re investing in:

• Long-term rental homes have a one-time sourcing fee of 3.5% of the property purchase price.
• Vacation rentals have a one-time sourcing fee of 5% of the property purchase price. 

These sourcing fees have already been included in the share prices listed, so you don’t have to add them yourself. 

You’ll also owe Arrived Homes a quarterly “Assets Under Management” (AUM) fee, which is 0.15% of the purchase price for long-term rentals. And with vacation rentals, you’ll owe a “gross rents fee,” which is 5% of gross revenue from the property. 

On top of that, there are additional costs associated with buying and owning a property. You could have to pay closing fees, escrow fees, and property taxes. 

You’ll also have to pay a property management fee, which varies by property type:

• Long-term rentals: 8% of the gross rental income
• Vacation rentals: 15% – 25% of gross rental income (it depends on the market)

And you could be responsible for your share of other one-time expenses, including repairs and lease renewals. 

Fundrise vs Arrived Homes Returns

You can’t settle the Arrived Funds vs Fundrise question without considering returns. After all, earning money is the whole point of an investment!

Luckily, both platforms have released their average annual returns. So, you don’t have to decide the Fundrise vs Arrived Homes debate on “vibes” or conjecture. We’ve got cold, hard data to consider.

Fundrise Returns

Here are Fundrise’s average annual returns for each of the past 5 years:

• 2023: -7.45%
• 2022: 1.50%
• 2021: 22.99%
• 2020: 7.31%
• 2019: 9.16%

In 2021, investors on Fundrise earned 22.99%. But in 2023, they came out behind by 7.45%.

The moral of the story is this: Real estate investments are inherently volatile and risky, even when you use a platform like Fundrise. The properties in the Fundrise portfolio were chosen to maximize returns and provide stability – but sometimes, investments simply don’t pan out. 

Fundrise investors generally come out ahead in the long run. Remember, real estate investments on the platform are meant to be held for at least 5 years. That means a single bad year like 2023 shouldn’t ruin your investment’s overall performance. 

Try Fundrise Today!

Arrived Homes Returns

Since Arrived Homes lets you invest in specific properties, there’s no standard return that investors can expect. It all depends on how your particular properties fare. 

That said, Arrived Homes has estimated the average annual return for its different types of properties:

• Single-family residential properties: 6% – 12%
• Vacation rentals: 5.5% – 15%

The properties you invest in could do much better (or much worse) than that average. The best-performing property on Arrived Homes has earned 152.7% in total returns. That’s a crazy-successful investment!

Then, there’s Arrived Home’s worst-performing asset, which has lost 21.8%. 

So, you need to enter the investment understanding that there are risks as well as potential rewards.

Pros and Cons of Fundrise vs Arrived Homes 

Pros and Cons of Fundrise

Both sides in the Arrived Homes vs Fundrise debate have their strengths and weaknesses. Taking these points into account can help you decide which platform is best prepared to meet your needs. 

Fundrise Pros

• The minimum investment is just $10. That means Fundrise wins this portion of the Fundrise vs Arrived Homes debate.
• The fees are simple – and relatively low. You’ll only have to pay an annual advisory fee and an annual management fee, which add up to 1% per year.
• You don’t have to be an accredited investor. This is true for both platforms in the Arrived Homes vs Fundrise conversation. 

Fundrise Cons

• You can’t invest in individual properties. With Fundrise, it’s all about real estate investment trusts (REITs).
• Your investments could lose money in a bad year. On average, investors lost 7.45% in 2023. But the average Fundrise investor came out ahead from 2019 – 2022, so it’s not like losing money is the norm. 
• The investments are “illiquid.” That means you can’t take your money out whenever you feel like it.  

Join Fundrise Here

Pros and Cons of Arrived Homes

Arrived Homes Pros

• You can invest in specific properties. Instead of having to buy into a general portfolio, you can pick the actual projects that appeal to you.
• You should earn consistent rental income. As part-owner of the property, you’re entitled to your share of the tenant’s checks.
• You don’t have to be an accredited investor. It can be tough to buy into specific properties without SEC accreditation, but Arrived Homes makes it possible. 

Arrived Homes Cons

• There are lots of fees and expenses. Since you’re buying into the actual LLC that owns the property, you’ll be on the hook for management fees and other operating costs.
• The expected “hold period” is 5 – 15 years. That means you’re expected to hold onto the property for at least half a decade.
• With individual properties, there’s no process for getting your money out early. Once you buy into a project, you’re in for the long haul. (You can redeem your shares for an early exit from a “residential fund” investment.)

Fundrise vs Arrived Homes Reviews

Let’s take a closer look at the Fundrise vs Arrived Homes debate by checking out some user reviews.

Fundrise gets only 1.8 stars on the popular review site Trustpilot – but there are some super positive reviews mixed in.

One user gave Fundrise 5 stars, saying they went into the investment understanding that it’s highly illiquid. They also praised the Fundrise app for making the investing process easy.

Another user agreed that Fundrise provides an “easy way to invest in real estate.” In their 5-star review, they pointed out that the experts “handle everything for you.”

In a 2-star review, someone said their Fundrise investments started losing money after 2021. 

Luckily, they were able to get out with a total return of 6%. 

Let’s switch gears and look at some Arrived Homes reviews. 

The platform has 3.7 stars on Trustpilot. Only one user has left a review, but it’s a positive one. The person gave Arrived Homes 5 stars and praised the “great concept.”

People have also reviewed the Arrived Homes app through the Apple App Store. One user left a 5-star review praising the platform’s customer service and convenience.

Another Arrived Homes user said, “This app makes investing in real estate so easy and fun.” They also called the app “beautifully designed and super easy to use.” 

Usually, I’d share some negative Arrived Homes reviews, too. But after searching high and wide on Trustpilot and the Apple App Store, I couldn’t find any! 

Fundrise vs Arrived Homes Reddit

Someone started a Reddit thread by asking for Fundrise vs Arrived Homes comparisons. 

One person said that Fundrise wins the Fundrise vs Arrived Homes competition. They didn’t provide a lot of evidence, but they praised Fundrise for making real estate investments accessible to “everyday folks.”

Some other people advised against using either platform in the Arrived Homes vs Fundrise conversation. They said typical REITs are better.

Fundrise vs Arrived Homes: Which is Better?

After looking at all the details, I’ve decided there’s no clear winner in the Fundrise vs Arrived Homes debate. 

So, which one should you use? It depends on your goals and expectations.

Are you determined to invest in specific properties? Do you think you could identify a property that’s especially likely to produce above-average returns? In that case, Arrived Homes is the better platform – since Fundrise doesn’t let you invest in individual properties at all.

But what if a fund with multiple properties sounds more up your alley? Maybe you don’t want the pressure of choosing a specific property, and you’d rather leave it in the hands of the experts. That means Fundrise, with its private REITs, is perfect for you.

Don’t forget – there are plenty of investment opportunities outside the Arrived Homes vs Fundrise conversation. For more ideas, read this article on the best way to invest money. 

Commonly Asked Questions About Fundrise vs Arrived Homes 

What is The Difference Between Fundrise and Arrived Homes? 

The main difference in the Fundrise vs Arrived Homes debate is the way that investments are packaged. With Fundrise, you invest in a group of properties at once. Arrived Homes lets you invest in individual properties of your choice. 

Is Investing in Arrived Homes Worth It?

Investing in Arrived Homes is generally worth it. Average annual returns range from 6% to 15%, and some properties earn significantly more. That said, it’s possible for an investment with Arrived Homes to lose money.

If you’d like to learn about investing with the help of AI, check out our Streetbeat review.

Arrived vs Fundrise vs Roots?

Fundrise and Roots are similar in that they offer real estate investment trusts (REITs), meaning you and other people invest in a whole bunch of properties at once. Arrived is a little different in that they let you invest in individual properties if you want.

Arrived Homes Lawsuit?

I couldn’t find reports of a lawsuit involving Arrived Homes. In general, the real estate investment platform has a solid reputation, and the Better Business Bureau (BBB) gives it an A+ grade. 

Arrived Homes Reviews?

Arrived Homes reviews from users are generally positive. People are especially excited about how convenient and user-friendly the platform is. Arrived Homes promises a simple investor experience, and it seems to be delivering!

Arrived Homes vs REIT?

Arrived Homes and REITs both make real estate investing more accessible, but they work in different ways. With a REIT, you buy shares of a massive fund containing lots of properties. With Arrived Homes, you can join other investors in buying individual rental properties and vacation rentals.