Real estate investing offers some of the greatest returns for any investor. In our Fundrise review, we saw that this is one of the best crowdfunding investing platforms around. It is one of the best ways to diversify in real estate.
Yet many investors are missing out on the real estate aspect of a balanced portfolio, with only 63% of Americans owning a piece of coveted bricks and mortar.
These are the three best investment strategies to help maximize Fundrise’s returns.
How do I know which strategy is right for me?
The outcome of your goals will determine the strategy you choose. Investors should set a clear goal before they decide which strategy to use.
Ask some important questions, such as:
- Do I need more money for my retirement?
- Are I planning to pay a deposit for my first home?
- What will I do with my children’s college funds?
It’s not about how much money you have, but what end result is most important to you. Think about these things.
Also, consider what your risk tolerance is. The rule of thumb is that the safer your investments are, the older you should be. Because they are more likely to be able to take on greater risk, younger investors have the ability and time to make a recovery if something goes wrong.
Fundrise Investment Strategy #1 – Build a Supplemental Income
The supplemental income strategy focuses less on real estate appreciation and more on building a supplemental income. If you’re someone who wants to create a passive income stream for yourself, this is the strategy for you.
In other words, you’ll be focusing on Fundrise dividends. This plan emphasizes equity more than on debt profiles.
The Fundrise investment you’ll be investing in is the eREIT. You can capture appreciation with equity investments, but that is more of a bonus than the ultimate goal.
When you invest this way, you’ll be concentrating on the large, regular dividend payments. While you might still get a lump-sum payment through appreciation at the conclusion of your project, these payments will be much smaller than those received with other strategies.
Fundrise Investment Strategy #2 – Long-Term Growth
For someone who’s saving for retirement or to buy that holiday home on Lake Tahoe, the long-term growth plan could be the best strategy. Real estate experiences fewer booms and busts than the stock market, but it’s always delivered incredible returns over the decades while being a relatively low-risk investment.
Real estate investors look for long-term gains and not regular dividends. While these eREITs focus on long term appreciation of real property, some minor dividend payments may be possible.
Although this strategy may not be the best for earning passive income, and can help you become financially independent, the most potential appreciation returns are possible.
Fundrise Investment Strategy #3 – Growth & Income
Sometimes, you want the best of both worlds. This balanced plan is the best option for you if you don’t have a specific financial goal.
You should take into consideration historical Fundrise performance and consider that this is a more risky option than simply building a supplemental source of income. For its returns, it’s relying on capital appreciation. If this doesn’t happen, your returns from this strategy will be minimal.
If you choose to go for a balanced strategy, ensure that you set different expiration dates for each property in your portfolio. This helps balance some of the risks.
Fundrise cannot guarantee financial success. Real estate investments may lose money.
Are Debt-Investing Safe?
You’ll notice that we’ve made mention of debt investing comprising various parts of these strategies. Debt investing may sound scary, but it’s not as risky as you might think.
In a nutshell, as an investor, you’re lending money to a developer. You make your money by lending money to developers. The developer then pays you back the interest. With interest rates at near-zero, debt investing’s returns are lower.
Thankfully, when asking, “Is Fundrise legit?” in this scenario they pay special attention to their debt investments. Their team goes the extra mile to ensure that not only each investment offers good returns but also that they’re safeguarding against losses.
Fundrise was highly praised in our Fundrise Review. The platform’s diligence level is far superior to its competition and allows investors to place their investments with confidence.
The Bottom Line
Investing with Fundrise is one of the easiest ways to diversify your portfolio and gain exposure to the real estate sector.
There is very little risk involved with Fundrise investments. The fundrise returns are reasonable high. It’s why hundreds of thousands of Americans now rely on the platform to deliver consistent profits.
If you want to get started with real estate investing, follow this Fundrise link.