Today, an estimated 87 million Americans – or roughly 44% of American households – own shares of various Real Estate Investment Trusts (REITs), giving investors of all sizes access to income-generating commercial real estate investments.
REITs are designed not only to offer investors exposure to cash-flowing properties, they’re structured to offer diversified exposure to the asset class of real estate. Unlike direct property ownership, this exposure reduces the risk taken by each individual investor while still providing access to real estate’s earning potential. Also, REITs typically offer a much lower investment minimum than direct property ownership.
For these reasons among others, REITs offer the simplest, most cost-effective way for many investors to add real estate to an investment portfolio. But not all REITs are created equal and earning potential varies based on several factors, such as an investor’s position within the value chain and costs and fees.
Fundrise’s proprietary eREITs® are the next evolution in REITs, combining innovative technology and federal regulation advancements to remove layers of middlemen and provide investors access to a higher position in the value chain of a real estate investment, all at lower costs.
What makes Fundrise eREITs® unique?
- No more middlemen: Fundrise originates and manages its own investments and offers the portfolios that contain such investments directly to investors on the Fundrise platform. By streamlining the investment process and performing hands-on work in-house, Fundrise has removed layers of middlemen — and their fees — ultimately positioning investors to earn better potential returns at lower costs.
- Direct access to private equity: Instead of following the traditional public market path, Fundrise leverages federal regulations and proprietary technology to originate real estate investments in the private market and distribute them directly through an online platform. In other words, Fundrise offers a way to buy straight from the provider rather than through a broker. This places the investor higher in the value chain before several organizations can take a cut of the return potential in the form of costs and fees. This isn’t possible in public market REITs, which are brought to market under a middleman-heavy, high-cost model. Fundrise pioneered this level of access, giving investors the ability to invest in private market real estate with as little as $500.
- Radical transparency: Part of the Fundrise mission of building the best real estate investment experience includes offering a new level of transparency in the investment industry. The Fundrise real estate team actively manages each asset acquisition, progression, and completion, resulting in a unique and evolving portfolio. Throughout this progress, from beginning to end, the Fundrise team provides ongoing and in-depth reporting, so investors have full visibility into their investment portfolio and each asset that comprises it.
- 20% tax deduction potential on income: Beginning in 2018, many, but not all, REIT investors can claim up to a 20% tax deduction on qualifying earnings from loan interest and rental payments thanks to the pass-through business structure that many REITs use. Dividends paid from Fundrise eREITs are expected to qualify for this preferential tax treatment for the benefit of investors.
If you’re interested in learning more about how Fundrise compares with the traditional public market REIT model, we make an in-depth comparison between Fundrise eREITs® and one of the largest public investment vehicles on the market, the Vanguard REIT ETF, here.
Fundrise eREITs® give investors of all sizes the opportunity to diversify into private market real estate using portfolio options to match their personal investment goals. In just a few clicks, you can get instant diversification into a portfolio of private market real estate with the potential to earn higher, more consistent returns over time – all through a simple online platform.
Welcome to the future of real estate investing.