Fundrise vs. Rental Property (my actual earnings with each)
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Fundrise vs. Rental Property (my actual earnings with each)


in this video we’re gonna help you
decide if you should invest in Fundrise I’m going to tell you about my
experience and I’m going to compare the numbers of my Fundrise earnings versus
my actual physical rental property earnings so you can just kind of get a
ballpark for how the to compare and then you can make your own decision so if
that sounds good just hang tight and we’re just about to start and if we haven’t met my name is Bob Lotich I’m super glad you’re here and in this channel
what we do is we give you practical tips and strategies on how to put more money
in your pocket and then we also talk about some of the timeless Biblical
principles on how to manage that money wisely so if that sounds good definitely
hit that subscribe button so you can hear from us as you create new content
and as we’re going through this if you have any comments or questions about it
and about my experience definitely leave them down in the comment section down
below I will get back to you and answer you as soon as possible and I’d love to
just kind of make that comment section a good resource for other people who are
just kind of investigating Fundrise and trying to figure out if it’s actually a
good investment so before we dive into my current kind of earnings with
Fundrise and comparing them to a rental property let me step back just a little bit
so basically in 2015 we lived in St. Louis and we moved to Nashville we kept
our old house in St. Louis and we turned it into a rental property that was my
first kind of stab at having a rental property and trying to see if we could
earn some passive income from doing that because I wanted to be passive we hired
a property manager who took 10% of all the monthly rents that way I was able to
completely step out of it I didn’t have to deal with don’t call in the middle
the night when the plumbing broke or any of that stuff yeah and so he took care
of all that he took care of finding a good tenant which he actually did did a
great job found somebody who paid every single month and all was really good
with that and it was super passive and it was really convenient
so from 2015 to 2017 we had that rental property there and in 2017 I decided you
know I should actually calculate the returns and see we’re actually earning
from this property but the amount of cash we have invested in it see what the
actual return is so it took some time just kind of adding everything up and
figuring out what the total expenses were what the income was kind of getting
that and then figuring out our actual return and so after I calculated it all
up I determined that our earnings were about 5.4% on the cash that we had invested into the property now somehow in my mind
I had been thinking that we were earning about 10% on our cash invested and it
must be because there were more expenses I’m not really sure why but I was just
way off and we were actually only earning 5.4 percent on that investment
obviously we didn’t pick this rental property because it was one of the best
earning ones it was because it was the easiest it was our property we already
owned it was easy to just transfer it into a rental property and I do know
that we could have bought another property that could have had a higher
ROI but this is what we had and this is what we started with and this is what
we’re now in the middle of 2017 I decided to open a Fundrise account and
just out of curiosity and I kind of wanted to take the rent payments that I
was getting and I would just start reinvesting the rent payments into Fundrise and then once I had enough to buy another property I would do that and
when I’ve opened my Fundrised account I believe I needed to have $10,000 in
order to open the account and they’ve since lowered that to like 500 I think
and as you would expect from one of these new kind of financial startups the
account opening process was super easy super quick and it was just a really
really good experience just kind of opening the count and and honestly just
getting started with them was really easy so I don’t know exactly what I was
thinking in terms of earnings from fund rise when I signed up I’m really I was
just trying to reinvest some of the money that was coming from my rental
property but they pay out every quarter and as these payment started coming in
it’s like this kind of fun we’re actually earning some money here and I
should also note that Fundrise has three different investment options that
you can choose from so they have the supplemental income which is kind of the
lower risk one and the balanced investing which is the middle risk and
then the long-term growth which is a little bit of a higher risk one and I
opted for the balanced investing option with mine so here’s a look at their
projected returns for the balanced investing option so as you can see this
is way better than my rental property was and so I decided to actually
calculate the returns that I was getting from Fundrise and so once I went back
and actually ran the numbers on this I actually found that my earnings from the
dividends only with Fundrise was 6% 6.0% versus the 5.4% on my rental property so in both of those scenarios
appreciation is not really taken into consideration but my hunch is is that
appreciation for a lot of the properties that Fundrise is investing in is actually
going to be considerably better than my property and the location
that that our property was on additionally I should add that with
Fundrise I can always change my investment option over to the higher
risk one and higher reward one and in theory increase those earnings even
higher and so for us once I kind of discovered this and just kind of saw the
simplicity of Fundrise and how easy it is and how much easier it is then having
our rental property and all the work that comes with that because the thing
that I didn’t realize being a new property owners that even with a
property manager who takes care of almost everything there’s still stuff
that comes up there’s still things that I have to deal with you know taxes and
there’s having to have a separate LLC to house it and just like a lot of just
random stuff that comes up that it’s just something I have to think about
that with Fundrise I don’t so long story short we have sold off our rental
property and we now use Fundrise as our primary means of investing in real
estate and for us I probably will get back into physical real estate at some
point but for right now the simplicity of using Fundrise it’s just really
attractive to me and so that’s why we’re kind of focused on that it’s just a
great way for people who want to get started investing real estate but don’t
want to take on the huge risk of actually buying a property and dealing
with all the stuff that comes with that like I said before if you have any
questions about fund rise that you think I can answer I’m happy to answer down in
the comments and you can definitely check out their website and find a whole
lot more we’ll have a link to it down below as well if you found this helpful
we’d love it if you leave us a thumbs up down below but that is all we have for
this video so stay tuned for the next video and I will see you there

45 Comments

  • Heather Davis

    Did you figure equity building into your 5.4% return on your rental house? You mentioned not including appreciation, but that is just the property value increases, not equity, right?

  • Jeremy Alvis

    Is your principal very liquid? If there is some sort of emergency that comes up or there is a major market correction that you want to avoid, are you able to "cash out" quickly or does it take some time?

  • Caroline McRae

    Thanks for this information. We were thinking of using our current home as a rental & buying another home. Fundrise sounds much easier & a better return.

  • Jerry Bradley

    This is our second time watching the video. We have been thinking about investing in Fundrise since watching the video the first time. I think we may finally be ready. Thank you for all your wonderful articles.

  • Chap Gary

    Hi there! I am considering real estate as well. When you're considering the 5% return on a rental property, this is just construing the profit bring made monthly, and not the fact that you will have the home as an asset in the end, correct?

  • Javier T

    I assume you did not take into account the impact of the RE on your personal taxes, if you incurred a loss and the savings on taxes from that. As you mentioned the appreciation is not taken into account either, which can be substantial if you take a 10-15, 30 yr period. Fundrise, does look simple though… Good luck.

  • ContrarianExpatriate

    The Fundrise dividends are taxed at a much higher rate. The are considered ordinary dividends, not qualified dividends which are taxed at a lower rate.

  • Kerry Watkins

    If I sell my current property and invest it in Fundrise will it be considered a non-taxable transaction due to the fact that it is still a real estate investment?

  • Zeb Davis

    In my experience, you can fairly easily outperform fundrise, however for the simplicity and convenience, it's worth it is many cases.
    Subscribed

  • Lisa F

    Good to know about this company! My husband and I invest in similar companies on the West: Capella Mortgage and JRW Investments, but we do like to diversify with owning / renting multifamily properties too 🙂

  • Corey Jordan

    Hey, bro. great video and review of Fundrise. I have been watching them for a while. They are the real deal. I do and plan on investing into them really soon (Can't wait). I also like and have invest in "Rich uncle" very good platform for crowdfunding in real estate. You can't go wrong with them both. My future
    and short term goal is to have both all points of real estate; on paper and brick and mortar. Me personal if you get all what Fundrise has to offer, supplement, balance and long-term growth and keep it for a long time and no cash dividend you will see your portfolio grow. Go FundRise!!!

  • slokytheone

    Fundrise may be very easy to open an account but is not yours ,the house was yours big diference and if you do everything correctly you dont have to pay any taxes on the earning from rent but ofcourse we like it easy that way someone elses makes the money and give us next to nothing and that why i own 7 rental propertys and manage them myself getting and astonishing return on just shy of 25% ROI + uncle sam send me all of my money from taxroll when tax time comes

  • Warren Jackson

    I'm new to all this I've recently started a Acorn account as well as a Robinhood account. I don't have a lot of money invested in Robinhood 1 share here 3 shares there. I just seen Jeff Rose and now your video on Fundraiser and am curious about it. Seems interesting thanks again for your time.

  • maxjoey sirrock

    Thank you I'm all with you with that idea I think is better a lot easier I own property and before Oh my God just trying to get the money even though I didn't have no one getting it for me it was a hassle and sometimes I had to spend more money and repairs because some people would do some damages to get upset you have to go to court this is a whole lot easier they handled the whole thing for you and you don't have to deal with these deadbeats that don't want to pay your rent oh my God and there's plenty of them out there

  • Chris Mitchell

    Hey Bob! If I start investing at the $500 level, which category would give me the best return based on your experience?

  • Kevin Nielsen

    Be sure to look into the holdings of each portfolio, fundrise shows it under the active projects of each portfolio option; also arn't most reits taxed at ordinary income which the exception of roic ( return of capital, which is essentially depreciation) or is fundrise somehow different? +1 to checking with tax advisor on pass through since it would benefit a lot)

  • Blake Jensen

    Grant Cardone has a very similar Investment account called Cardone Capitol. He's been returning 15% on average in the past few years to his investors. You guys should check him out before you make a decision

  • sayhitome

    lel nice try. fundrise gives money per referral. This guy doesnt make money saying his rental (single family home) makes more. Also, majority of benefit from a rental property is leverage. You cant get 4.5% interest leveraged mortgage on fundrise.

  • mjoseek11

    hi bob i have a question what is the point of investigating a big amount and receive less that you’ve invested in one year ? 🤔 for exemple if I invest 500 il be receiving quarterly less that i’ve invested right?

  • Kevin Edwards

    After fees w/fundrise your returns was 6%?, & before or after your property manager fee of 10%, you was left with %5.4?

  • The Money Man

    Yeah definitely going to check this out to start off into real estate 🏡 I feel like there’s a lot of risk buying into physical real estate lol but great video

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