Updated July 2019. This post tracks my experiment comparing a
Fundrise Starter Portfolio background. Despite the name, the
Here’s a recent map of locations for the holdings. Most are apartment complexes, condominiums, and hotels.
* Due to increasing popularity and the limited nature of this product, Fundrise has created the Income REIT II/III funds and Growth REIT II/III funds. My portfolio is invested in the REIT I and REIT II series of funds, but new investors will get the REIT II and REIT III series. Thus, your returns may look somewhat different than mine.
Vanguard REIT ETF background. The
Expenses. The Fundrise Starter Portfolio has an 0.85% annual asset management fee and a 0.15% annual investment advisory fee (1% “all-in” total). The Vanguard REIT ETF has an expense ratio of 0.12%, but each public REIT also has their own internal costs to manage their properties. Due to scale, I would expect the net effect of fees to be significantly higher for the Fundrise assets than for the Vanguard ETF. We will see if Fundrise can provide higher net returns for this concentrated holding. REITs may also use debt to increase their real estate exposure (leverage).
Five-year time horizon. Both Fundrise and VNQ usually announce dividend distributions on a quarterly basis. Vanguard updates the NAV daily, but Fundrise only updates their NAV quarterly. Fundrise NAVs are only estimates as there is no daily market value available (similar to your house). Therefore, I plan on holding onto this investment for 5 years at the minimum. This will allow the investments to “play out” and also avoid any early redemption fees. I will withhold any judgements until both investments are cashed out, but will provide quarterly updates.
Fundrise Portfolio performance updates. Screenshot of my most recent statement:
- 10/20/17: $1,000 initial investment – 50 shares @ $10.00/share Income eREIT and 48.78 shares @ $10.25/share Growth eREIT.
- 1/9/18: 2017 Q4 dividends of $17.98 received and reinvested.
- 4/11/18: 2018 Q1 dividends of $16.13 received and reinvested.
- 7/11/18: 2018 Q2 dividends of $17.60 received and reinvested.
- 10/10/18: 2018 Q3 dividends of $19.10 received and reinvested.
- 1/10/19: 2018 Q4 dividends of $20.08 received and reinvested.
- 4/10/19: 2018 Q4 dividends of $18.34 received and reinvested.
- 7/11/19: 2018 Q4 dividends of $17.62 received and reinvested.
- 7/11/19: Total Fundrise value $1,192 (includes reinvested dividends).
Vanguard REIT ETF performance updates. I own VNQ and the mutual fund equivalent
- 10/20/17: $1,000 initial investment – 11.9545 shares at $83.65/share.
- 12/27/17, VNQ distributed a gain of $0.012 per share, return of capital of $0.37 per share, and a dividend of $0.88 per share.
- 3/26/18: VNQ dividend of $0.71 per share.
- 6/18/18: VNQ dividend of $0.73 per share.
- 9/24/18: VNQ dividend of $1.14 per share.
- 12/14/18, VNQ distributed return of capital of $0.23 per share, and a dividend of $0.72 per share.
- 3/29/19: VNQ dividend of $0.62 per share.
- 6/27/19: VNQ dividend of $0.83 per share.
- 7/11/19: Total VNQ value $1,157 (includes reinvested dividends).
Every month or so, Fundrise sends me an e-mail with an update on a new property that they have acquired, or a property where they have exited. Both Fundrise and the ETF are completely passive holdings, meaning I have no control over what they buy or sell.
Bottom line. I’m doing a buy-and-hold-and-watch experiment where I compare investing in real estate via Fundrise direct investment and the largest REIT index ETF from Vanguard. I’ll provide quarterly updates, but more important is what happens over 5+ years.
You can learn more about
“The editorial content here is not provided by any of the companies mentioned, and has not been reviewed, approved or otherwise endorsed by any of these entities. Opinions expressed here are the author’s alone. This email may contain links through which we are compensated when you click on or are approved for offers.”
Copyright © 2018 MyMoneyBlog.com. All Rights Reserved. Do not re-syndicate without permission.