1. Investment Model and Options
ARK7: ARK7 focuses primarily on residential properties, allowing investors to purchase shares in individual houses or apartments. This model offers transparency in where your money is going, and investors can choose properties based on location, expected returns, and price per share.
Fundrise: In contrast, Fundrise operates on a portfolio basis, where your investment is spread across a number of properties within a fund. This approach diversifies risk and is less hands-on than selecting specific properties. Fundrise offers several fund options, each targeting different levels of growth and income, catering to both conservative and aggressive investment strategies.
2. Minimum Investment
ARK7: One of ARK7’s advantages is its low entry barrier, with minimum investments as low as $5 to $100 per property share, making it accessible for beginners or those with limited funds.
Fundrise: Fundrise also offers a relatively low minimum investment, starting at $500 for its basic plan, which still makes it accessible but requires a bit more capital upfront compared to ARK7.
3. Fees and Expenses
ARK7: ARK7 charges a 1% annual management fee on the invested amount, which is relatively straightforward. There are no additional fees for buying shares or withdrawing earnings, making the cost structure simple and transparent.
Fundrise: Fundrise’s fee structure includes an annual 0.85% asset management fee and a 0.15% annual investment advisory fee, totaling 1%. Additionally, there may be other fees associated with the sale or liquidation of assets under certain conditions.
4. Liquidity and Flexibility
ARK7: ARK7 offers monthly redemption opportunities, which is fairly flexible for real estate investment platforms. However, the ability to sell shares is subject to market conditions and buyer availability.
Fundrise: Fundrise has a redemption program that allows investors to request withdrawals quarterly, but it comes with limitations and potential penalties, especially if the withdrawal is made within five years of the investment.
5. Potential Returns and Performance
ARK7: Returns on ARK7 depend on the rental income and potential appreciation of the specific properties invested in. Investors receive monthly rental dividends, and any appreciation gains are realized upon the sale of the property.
Fundrise: Fundrise reports average annual returns ranging from 8.7% to 12.4% since its inception, depending on the market and the specific eREIT or eFund. These returns include dividends and appreciation, and have historically been robust across market cycles.
6. User Experience and Support
ARK7: ARK7 offers an intuitive online platform with detailed information about each property, including earnings history and property management details. Customer support is reportedly responsive and helpful.
Fundrise: Fundrise provides a user-friendly interface with comprehensive tracking tools for performance and earnings. It also offers extensive educational resources for new investors, which is a significant plus for those new to real estate investing.
Weighing Your Options
Choosing between ARK7 and Fundrise depends largely on your investment style, financial goals, and the level of involvement you desire in your investment. If you prefer selecting individual properties and have a smaller amount to invest, ARK7 may be the better choice. If you’re looking for a hands-off investment that offers diversification across a portfolio of properties, Fundrise might be more suitable.
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Toi Williams
Toi Williams began her writing career in 2003 as a copywriter and editor and has authored hundreds of articles on numerous topics for a wide variety of companies. During her professional experience in the fields of Finance, Real Estate, and Law, she has obtained a broad understanding of these industries and brings this knowledge to her work as a writer.
Thank you for the clear explanation of these programs. I started using Ark7, but I’m not sure what the bid/ask yellow and green line is for each property in the marketplace. Can you provide some insight into how that works and what’s a strategy to use for investing there?