DiversyFund vs. Fundrise: Which Way Should You Buy Real Estate?

When comparing DiversyFund vs. Fundrise, you’ll find that one is the clear winner for investors who also want access to sophisticated investment options.
Updated Sept. 22, 2023
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DiversyFund vs. Fundrise

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Real estate investing platforms like DiversyFund and Fundrise enable people to get into real estate with $500 or less. Both are real estate crowdfunding platforms that acquire and manage properties on behalf of investors. DiversyFund focuses on Multifamily properties, while Fundrise offers investments in commercial and residential real estate.

Both DiversyFund and Fundrise can help you generate passive income from your invested money without placing a major investment in a single property or dealing with the hassle of managing a rental property. However, like all investments, there is a risk of losing money or not seeing returns.

Let's explore the pros and cons of DiversyFund versus Fundrise so you can decide which one is right for you.

Diversyfund - Our pick

Best for: Long-term investors who don't want the hassle of being a landlord 

In this DiversyFund vs. Fundrise comparison

DiversyFund vs. Fundrise

DiversyFund and Fundrise are part of the growing ecosphere of crowdfunded real estate platforms. These platforms seek to democratize real estate investing by offering the average investor the ability to open an account with low minimum investments.

Although DiversyFund and Fundrise have a lot of similarities, there are distinct differences as well. This table helps to compare the two companies.

DiversyFund Fundrise
Minimum investment requirement $500 $10
Annual fees
  • 2% asset management fee
  • Up to 10% organization and offering expense reimbursement fee
  • 0.15% advisory fee
  • 0.85% to 1.85% management fee
Available assets
  • Multifamily properties
  • Multifamily properties
  • Single-family properties
  • Industrial properties
  • Private equity in tech companies
Available account types 
  • Individual account
  • Joint account
  • Custodian account
  • Trust account
  • Entity account
  • Individual account
  • Joint account
  • Entity account
  • Trust account
  • Individual retirement account
Holding period
  • At least five years
  • At least five years
Withdrawals allowed
  • Not allowed
  • Allowed during the 90-day introduction period with a 1% penalty
  • Investors may request withdrawals, but they are not guaranteed
  • Withdrawals before five years may be subject to a penalty
Who can invest?
  • U.S. citizens
  • U.S. residents
  • Valid U.S. entities
  • Investors must be 18 or older
  • U.S. citizens
  • U.S. residents 
  • Valid U.S. entities
  • Investors must be 18 or older
Accredited Investor required? No No
Best for... Long-term investors who want to invest in real estate without conducting individual property research. Long-term investors who want the option to invest in advanced real estate strategies.
No No
Visit DiversyFund Visit Fundrise

DiversyFund: What it is and how it works

DiversyFund is a real estate investing platform that invests in apartment buildings and multifamily properties via real estate investment trusts (REITs).

The company's growth REIT acquires multifamily apartment buildings that are likely to offer good growth opportunities. These properties may need improvements to increase their cash flow. As the rental income increases, the building's value increases as well. 

Income from these properties is reinvested monthly to finance improvements until the asset is sold. When properties are sold, the accumulated dividends and capital appreciation are distributed to investors. At that time, you can cash out or reinvest with DiversyFund.

Pros Cons
  • Start investing with as little as $500
  • Simple investing platform that offers a hands-off solution
  • Educational materials can help expand your knowledge
  • Illiquid investments as no withdrawals are allowed
  • Investors cannot choose investments
  • Retirement accounts not available

Who can open a DiversyFund account?

Non-accredited investors can invest with DiversyFund, and the platform is open to U.S. citizens and residents. Additionally, DiversyFund allows valid U.S. entities operated by non-U.S. persons to open accounts.

Keep in mind
You must be at least 18 years old to invest with DiversyFund. Minors are not allowed to open an account. However, they can be designated as a beneficiary. The platform also offers custodian accounts.

How to get started with DiversyFund

To get started with DiversyFund, you’ll need to provide an email and password as well as have your personal information on hand like your Social Security number.

You will also choose the amount of your investment. There is a minimum investment of $500 and a maximum of $1 million. According to DiversyFund, the average investment is $1,500.

You can choose to invest once or set up a recurring investment. If you're not ready to set up a recurring investment at the time of signup, you can create one later.

The DiversyFund website offers a limited number of help topics for potential and current investors. If you have questions or need help with your account, you can also contact DiversyFund via an online contact form. 

Read our DiversyFund review for more information.

Fundrise: What it is and how it works

When you invest with Fundrise, your funds are put into diversified investments known as eREITs and eFunds, both of which are professionally managed portfolios.

Fundrise investments include single-family residences, apartment buildings, and commercial properties. It also invests in private equity funds that focus on tech companies.

Fundrise offers three investment plans for investors based on their goals and other preferences. These three plans are:

  • Long-term growth: This plan focuses on long-term investment goals. Fundrise states that it may not produce much revenue in the short term, but may produce higher returns over the long term.
  • Balanced investing: This plan focuses on maintaining a balanced investment approach. Fundrise states that this plan may produce low returns in its early years with a potential for higher returns later on.
  • Supplemental income: This plan focuses on producing the most consistent returns. Fundrise states that it may offer lower total returns over the lifetime of the investment.

It also offers a fourth option that allows you to build your own investment plan by subscribing to Fundrise Pro for $10 a month.

Pros Cons
  • Minimum investment is $10
  • Three investment plans offer a variety of approaches and goals
  • IRA accounts are available
  • Early withdrawal penalty applies
  • No custodian accounts

Who can open a Fundrise account?

Investing with Fundrise is open to any U.S. citizen or permanent resident currently residing in the U.S. However, you must be 18 years or older.

Fundrise offers individual, joint, trust, and IRA accounts. Additionally, legal U.S. businesses and other U.S. entities may open a Fundrise account.

Keep in mind
Fundrise does not currently support investments through a self-directed 401(k) or a custodial account on behalf of a minor. Fundrise investors don't need to be accredited or have a minimum net worth. 

How to get started with Fundrise

To get started with Fundrise, you’ll need to provide an email and personal information. You’ll also need to indicate your investment experience and choose your goal for investing with Fundrise. You’ll then be asked your time horizon for your investments and how much you plan to invest with Fundrise each year.

Based on the answers you provide, you'll receive a suggested investment plan from Fundrise. However, you can change your selection.

The Fundrise website offers an extensive catalog of support articles. This should make it easy to find answers to the questions you have. If you have further questions, you can also send a message via an online contact form.

Read our Fundrise review for more information.

3 important differences between DiversyFund and Fundrise

DiversyFund and Fundrise have many similarities, but there are three important differences that you should know about when deciding between the two platforms.

1. Features

DiversyFund is a straightforward real estate investing platform. No matter the size of your investment balance, you'll receive the same set of features and be able to invest in the same real estate projects. Investors can track their accounts online or through a mobile app.

Fundrise provides investors with more options, depending on your investment approach and goals. It has a very low minimum investment amount of $10. With three investment plans to choose from, Fundrise can be an attractive option for a broad spectrum of investors. The in-app news feed keeps investors up to date on individual investments as well as new assets added to the real estate portfolio.

Winner: Tie. For beginners looking for a simple real estate investment opportunity that has fewer choices, DiversyFund may be better for you. If you’re looking for a real estate investing platform that provides more options, then Fundrise may be better for you.

2. Fee structure

DiversyFund charges a 2% asset management fee. It also charges up to 10% in the organization and offering expense fees that cover various costs. 

Fundrise charges a 0.15% annual advisory fee. It also charges between 0.85% and 1.85% in annual management fees. 

Winner: Fundrise because of its lower fees.

3. Types of investments

DiversyFund specializes in apartment buildings. It seeks out apartment complexes that have good growth potential. After the acquisition, DiversyFund may perform renovations to attract more tenants and increase the rent prices. The combination of these two factors may increase the revenue it generates from the properties.

Fundrise invests in a broad selection of real estate properties, including commercial real estate, apartment complexes, and single-family homes. Additionally, it also gives access to private equity investments in tech companies.

Winner: Tie. If you want a simple core portfolio that is focused on one type of investment property, DiversyFund might be better for you. If you want to invest in a variety of real estate properties and have access to more advanced strategies, then Fundrise may be the better investment platform for you.

DiversyFund vs. Fundrise: which should you choose?

If you are investing money and choosing between DiversyFund vs. Fundrise, you should keep in mind that Fundrise is the option with a track record of success and more established systems in place.

You can start with DiversyFund with an initial investment of just $500 and with Fundrise for just $10. However, Fundrise is the only one that provides investors access to various investment strategies. DiversyFund doesn't provide various investment plans. All investors are investing in the same assets.

Fundrise invests in various types of real estate, including commercial and residential properties. For investors who prefer a singular focus on apartment buildings, then DiversyFund is a solid choice.

FAQ about DiversyFund vs. Fundrise

Can you really make money with Fundrise?

Yes, investors may make money with Fundrise through regular dividend payments and through capital appreciation when properties are sold. Keep in mind that all investments come with a level of risk and a potential for losing money. Additionally, past performances don't guarantee future returns.

Is DiversyFund a good investment?

DiversyFund can be a good investment for the right investor. Investors should have a long-term horizon of five years or more because there are no withdrawals allowed. Investors can invest in apartment buildings through DiversyFund for as little as $500. Remember that all investments carry a risk and no legitimate platform can guarantee returns.

How do I get money out of Fundrise?

You can get money out of Fundrise by logging into your account and requesting a withdrawal. Shares held for less than five years may be subject to a penalty. Redemptions may be limited and may not be approved right away. Because of this, you should consider only investing money that you can invest for the long term.

What is the average annual return on Fundrise?

Fundrise’s dividend yield depends on which eREIT or eFund you're investing in. As of May 5, 2023, it has an average income return of 5.29% over a period stretching from 2017 to the first quarter of 2023.

Do DiversyFund and Fundrise pay dividends?

Dividends are the share of the income that is returned to investors. Both DiversyFund and Fundrise provide dividends to investors. DiversyFund automatically reinvests all dividends into its investments until a property is liquidated. Fundrise makes quarterly dividend payments to investors in cash. Fundrise investors may elect to auto-invest their dividends through its dividend reinvestment program.

Bottom line: DiversyFund vs. Fundrise

With the rise of technology, aspiring real estate investors can now more easily add diversification to their portfolios without a large investment and without taking on debt. You can even invest in real estate without buying property. Real estate can now be a part of just about anybody's personal finance plan and long-term investment strategy. We have real estate crowdfunding platforms and REITs to thank for this.

As with the stock market, private REITs carry investment risk and the potential for loss, so you should always do your due diligence before deciding where to put your money. They also have limited liquidity. But online real estate investing platforms like DiversyFund and Fundrise can help take the hassle out of investing through their technology and professional management expertise. Investors can invest in a diversified portfolio of real estate for as little as $10.

If you’re looking to build wealth and you're investigating how to invest in real estate, it could be worth your time to get to know both these platforms and decide if one of them might be a good component of your alternative investment portfolio.

Author Details

Lee Huffman Lee Huffman is a former financial planner and corporate finance manager who now writes about early retirement, credit cards, travel, insurance, and other personal finance topics. He enjoys showing people how to travel more, spend less, and live better. When Lee is not getting his passport stamped around the world, he's researching methods to earn more miles and points toward his next vacation.

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