Best Fractional Real Estate Investment Platforms

Arrived Homes is a premier fractional real estate investment platform offering the opportunity to invest in pre-vetted single-family rental and vacation properties with a minimum investment of just $100, providing passive income through quarterly dividends and potential property appreciation, all while handling property management responsibilities to ensure a hassle-free experience.

Fractional real estate investment platforms provide an innovative way to access the real estate market without the hefty price tag of purchasing a full property. These platforms allow investors to purchase small shares of commercial, residential, or rental properties, often with minimum investments as low as a few hundred dollars. Opening up opportunities for both seasoned investors looking to diversify and beginners aiming to enter the real estate market with minimal risk.

In this article, we explore some of the best fractional real estate investment platforms available today, examining their unique features, investment opportunities, and user experiences. Whether you’re looking for high returns, long-term passive income, or simply a way to dip your toes into real estate, these platforms offer accessible solutions to grow your portfolio.

Quick Look: Best Fractional Real Estate Investment Platforms

• Best for $100 Minimum Investment: Arrived Homes
• Best for Accessibility and Transparency: mogul
• Best for Beginner Real Estate Investors: Fundrise
• Best for a Diverse Range of Alternative Assets: Yieldstreet
• Best for Newer Accredited Investors: Realty Mogul

Best Fractional Real Estate Investing Platforms

Let's take a deep dive into the different fractional real estate investment platforms to help you make the best investment for your goals.

1. Best for $100 Minimum Investment: Arrived Homes

• Minimum Investment: $100
• Average Annual Return: 18.60%

Arrived Homes allows virtually anyone to buy shares of income-producing rental properties in some of the fastest-growing markets throughout the United States. With a minimum investment of just $100, investors can easily diversify their portfolios across multiple properties and receive passive income each quarter through the rental income generated by each property.

The company takes care of all of the management headaches that go along with investing in real estate so investors can simply enjoy the best part; collecting passive income. After a target hold period of 5-7 years, Arrived Homes will choose the most opportune time to sell the property to realize the highest gains. Each investor will then receive their pro-rata share of the proceeds from the sale and their investment will be fully realized.

2. Best for Accessibility and Transparency: mogul

• Minimum Investment: $250
• Average Annual Return: 18.8%

mogul is an online fractional real estate investing platform that allows investors to start with as little as $250. Founded by Goldman Sachs alumni with over $10 billion in real estate transactions, mogul offers opportunities to invest in shares of single-family rental properties. Whether you're looking for short-term, medium-term, or long-term rental investments, mogul provides a wide range of options.

The platform boasts an impressive average internal rate of return (IRR) of 18.8%, along with monthly dividends, potential property appreciation, and tax advantages. What sets mogul apart is its fast sign-up process, enabling users to begin investing in under 30 seconds. Additionally, with both property and landlord insurance in place, investors benefit from added security and peace of mind.

3. Best for Beginner Real Estate Investors: Fundrise

• Minimum Investment: $10
• Average Annual Return: 10.79%

Fundrise is one of the most popular and well-respected real estate crowdfunding platforms, put together by a team of established real estate professionals who wanted to make building a real estate portfolio simple. The best part is the minimum investment is only $10.

You can roll some — or all — of your IRA into a fund that consists of a diverse portfolio of real estate assets chosen by the Fundrise brain trust. Plus, all of the assets in the fund were chosen for their unique combination of upside, the ability to resist market downturns and their projected ability to generate long-term investor profits. This is the best way to bring dividends back to you—the investor.

4. Best for a Diverse Range of Alternative Investments: Yieldstreet

• Minimum Investment: $10,000
• Average Annual Return: 9.6%

Yieldstreet offers an all-in-one alternative investment platform with offerings for accredited as well as non-accredited investors. It has new investment opportunities available regularly, ranging from commercial real estate, art equity funds, structured notes, portfolios of consumer debt and many others.

Even if you're not quite ready to jump into one of Yieldstreet's offerings, it's worth signing up for the platform to gain access to the many webinars and educational content available to learn the ins and outs of various types of alternative investments.

5. Best for Newer Accredited Investors: RealtyMogul

• Minimum Investment: Accredited investors, individual deal: $25,000 Non-accredited investors, REIT: $5,0003
• Average Annual Return: 12%

There’s a reason that many of the best dividend stocks are real estate investment trusts (REITs). Real estate generates revenue through all market conditions in the form of rental income. Since REITs are required to pay out at least 90% of their taxable income to investors through dividends, they often have attractive yields.

The downside to most REITs, however, is that they’re publicly traded. This means that they’re vulnerable to the same market volatility as any other stock. The RealtyMogul Income REIT is a non-traded REIT, which means that it has the benefits of being a resilient asset class and offers high yields, but without being valued based on the mood of the market on any particular day.

This REIT offers a 6% dividend yield and has experienced consistent growth in its share value since inception. Since it’s not traded on a major stock exchange, shares are purchased directly through the RealtyMogul platform with a $5,000 minimum investment.

Advantages of Fractional Real Estate Ownership

• No large down payment or excellent credit score required
• Potential passive rental income without the responsibilities of being a landlord
• Everyday issues are handled by a property management company
• Diversification from small houses to large apartment buildings
• You aren’t fighting with venture capital money when you invest
• These properties more easily generate cash flow internally and externally
• You don’t need hard money loans to buy into real estate at this level

Disadvantages of Fractional Real Estate Ownership

• Long-term commitment of 5 to 10 years
• Private asset managers control these funds
• Risk of market fluctuations and economic downturns
• Fees involved especially with early redemption
• Interest rates still impact how these portfolios are managed
• You have no control over the property manager at each location

Fractional Real Estate is Different from Owning a REIT

Some may be tempted to compare fractional real estate ownership to investing in REITs through a brokerage account. There’s a management fee tied to both, but these investment types differ considerably. There are big differences between the two:

• Investors in fractional real estate ownership actually own their property and can transfer ownership without restriction. When you purchase REITs, you buy shares in companies that own real estate. With a REIT, you don’t own real estate directly.
• Investors in fractional real estate have personal control over the properties they purchase. With a REIT, the management company decides what properties to invest in.
• A fractional crowdfunding company can diversify its portfolio as much as it likes, while a REIT, while flexible, must be careful which properties it purchases and manages because of how much it has to return revenue to investors.
• Crowdfunding platforms have more flexibility in how they can offer investment products compared to REITs.

So What’s the Best Investment - Fractional Ownership or Investing in REITs?

What is the best investment between the two? It depends on your personal situation. If you want to own a piece of real estate and you can maintain the investment for several years, then fractional ownership may be for you. If you want regular monthly or quarterly income with the liquidity to get out of the investment at a moment’s notice, then you may want to consider a REIT.

A real estate fund offers you real access so you don’t need to do the house hacking, check the list price of every house in the area, pay all the overhead involved with property ownership or chase down tenants for rent payments.

The choice is yours!

Frequently Asked Questions