The housing market is white hot. If you want to cash in on it, Fundrise has a new offer for you.
The company has been helping people invest in commercial real estate for nearly a decade. But now, Fundrise is moving into a new area: single-family rental homes.
So, for as little as $500, you can invest in this type of real estate — without having to buy property directly or deal with the hassles of being a landlord, CNBC reports.
Goldman Sachs recently provided a $300 million credit facility to Fundrise, allowing the latter to buy up homes from builders as well as land to develop.
Fundrise manages the rental homes, and individuals invest in Fundrise’s portfolio of property by buying a fund from the company.
Fundrise manages an interval fund that lets individuals invest small sums without the need to use a broker. However, investors are restricted to withdrawing their money from the fund at set intervals, The Wall Street Journal reports.
CNBC reports that Fundrise charges investors a 1% annual fee.
In a post published in the Education section of Fundrise's website in July, the company stated its belief that rental real estate has a bright future:
“[W]e believe that a variety of trends — such as millennials starting families, as well as changing social norms around work and school — has led to an increasing share of the population in need of more living space. We expect a portion of these individuals will look to rent for some time, which we believe may contribute to a growing demand for rental homes in the coming years.”
However, it is important to remember that past performance is no guarantee of future riches.
The housing market has been hot for years. Many experts believe that will continue for several years to come. But others are not so sure.
When any type of market soars for a long period, it generally returns to earth — sometimes violently — at some point in the future.
In May, Nobel Prize-winning economist Robert Shiller — who famously predicted the bursting of the housing bubble that preceded the Great Recession — told Yahoo Finance Live that he thought housing prices would eventually take a dip, possibly a year or two down the road. He said:
“They’ll come back down, not overnight, but enough to cause some pain.”