Fundrise is one of the first companies to successfully bring crowdfunded investment into the real estate market.
Founded in 2012 and headquartered in Washington, DC, Fundrise is now one of the leading crowdfunding real estate investment platforms.
You can open a Starter portfolio with just $10. This is significantly less than traditional private real estate investments, which often require tens of thousands of dollars.
Money is pooled together from thousands of investors within these portfolios. Currently, every portfolio offered by Fundrise pays out dividends.
When you invest with Fundrise, you will begin earning dividends or distributions. These are paid out on a quarterly basis.
So, what exactly happens with these dividends earned on Fundrise?
Fundrise invests your money in real estate equity and debt investments.
Interest payments and rents are collected, and these profits are passed out among the shareholders in the form of of quarterly dividends.
You have two choices for what to do with dividends when Fundrise releases the money to you:
Fundrise has an automatic dividend reinvestment tool you can activate or turn off at any time.
You can enable dividend reinvestment from the settings section of your account.
If dividend reinvestment is enabled, Fundrise will reinvest any dividends you have earned four times a year according to your investment plan.
If dividend reinvestment is disabled, any potential dividends will be paid out to your primary bank account on file.
You need to make any changes to your dividend reinvestment settings before the end of the quarter for it to take effect.
Whether or not you use the dividend reinvestment feature depends on where you are at in life.
If you are using Fundrise as a means to supplement your income, you probably need that money to live off of. In that case, you may have the dividends paid out to your bank account automatically.
If you are young and looking to grow your wealth, you don't need that money right now. You should probably reinvest it to earn compound interest.