Investing in real estate can be rewarding, but choosing the right investment is a challenge. With respect to real estate investment trusts (REITs), choosing between the potential higher returns and upside appreciation offered by equity REITs and the stable, but comparatively lower, returns offered by debt REITs has always been a difficult choice for investors. But investors who insist on the best of both worlds can opt for Fundrise’s Balanced eREIT II.
Novice Real Estate Investors
This hybrid REIT combines a mix of real estate assets (most of which are in the core-plus sector) chosen to deliver strong returns with a strong set of real estate securities backed by commercial properties. The end result is a REIT that offers investors an ideal combination of passive income and the potential for asset appreciation. The Balanced eREIT II has a minimum of $5,000 and is open to investors in the main Fundrise category.
The Balanced eREIT II has already generated impressive returns for investors, which is impressive considering it’s just over a year old. The eREIT II was created in January 2021, when it opened with a net asset value (NAV) of $10. It closed the year at $12 per share, a 20% gain.
So far in 2022, the eREIT has continued to perform solidly and the current net asset value is $12.46. Overall, this means that the Balanced eREIT II’s net asset value has increased by 25% in less than two years. It’s hard to argue with that kind of performance.
The quality of a REIT’s assets is always paramount, as is the degree of asset diversification from a geographic and industry perspective. Any REIT that concentrates its assets in a limited set of markets exposes investors to high risk of market fluctuations and declines. Balanced eREIT II’s real estate assets consist of multi-family properties in growing markets nationwide.
The vast majority of the 12 assets in the Balanced eREIT II are considered core plus, but there are also a few assets in the fixed income and opportunistic categories. Fundrise is betting that by spreading assets across some of the most dynamic and fastest growing real estate markets in the country, it will be able to give investors the upside they want as well as the passive income they need.
A brief overview of Balanced eREIT II assets includes:
- New Apartment Development in Vero Beach, Florida: Fixed Income
- Stabilized apartments in North Las Vegas, Nevada: core plus
- Single Family Rental Development in Locust Grove, GA: Opportunistic
- Stabilized apartments in Georgetown, Texas: core plus
- Stabilized apartments in The Woodlands, Texas: core plus
Below are the current Balanced eREIT II stats:
- Launch: January 2021
- Phase: Ramp-up
- Goal: Balanced
- Geographic orientation: National
- Current net asset value per share: $12.46
- Current dividend yield: 1.20%
- Tax declaration: 1099-Div
Fundrise Balanced eREIT II’s early returns are impressive. The balanced approach and mix of assets of this hybrid REIT has so far provided investors with exactly what they were looking for when they signed up. Considering the fact that many of the REIT’s assets are already stabilized and strategically located in high growth markets, there is no reason to believe that it will not continue to deliver strong returns to investors.
If you were looking for a REIT that took a balanced approach to investing, this one deserves some serious consideration. Of course, you should always remember that past performance is no guarantee of future results and the risk of loss always exists with any investment. However, the fundamentals of the Balanced eREIT II appear solid. Considering that’s only getting stronger, now might be the time to get on board.