How Real Estate Returns Work on Rise

One of our most popular asset classes on Rise is Real Estate. Rise aggregates investments from our clients which we use to purchase rental properties across the United States to generate returns for our clients through rental income and price appreciation when properties get sold.

There are multiple reasons why our real estate plan is very popular. The first is that the investments are much safer than stocks while generating a stable return. Because homes are tangible, and demand for them is pretty constant, your capital is safe and returns are more consistent than what is typically available with stocks. Also, given how much the US housing market is booming right now and the fact that most investors have forecasted real estate to be the best asset class for the next decade, our Real Estate portfolio is the absolute best place to be (depending on your goals). For those investing from Nigeria or other emerging markets, the relative liquidity, easy title process, growing US economy and more make this a better place to invest than local properties or similar options. 

Our all-time returns on real estate (82.8% in Naira terms) prove this out. However, we often get asked about how the returns on our real estate plans work so we’ve written a breakdown for you to understand what to expect and how Rise helps you earn dollar returns through real estate.

Returns come in monthly 

Unlike our Stocks plan and Fixed Income plans where returns come in daily, our real estate plan posts returns monthly. So first-time Real Estate investors don’t get returns until the first full month. It also does not post on the exact first day of the month, since we have to aggregate and collect rent for those first few days. Typically, returns come in on the 3rd to 6th day of the month. If you invest within the month, your returns will come in at the beginning of the next month and if your plan matures (and it isn’t set to reinvest) before the returns come in, then your returns will be sent to your wallet.

Returns Vary Month to Month 

The returns on our real estate plan are not the same amount each month. Some months they tend to be higher, and some months they are lower. Why? Because we are always adding new properties to the portfolio and now and then we sell off some properties due to market conditions, or as part of our rebalancing strategy. This means that sometimes capital gains are earned on the properties sold which boosts returns for that month. Other times we may have bought properties but they are still being renovated and getting ready for rental so they do not generate returns yet instead they cost us money leading to less income and higher expenses, which lowers returns for that month. Other times like the beginning of summer, fall or towards the end of the year, we see a lot of moving out and not as many new people moving, which might impact our vacancy and thus return. Therefore, we advise investors in the Real Estate plan to stay invested for at least a year because we cannot always predict which periods or months end up having the best returns within the year.

Properties are Fully Insured

All the properties in our portfolio are fully insured immediately on purchase. This makes sure that our invested capital remains safe and that whatever damages, accidents, weather or crime that affects our properties are covered. This makes real estate highly safe and rewarding for our users.

Users can own properties outright

Right now, you only need $10 to get started with any investment on Rise including real estate. This makes it affordable and accessible to almost anyone, as you do not need a lot of money upfront to start growing your portfolio of US properties. 

However, if you want to own a US property outright and can afford it, Rise will purchase, maintain and manage the property and remit returns to you directly as the owner. All titles and documents will be in your name with Rise acting as a paid manager. The minimum investment for this option starts at $50,000 and it’s one of the best ways to own properties abroad and collect rent and appreciation seamlessly. If this interests you, please send an email to investments@rise.capital.

Conclusion

Given the benefits of safety, stable returns and the expected growth over time, real estate has proven to be a favourite for people who want to balance risk and performance. If stocks are for risky growth and fixed income is for safety and guaranteed returns, real estate is the perfect fit for those who want stability, consistent returns and long term outperformance. 

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