Fundrise is a great way to diversify your portfolio and easily gain access to the real estate sector. H1B visa holders sometimes face difficulties when investing in alternative vehicles. I did some research on whether Fundrise would accept investments from H1B visa holders:
Fundrise is only open to U.S. citizens who are at least 18 years old. H1B visa holders, thus, cannot invest in Fundrise. However, there are many other investment opportunities open to H1B visa holders in the United States.
In this article, I’ll highlight all the possible ways that an H1B person might invest in real estate even though an investment in Fundrise is currently not possible. We’ll look at what you can invest in as an H1B and also what your alternatives to Fundrise are.
Can I invest while on H1B?
In general, investing while on an H1B visa is not a problem in the U.S. The stock market and many private investment offerings are open to H1B holders who are not U.S. citizens. However, some companies may prefer to only do business with U.S. passport holders as the tax implications may be preferential.
Many H1B holders have successfully opened brokerage accounts with Vanguard, Schwab, or Fidelity and invested in the stock and bond market. Also, publicly-traded REITs should be included in this investment opportunity.
The only requirement most of these brokerages have is that the H1B holder currently resides in the United States, i.e. has a residential mailing address somewhere on U.S. mainland. Note that U.S. territories are frequently excluded from this list.
Can H1B invest in REITs?
While investing in REITs as an H1B holder should not pose a problem per se it is necessary to distinguish between public and private REIT offerings:
- Public REITs: public REITs are traded on the common stock exchanges and are as the name suggests open to the general public. This means that you as an H1B holder have the access to the trusts as to any other common stock.
- Private REITs: private REITs on the other hand are not traded publicly and thus depend on the issuer of the trust for allowing investments. Fundrise is an example of such a private REIT and thus can formulate its own investment rules and requirements.
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Who can invest in Fundrise?
In general, Fundrise accepts investments from any United States citizen who has completed the 18th year of his life and currently resides in the continental U.S. Although these are the official requirements that Fundrise postulates they might also – as a private REIT issuer – reserve the right to refuse an investment form an individual for any other reason.
Contrary to some information out there you also do not need to be an accredited investor to invest in Fundrise. Thus, any U.S. citizen on U.S. mainland can invest in Fundrise no matter their net worth or employment status.
NOTE: The easiest way to add diversification to your portfolio is to invest in real estate through Fundrise. You can become private real estate investor without the burden of property management! Check it out here (link to Fundrise).
Why H1B cannot invest in Fundrise
Although Fundrise has not given any explicit reason as to why H1B visa holders cannot invest with the it is likely due to regulatory concerns. Allowing only U.S. citizens to invest in their product greatly reduces Fundrise’s administrative concerns and costs.
Another reason could be the limited liability Fundrise faces with only U.S.-based investors. International investment exposure also would make Fundrise accountable to international and supra-national investment and securities laws and therefore greatly complicate their regulatory setup.
FYI: Another great way to get exposure to the real estate sector is by investing in real estate debt. Groundfloor offers fantastic short-term, high-yield bonds that can add diversification to your portfolio!
How to invest in Real Estate as an H1B
Fortunately, although H1B cannot invest in Fundrise as such, there are many other real estate opportunities are open to H1B holders as an alternative to Fundrise. I will go through a few options here you have here:
- Publicly traded REITs: As mentioned earlier publicly-traded REITs are available on most stock exchanges and can be openly traded by anyone once you have a brokerage account.
- Private REITs that allow international investors: While most U.S.-based private REITs are closed to international investors (H1B holders count as international) there are some private offerings that are open to H1B holders such as Holdfolio and RealT.
- Rental properties: If none of the above options suit your needs then the closest you might come to investing in Fundrise is to build your own portfolio of income-producing properties. This approach may be the most difficult but will also yield commonly the greatest return.
And there you have it! While Fundrise is currently not open to H1B holders and international investors, there are still a lot of other ways to invest in the real estate industry as an H1B holder.
Good luck on your investment journey!
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