Real estate can generate rental income and long-term appreciation, but returns vary materially by property type, market, financing, costs, and investment structure. Traditional property ownership also demands significant capital, time, and hands-on management. For investors seeking exposure to real estate without becoming landlords, today's market offers several options that are hands-off from day-to-day property management. Whether you prefer fractional real estate investing through property-specific LLC ownership or the exchange-traded liquidity of REIT ETFs, this guide examines seven investment vehicles that provide real estate exposure without the headaches of property management, tenant calls, or maintenance responsibilities.
Disclaimer: The information provided in this guide is for educational purposes only and does not constitute financial, tax, or legal advice. Always consult with a licensed professional before making any financial or investment decisions.
Key Takeaways
Fractional platforms offer property-level ownership with institutional-grade underwriting: mogul, a fractional real estate platform club founded by former Goldman Sachs executives, provides fractional membership interests in property-specific, state-registered LLCs, an 18.8% average annual IRR as of April 2025, monthly distributions once a property is operational, and $10,000 loss protection for new members
REIT ETFs provide exchange-traded liquidity and immediate diversification: liquidity, bid-ask spreads, and premiums or discounts can still vary with market conditions. USRT and RWR posted trailing one-year returns above 21% as of August 3, 2026, with expense ratios as low as 0.07%
Fee structures vary significantly across investment types: among the five REIT ETFs compared in this guide, expense ratios range from 0.07% (SCHH) to 0.25% (RWR), although the broader real estate ETF universe runs higher, with iShares' IYR at 0.38%. Fractional platforms use different fee models entirely
Income frequency differs by platform: mogul generally distributes monthly once properties are operational, Fundrise targets quarterly distributions that are not guaranteed, and REIT ETFs pay dividends on varying schedules
Tax treatment varies: fractional ownership generates K-1 forms that may pass through depreciation, while REIT ETF distributions in taxable accounts are generally reported on Form 1099-DIV, whose tax characterization can include ordinary dividends, qualified dividends, capital-gain distributions, and nondividend distributions
1. mogul
mogul is a fractional real estate platform club founded by former Goldman Sachs executives, with a company-reported $10 billion-plus in collective investing experience as of June 1, 2026. The platform provides access to professionally vetted and managed single-family rental properties operating across mid-term and short-term strategies, enabling investors to build diversified property portfolios through fractional ownership of income-producing residential real estate, all without tenant management or day-to-day operational responsibilities. More than $90 million in assets have been invested through the platform, and the community now includes over 40,000 investors.
How Does mogul Work?
mogul acquires properties, places each into a state-registered LLC, and offers fractional membership interests in those LLCs to investors. Key highlights:
Property-level ownership: Investors purchase fractional membership interests in property-specific LLCs, each of which owns an identifiable property, rather than units in a pooled fund. Investors receive property-level economic and governance rights, with title to each home held at the LLC level
Monthly distributions: Once a property is operational and generating distributable cash flow, mogul generally distributes each investor's proportional share of net rental income monthly, creating up to twelve potential distribution events per year. Distribution amounts are property-dependent and are not guaranteed
Professional management with investor governance: Licensed property managers handle routine tenant, maintenance, and operational matters, while decisions above $1,000 are generally submitted to an investor vote under super-majority rules in the applicable operating agreement
Secondary market: A planned trading feature is designed to let members sell shares, with pricing based on monthly fair-market-value calculations drawn from third-party appraisal-level data
Member rewards: Community features such as mogul Clubs distribute up to 2% in rewards to members, and the Give $50, Get $50 program pays members $50 when a friend they refer invests
Performance and Returns
mogul's institutional approach has delivered strong reported results:
18.8% average annual return as of April 2025, compared with the S\&P 500's 9%
Record monthly yield of 2.6%, as reported on mogul's About page as of June 1, 2026
mogul publicly targets approximately 15-20% annual IRR on current offerings and applies a 12% minimum projected IRR hurdle in its underwriting. Projected performance is not guaranteed
Unique Investor Protections
$10,000 loss protection: If the total return on your first 7 days of investments is a loss in the first year, mogul covers up to $10,000 in losses with its own balance sheet capital
Rigorous selection: mogul reports that fewer than 1% of properties it reviews pass its diligence process
Aligned interests: mogul reports that it co-invests in every property offered on the platform
Tax Benefits
mogul's property-level LLC structure may pass depreciation and other tax items through to investors on Schedule K-1. Those deductions may reduce taxable rental income or other qualifying income, and their current usability depends on rental-loss limitation rules, basis, income, participation level, and each investor's individual tax circumstances. mogul's own educational content notes that rental losses generally offset income from other rental activities rather than wages or business income, subject to exceptions such as the special allowance. Compared with some REIT investments, this K-1 structure may provide depreciation-related tax advantages depending on the offering and the investor's situation.
Best For: Investors seeking relatively high target returns, property-specific ownership exposure, monthly income potential, and institutional-style underwriting backed by loss protection.
2. Fundrise
Fundrise is a real estate investment platform that offers access to diversified real estate portfolios through funds such as its Flagship Real Estate Fund, Income Real Estate Fund, and eREIT offerings. Its former eFund has been merged into the Growth eREIT, and no investors currently hold eFund shares. As of March 31, 2026, Fundrise parent Rise Companies reported more than 402,000 active investor accounts and $3.4 billion in assets under management.
How Does Fundrise Work?
Fundrise pools investor capital into diversified real estate portfolios rather than individual properties:
Pooled fund approach: Investments spread across build-for-rent, multifamily, and industrial properties, as well as real-estate-backed private credit
Account minimums: Taxable accounts carry a low initial minimum, while IRAs carry a higher initial minimum
Quarterly distribution target: Fundrise states that its goal is to issue distributions after each quarter and that dividends are not guaranteed
Non-accredited investors: Fundrise offers investments to non-accredited investors, although availability varies by fund and certain Regulation D offerings require accredited-investor status. Eligibility is generally limited to U.S. permanent residents over 18 with a valid U.S. tax ID who file U.S. taxes
Performance and Returns
Fundrise has published returns across multiple periods:
Flagship Real Estate Fund: 7.50% total return in calendar 2024 (historical)
Income Real Estate Fund: 8.30% return in calendar 2024 (historical)
For the 12 months ended June 30, 2026, Fundrise reported 6.39% for the Flagship Fund and 9.11% for the Income Fund, with first-half 2026 returns of approximately 6.18% and 4.90%
Fundrise's real estate funds generally carry a 0.15% advisory fee plus a 0.85% annual management fee
Investment Options
Fundrise offers multiple real estate fund strategies:
Flagship Real Estate Fund: Balanced approach across property types
Income Real Estate Fund: Focuses primarily on real-estate-backed private credit and fixed-income strategies designed to generate current income
Best For: Investors seeking diversified exposure across multiple property types and geographic markets through a pooled fund structure.
A Note on the ETF Data Below
Fund sponsors publish several different income measures, including 30-day SEC yield, 12-month trailing yield, distribution yield, and dividend yield, and these are not interchangeable. Total-return figures also change daily. Every figure below is labeled with the sponsor's own metric and as-of date, and yields are comparable only when the same measure and the same date are used.
3. Schwab U.S. REIT ETF (SCHH)
The Schwab U.S. REIT ETF has the lowest expense ratio among the five REIT ETFs compared in this guide and provides broad exposure to publicly traded real estate securities.
Key Features
Expense ratio: 0.07%, the lowest of the five ETFs in this guide
One-year performance: 16.19% trailing one-year return as of August 3, 2026, which is historical performance and not an expected future return
Holdings: 121 holdings
Income: 2.79% trailing 12-month distribution yield as of June 30, 2026, and a 3.16% 30-day SEC yield as of July 24, 2026
Inception: January 13, 2011
Why Choose SCHH?
SCHH tracks the Dow Jones Equity All REIT Capped Index, providing exposure to companies engaged in the ownership and operation of commercial real estate. That index composition delivers a broad set of U.S. REITs in a single exchange-traded position.
Best For: Cost-conscious investors prioritizing the lowest fees in this comparison for long-term buy-and-hold exposure to listed real estate.
4. iShares Core U.S. REIT ETF (USRT)
The iShares Core U.S. REIT ETF posted the highest trailing one-year return in NerdWallet's screened REIT ETF table as of August 3, 2026.
Key Features
Expense ratio: 0.08%
One-year performance: 21.67% as of August 3, 2026, historical performance rather than an expected return
Holdings: 124 holdings as of July 29, 2026
Income: 2.57% 12-month trailing yield as of June 30, 2026, and a 2.91% 30-day SEC yield
Net assets: $4.745 billion as of July 29, 2026
Inception: May 1, 2007
Why Choose USRT?
USRT tracks the FTSE Nareit Equity REITS 40 Act Capped Index. As of August 3, 2026, it ranked first by trailing one-year return in NerdWallet's screened REIT ETF table, though a single trailing period does not establish performance across market cycles.
Best For: Investors focused on exchange-traded REIT exposure with a low stated expense ratio.
5. Vanguard Real Estate ETF (VNQ)
The Vanguard Real Estate ETF is the largest REIT ETF by assets among the five compared in this guide, and it reports a 3.37% dividend yield as of June 30, 2026.
Key Features
Expense ratio: 0.13%, effective May 28, 2026
Net assets: $38.2 billion for the VNQ ETF share class and $71.4 billion for the total Real Estate Index Fund, both as of June 30, 2026
Holdings: 145 stocks, including real estate operating and service companies in addition to REITs
Income: 3.37% dividend yield as of June 30, 2026, using Vanguard's own dividend-yield measure
Inception: September 23, 2004
Why Choose VNQ?
VNQ holds the largest asset base of the funds in this guide and reports its income using Vanguard's own dividend-yield measure. Because sponsors use different metrics and as-of dates, yields are not directly comparable across funds without normalizing the measure.
Best For: Income-focused investors seeking large fund scale and broad exposure across 145 holdings.
6. Fidelity MSCI Real Estate Index ETF (FREL)
The Fidelity MSCI Real Estate Index ETF offers broadly similar U.S. real estate equity exposure to VNQ at a lower stated expense ratio.
Key Features
Expense ratio: 0.084%
Net assets: approximately $1.5 billion as of June 30, 2026
Holdings: 128 basket holdings as of June 30, 2026, tracking the MSCI USA IMI Real Estate 25/50 Index
Performance: 11.05% year to date and 12.25% for one year, both through June 30, 2026
Relationship to VNQ: FREL and VNQ offer broadly similar U.S. real estate equity exposure, but they track different indexes and their returns are not identical, with FREL at 12.25% versus VNQ at 12.48% for the one year ended June 30, 2026
Why Choose FREL?
FREL provides broadly similar diversified U.S. real estate equity exposure to VNQ at a lower stated expense ratio (0.084% versus 0.13%), though the funds use different benchmarks and portfolios.
Best For: Investors seeking VNQ-like exposure at a lower stated expense ratio.
7. SPDR Dow Jones REIT ETF (RWR)
The SPDR Dow Jones REIT ETF has more than 25 years of operating history, making it one of the longest-running U.S. REIT ETFs, spanning multiple market cycles.
Key Features
Expense ratio: 0.25%
One-year performance: 21.57% as of August 3, 2026, second in NerdWallet's screened REIT ETF table on that date and historical rather than expected
Holdings: 97 holdings, tracking the Dow Jones U.S. Select REIT Capped Index
Income: 3.24% fund distribution yield and 3.21% 30-day SEC yield as of July 23, 2026
AUM: approximately $1.96 billion as of July 27, 2026
Inception: April 23, 2001. Note that it is not the oldest U.S. real estate ETF: iShares' IYR launched June 12, 2000
Morningstar ratings: 3 stars overall, 4 stars for three years, 4 stars for five years, and 2 stars for ten years, as of June 30, 2026
Why Choose RWR?
RWR's 25-plus year operating history spans multiple market environments, and its trailing one-year return ranked second in NerdWallet's August 3, 2026 screen. Longevity documents experience across cycles rather than guaranteeing future resilience.
Best For: Investors valuing a long operating history alongside recent performance.
Why mogul Stands Out for Hands-Off Real Estate Investing
Investor behavior reinforces the platform's appeal: mogul reports that 90% of its investors invest a second time, and when they do, it is typically 3x their first investment.
High Target Returns with Institutional-Grade Underwriting
mogul reports an 18.8% average annual return as of April 2025, compared with the S\&P 500's 9%, and publicly targets approximately 15-20% annual IRR on current offerings, a higher target-return profile than pooled funds, traditional investment avenues, and REIT ETFs typically pursue. mogul attributes its investment approach to the founding team's Goldman Sachs real estate experience and a highly selective underwriting process in which the company says fewer than 1% of reviewed properties pass diligence. Projected and target returns are not guaranteed.
Property-Level Ownership Structure
Unlike REITs or pooled funds, mogul provides fractional membership interests in state-registered, property-specific LLCs, each of which owns an identifiable property. Investors select specific properties and receive economic and governance rights proportional to their ownership stake, with title held at the LLC level. This transparency lets you know exactly which asset your capital is working in.
Monthly Income vs. Quarterly Distributions
While pooled funds and REIT ETFs distribute on quarterly or varying schedules, mogul generally pays monthly rental income distributions once a property is operational, creating up to twelve potential distribution events per year. More frequent distributions can create more frequent reinvestment opportunities, with compounding potential shaped by distribution amounts, reinvestment timing, available opportunities, and subsequent performance. That cadence reflects how mogul's model pairs cash flow with appreciation from income-producing residential property.
Unique Loss Protection
mogul offers $10,000 loss protection for new members. If the total return on your first 7 days of investments is a loss in the first year, mogul pays that amount back with its own balance sheet capital, up to $10,000, a safety net that is uncommon among real estate investment options.
Potential Tax Advantages
Fractional ownership through mogul may pass depreciation and other tax items through to investors on Schedule K-1. Those deductions may reduce taxable rental income or other qualifying income, subject to rental-loss limitation rules, basis, participation level, and individual circumstances. REIT distributions are generally subject to ordinary-income treatment, although portions can carry other tax character, including capital gains or return of capital. mogul's educational library covers the broader tax benefits of real estate in more detail.
Aligned Incentives
mogul reports that it co-invests in every property on the platform, aligning management's interests with investor returns. Combined with free investment property calculators and a rental property calculator that can analyze any U.S. address, mogul provides both the tools and transparency serious investors need.
For those evaluating why real estate as an asset class and prioritizing property-level exposure, professionally vetted and managed properties, monthly dividends, real-time appreciation, and tax benefits, mogul presents a differentiated option that makes real estate investing more accessible and headache-free. Suitability still depends on each investor's objectives, financial circumstances, and risk tolerance.
Disclaimer: The information provided in this guide is for educational purposes only and does not constitute financial, tax, or legal advice. Always consult with a licensed professional before making any financial or investment decisions.
Frequently Asked Questions
What is the difference between fractional real estate and REITs?
Fractional real estate provides ownership of membership interests in property-specific LLCs, giving investors governance rights, property selection, and potential pass-through tax items such as depreciation. Publicly traded equity REITs are exchange-listed companies that generally own or operate real estate, and REIT structures also include mortgage and hybrid REITs, as well as nontraded and private REITs. mogul currently targets relatively high property-level returns and offers potential K-1 depreciation benefits, while publicly traded REITs trade on exchanges and hold broad baskets of listed real estate companies. The right structure depends on capital, time horizon, tax situation, and investor preferences, and mogul's guide to choosing an investment platform walks through the considerations.
How do real estate ETFs like VNQ and SCHH generate returns?
REIT ETFs generate returns through two mechanisms: distribution income passed through from the underlying REITs and changes in the market value of their holdings. REITs generally must satisfy a distribution test tied to at least 90% of REIT taxable income, subject to statutory adjustments, in order to maintain REIT qualification. VNQ reported a 3.37% dividend yield as of June 30, 2026, while SCHH delivered a 16.19% trailing one-year total return as of August 3, 2026, including both distributions and price appreciation.
What returns can I expect from these investments?
Returns vary by investment type, and all figures below are historical or targeted rather than expected. mogul reports an 18.8% average annual return as of April 2025, compared with the S\&P 500's 9%. Fundrise reported 7.50% for its Flagship Fund and 8.30% for its Income Fund in calendar 2024, and 6.39% and 9.11% respectively for the 12 months ended June 30, 2026. Among REIT ETFs, USRT had a 21.67% trailing one-year return as of August 3, 2026. Past performance does not guarantee future results, and single-family rental yields shift over time: ATTOM reports projected gross rental yields declining year over year in 54.8% of counties with comparable data, which underscores how much market selection and underwriting discipline matter.
Do I need to be an accredited investor for these options?
Generally, no. mogul accepts non-accredited investors, so investors do not need to meet accredited-investor income or net-worth thresholds, although normal eligibility and compliance requirements still apply. Fundrise likewise offers investments to non-accredited investors, although availability varies by fund and certain Regulation D offerings require accredited-investor status. REIT ETFs are accessible to everyday investors through eligible brokerage accounts.
How does mogul's $10,000 loss protection work?
If your total return on investments made within your first 7 days is a loss after one year, mogul covers up to $10,000 with its own balance sheet capital. For example, if you invest $20,000 across five properties in your first week for $100,000 in total and that portfolio is worth $90,000 after year one, mogul would true you up to your original $100,000.
Can international investors use these platforms?
mogul permits eligible non-U.S. residents to invest, except residents of countries under U.S. embargo, and access remains subject to KYC, sanctions, jurisdictional, legal, and tax requirements. Fundrise generally limits eligibility to U.S. permanent residents, and international investors and residents of U.S. territories generally cannot invest through that platform. U.S.-listed REIT ETFs may be available to international investors through eligible brokers, but access varies by country, local regulation, and brokerage policy, and residents of the European Economic Area and United Kingdom may be unable to make new purchases of U.S.-registered ETFs through some international platforms. Eligible investors can still build diversified real estate portfolios without owning property directly.