Roofstock offers non-accredited investors the opportunity to invest in single family rental properties. However, it requires a significant upfront investment to get started, and property is a highly volatile investment.

START INVESTING WITH ROOFSTOCK

Single-family rental homes can be an attractive investment. But they come with a lot of fees, from mortgage to maintenance, not to mention ownership.

The cost of buying multiple properties is driving many out of the market. For the average investor, real estate is an attractive diversification option that they cannot afford.

Roofstock is trying to change that. This online real estate investment platform gives the average investor access to single family rental properties without commissions or outrageous transaction fees. Their goal is to minimize the time and effort associated with tracking down high-quality investment properties.

So is Roofstock safe? Should you invest in Roofstock properties? What is Roofstock One? We break down what the company has to offer and answer all your questions in this comprehensive Roofstock review.

Roofstock Features

Minimum Investment $0
Account Fees  
Time Commitment 0 Months
Accreditation Required
NO
Private REIT
NO
Offering Types DebtEquityPreferred EquityDirect Ownership
Property Types CommericalResidentialSingle FamilyForeign Investors
Regions Served More than 70 Markets
Secondary Market
YES
Self-Directed IRA
YES
1031 Exchange
YES
Pre-vetted
YES
Pre-funded NO

What is Roofstock?

RoofstockRoofstock was launched in 2015. The platform aims to make real estate investing a more affordable and accessible opportunity for ordinary investors.

The founders saw the real estate buying and selling process as inefficient and used their combined expertise in technology solutions to develop Roofstock. The platform combines AI with the input of its experienced team to select the best opportunities for investors looking for rental properties.

Today, the platform has processed more than $4 billion in transactions across 70 US markets.

Pay just a $99 fee to buy your first investment property with Roofstock

How Does Roofstock Work?

Getting started with Roofstock is easy. There are no registration fees. Simply enter your details on the registration page, including email address and phone number, no bank details required.

Once registered, you can start browsing the list of available properties or put your rental property on the market. There is also the option of working with Roofstock as a broker or agent. You can also list existing properties on the platform.

And you have the option to manage your property with Roofstock. The platform connects you with verified property managers. This is a key part of the platform's aim to make property management easier for a wider range of real estate investors; you don't have to be a business owner to take control of your investment.

Roofstock Features

Here are some features that Roofstock says set it apart from traditional real estate agents and real estate crowdfunding platforms.

Invest in Single-Family Rental Properties

Roofstock focuses on helping users buy single-family rental properties and does so by making their prices much cheaper than a typical real estate agent. You can explore a range of properties on the Roofstock market to find potential investment opportunities.

Transaction costs are the biggest barrier to entry for many investors when it comes to investing in real estate. Rental properties in particular can be intimidating because the down payment is so high.

While Roofstock can't (and shouldn't) reduce your down payment too much, their transaction fees for single family rentals are low compared to regular realtors.

Pre-Vetted Properties

Roofstock thoroughly vets all of its properties before listing them on its online marketplace. This is one of the main selling points of the platform, helping you with due diligence and helping you find properties that fit your investment goals and budget.

Here's what Roofstock provides for your listings:

  •    A walk-through from an independent property inspector and a full inspection report.
  •     An accurate estimate of short-term and long-term repair costs.
  •     A title report produced by a professional title company to ensure listed properties are fit to be sold.
  •     A valuation of the property and the local market. This lets Roofstock compare properties to more viable or profitable alternatives nearby.
  •     A full review of the lease terms including monthly rent, annual gross rent, etc.
  •     A full review of the tenant selection process.
  •     A floor plan, a virtual property tour, and interior and exterior photos.

There is also a wealth of information about the property's finances, such as how net cash flow should develop over the next five to ten years. Overall, Roofstock provides lots of helpful documentation and information, and you can also schedule a real estate consultation call with their team if you have any questions.

Plus, with its new “buy with an agent” option, you can work with a certified Roofstock agent to find real estate opportunities that fit your goals, risk tolerance and capital.

Rental Property Management

Roofstock enables users to have their properties serviced by experienced property managers. The platform vets its managers as rigorously as it vets its rental properties. If you are looking for a passive real estate investment, this property is for you.

Property management is an option rather than a required feature. You can personally manage your Roofstock properties, make sure the property meets your standards and get to know your tenants.

Low Minimum Investment

Roofstock has a minimum investment of $5,000, although there are no fees to open your account. This is a higher fee than some real estate crowdfunding platforms. However, it is very low for the single home investment world.

Roofstock Academy

Educating customers is a hallmark of good business, and the team at Roofstock didn't disappoint here. Its Roofstock Academy program helps teach investors the skills needed to invest in real estate, whether they invest through Roofstock or on their own.

There is no free option to learn at the academy, although you can check out free articles via the Roofstock Knowledge Center.

The self-study plan costs $399 per year, giving you access to over 50 hours of on-demand lectures. Upgrading to the Workshop program costs $999 per year and adds one-on-one and group classes if you want to work with a real estate professional.

Self-Directed IRA

Roofstock has partnered with New Direction Trust Company to integrate your real estate investment options into a self-directed IRA (Individual Retirement Account). This allows you to defer taxes on your rental property as it becomes part of your retirement savings.

1031 Exchange

If you are interested in building a portfolio through the Roofstock market, the platform allows for timely 1031 trades. This means you can avoid capital gains tax by expanding your portfolio.

Roofstock One

Roofstock One is closer to a typical managed real estate portfolio than the platform's core offering. It is available to accredited investors and comes with a minimum investment of $5,000.

Instead of outright ownership, you buy shares of Tracking and Common Stock. Each of these shares is valued at 1/10th of the property's equity. This gives investors more freedom to find properties that suit their long-term investment goals.

Roofstock One also provides more portfolio diversification than simply investing in a single rental unit. If you want to spread risk or invest in multiple markets, this new feature is great news.

Requires a time commitment of at least five years. You must be an accredited investor to participate. That means you must provide evidence of $200,000 or more in gross annual income for the past two years, or $300,000 in joint income with your spouse during the same period. You will also need to show evidence that this level of income will continue.

Sell Your Home

If you want to sell a rental property, you can also list it through Roofstock. According to their website, most listings receive an offer within 18 days and only pay a 3% final listing fee. And the main advantage is that the tenants can stay put, so it is very attractive to other owners who want to buy an income-producing property right from the start.

Roofstock Fees & Pricing

Roofstock charges a fee of 0.5% or $500, whichever is greater, when you buy a property on their platform. There are no monthly account fees or opening deposit requirements, although there is a minimum investment requirement of $5,000.

For sellers, Roofstock charges 3% or $2,500, whichever is greater, after your property sells. This is very low compared to the fees sellers pay through traditional estate agents (typically around 6%), and the sales process is also much more streamlined.

Roofstock's price is really what makes it a game-changer for investors looking to tap into the single-family rental real estate market.

Just be aware that there are also closing costs, such as pre-title obligations for buyers and sellers; the platform will provide a good faith assessment of them before you invest.

Is Roofstock Only For Accredited Investors?

You do not need to be an accredited investor to buy or sell property through Roofstock. There is some confusion with Roofstock One, a premium service that the platform has been offering since 2019.

The platform aims to open the real estate market to ordinary investors. Making your service exclusive will be a no-brainer for accredited investors. Of course, you'll need to provide evidence of a strong credit score if you want to finance your purchase through company lenders.

Roofstock Customer Service

You can find Roofstock's phone number and email address at the bottom of the page. They have two offices, one in Oakland, California and the other in Dallas, Texas. You can also send them a direct message via their contact page.

Who Should Use Roofstock?

Roofstock is aimed at the average investor who wants to avoid the hefty transaction fees typically encountered when investing in single-family rental homes. His fees are extremely low and he conscientiously assesses additional costs such as closing fees.

Features are checked so you know what you're getting. This also applies to their property management services. you can build a diverse portfolio of markets across the country and be sure they will be serviced by qualified professionals.

And if you're an accredited investor looking for long-term, passive exposure to single-family real estate, Rooftstock One is a feature worth considering.

Who Is Roofstock Not Good For?

You don't have to be a real estate expert or business savvy to know that any outright real estate purchase comes with a big down payment. Roofstock can't do anything about it. it cooperates with some major financial institutions as lenders, but the financing terms always require you to provide 20-30% as down payment.

Because of this, Roofstock is not a viable real estate investment. However, you can still register and track properties. You can create investment goals and start saving while tracking properties that interest you.

Best Roofstock Alternatives

If you are looking to invest in income producing family homes, Roofstock is one of our favorite companies. The amount of due diligence you perform and the resources you have to find the right property are selling points. Plus, you don't need to be an accredited investor.

However, some alternatives to Roofstock may be superior depending on your capital and investment goals.

Highlights Fundrise Roofstock Streitwise
Rating 9/10 8.5/10 7/10
Minimum Investment $10 $0 $5,000
Account Fees 1%/year   2% annual management fee
Private REIT
YES
NO
YES
 

We like Fundrise as an alternative because of the low minimum investment requirement and low annual fees. It also pays quarterly dividends, and there's even a secondary market where you can sell shares to help improve liquidity. As for Streitwise, it's another popular option if you're interested in dividend income.

You can read our article on the best real estate investment sites for non-accredited investors for a complete list of your options.

Pros & Cons

 Pros

  • Comprehensive inspection process for all properties.
  • Available in 27 states
  • Low fees for buyers and sellers
  • There is no registration fee
  • Additional property management service
  • A passive investment option through Roofstock One

 Cons

  • Real estate investments are somewhat illiquid
  • Requires a large down payment
  • Roofstock One is open to accredited investors only

Roofstock: the Verdict

For buyers and sellers looking to limit their real estate transaction fees, Roofstock is worth considering. It uses technology to streamline the buying process and preview properties, making it easier for investors to find quality properties to invest in.

It is a very well designed platform with an attractive fee structure and excellent quality control processes. If you're looking to build a portfolio of single-family rental properties, Roofstock should be at the top of your list.

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