Roofstock Review 2021: Everything You Need To Know
- No property showings to disrupt tenants
- Network of global listings and investors
- Low seller fees compared to traditional mortgage brokerage
- Earn rental income immediately after closing
- No mobile app
- To invest using a self-directed IRA, investors must open an account with a third party (New Direction Trust Company)
- Not all U.S. states are not represented on the Roofstock marketplace
What Is Roofstock?
Roofstock is a real estate investment marketplace that aims to make the real estate investment process simple, cost-effective and accessible for investors. Serving investors worldwide, Roofstock’s platform is available to first-time investors as well as global asset managers. Roofstock helps investors reach their goals with innovative technology and three service platforms:
- Roofstock Marketplace. An online marketplace for investment property and portfolio buyers and sellers.
- Roofstock One. Investors own whole or fractional shares of fully-managed investment properties.
- Roofstock Platform Services. A comprehensive solution for large investors to build or scale their real estate portfolios.
Single-Family Rental Market
Roofstock’s marketing strategy rests in the single-family rental, or SFR, market, which has proven to produce strong, stable cash flows for investors over many economic cycles. Some benefits of investing in the SFR market with Roofstock include:
- SFR properties have elements of appreciation potential and income potential.
- SFR returns are similar to the stock market but are less volatile.
- SFR returns do not correlate with the stock market and may provide a better outlook for investors.
Here are some key features of Roofstock:
- 30-day money-back guarantee with free property re-listing
- Investors can buy and sell property as well as bring their own property to the market.
- Roofstock matches investors with property managers to oversee rental property.
- Investors can live anywhere in the world and invest in Roofstock’s marketplace.
- Roofstock’s property management services allow investors to have a hands-off approach while generating passive income.
- 15- to 35-day property listing, eliminating staging, showing, out-of-pocket costs or disruption of tenants to prepare for listing
- Property must be certified before listing
How Legitimate Is Roofstock?
The Better Business Bureau has rated Roofstock a B+, which is generally a good rating. Roofstock has had no lawsuits and only two complaints within the last year.
How Does Roofstock Work?
Roofstick walks you step-by-step through the rental property investment process whether you are a buyer or seller.
Buying on Roofstock
Using Roofstock’s four-step solution, you can confidently find and buy the investment property that’s right for you.
First, decide your spending budget, the amount of your down payment and whether you are paying cash or financing a mortgage loan. Roofstock’s custom filters allow you to tailor your property search by location, list price and desired return. You can even sign up for alerts that notify you when properties that match your criteria become available.
You can review the details of the properties resulting from your search, including:
- Options for local property management
- Property photos, floor plans, 3-D virtual tours, 3-D models and exterior views
- Neighborhood and local school ratings
- Insurance quotes, title reports and property inspection and valuation
- Current tenant payment history and lease details
- Interactive return and cost estimate calculation tools
3. Make an Offer
It will cost you nothing to submit an offer on a property. However, if your offer is accepted, Roofstock charges a marketplace fee of $500 or 0.5% of the contract price, whichever is higher. The fee covers the costs of transaction management services, underwriting and certification services.
You can make an offer on Roofstock by going through what’s called Open House, or you can get pre-approved by a lender.
On Open House, you can:
- View new exclusive listings
- Get an early-bird look at properties
- Make an offer within the first 24 hours of a new listing
If you choose to finance your property purchase, you can get pre-approved by a lender. Doing so will give you an advantage over buyers with similar offers and no proof of funds.
Roofstock’s service and transaction team works with buyers throughout the entire process of escrow and closing. For cash purchases, you can expect to close within 15 days. If you’re financing your purchase, it will take about 30 days.
Selling on Roofstock
Investors choose Roofstock to sell rental properties, to keep current tenants and earn continuous rental income through closing. The Roofstock marketplace is attractive to sellers because of the significantly lower fees than what real estate agents charge at traditional mortgage brokerages.
You can follow this simple four-step process to sell your property on Roofstock.
1. Submit a Listing.
Enter your property information, answer some questions about your property and upload some photos of your property. Based on the information you provide, you’ll receive a price estimate for free.
2. Obtain a Roofstock Certification.
Roofstock takes care of preparing your property for listing and sale. It arranges the property inspection, orders a preliminary title and other applicable documents for the confident sale of your property.
3. Launch Your Listing
Roofstock creates an appealing listing for your property, which includes all relevant documents. It publishes your listing to global investors on the Roofstock marketplace for maximum exposure.
4. Receive Offers and Close
All offers on your property are received on the Roofstock marketplace. Review your offers, accept a bid and Roofstock coordinates the closing process from beginning to end. Within 30 days of signing the purchase and sale agreement, your transaction will be complete.
Who Should Invest in Roofstock?
Investors who are concerned about economic downturns and market volatility might be particularly interested in investing with Roofstock. The SFR market is an alternative to the stock market in the event of a recession.
Property Management Services
Roofstock investors can have the satisfaction of being property owners without the headaches that come with being a landlord. Roofstock’s property managers save investors time by handling the day-to-day property management operations.
The company takes care of property maintenance and repairs, and it communicates with tenants, ensuring that investment properties are safe and secure. The property management service is simple:
How The Service Works
Roofstock Buyer and Seller Fees
Purchasing property on Roofstock is free. If you make an offer and it’s accepted, Roofstock will charge a fee of $500 or 0.5% of the contract price, whichever is greater. The fee covers the costs of underwriting, transaction management services and certification services.
Roofstock doesn’t charge a fee to list your property on the marketplace. However, if you list your property and it’s sold, you will be charged $2,500 or 3.0% of the sale price, whichever is higher. Compared to the 6% normally charged by real estate agents for traditional brokerage, Roofstock’s fees are relatively low.
Minimum Required Investment
There’s no minimum required investment with Roofstock besides the price you pay to purchase a property on Roofstock’s marketplace. However, if buying shares of rentals, investors need to have at least $5,000.
Roofstock vs. Competitors
Roofstock offers similar services as other real estate marketplaces. Here’s how two of the crowdfunding competitors compare with Roofstock.
|Fees||$500 or 0.5% of purchase price||1% (plus $125 for IRAs)||0.50% to 2.5%|
|Investment Options||SFR||Electronic real estate trusts (REITs), IPOs||Single-sponsor real estate funds, managed portfolios|
|Minimum Investment||$0 ($5,000 for Roofstock One)||$500||$25,000|
Roofstock Mobile Experience
Roofstock has a rather robust website that’s loaded with information and topics of interest for rental property investors, buyers and sellers alike.
Although Roofstock doesn’t have a mobile app yet, the marketplace partners with Stessa, which is a cloud-based platform, making it easy for investors to track rental income, expenses, leases and other property-associated information.
Stessa is free for Roofstock investors to use and is accessible on the web and also on iOS and Android mobile apps.
Risks of Investing in Roofstock
- Non-accredited investors have no options for passive or automated investments.
- Actual property investment may cost more than REITs.
If you’re looking for a new way to invest in your future through real estate, then you should consider giving Roofstock a try.
With Roofstock, you can buy and sell rental property any time, anywhere. Roofstock provides a means to build wealth through real estate and to make it simple and convenient for any investor.
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- Business Insider. 2021. "Roofstock Review: Invest in Single-Family Rentals With Cash, Financing, or IRAs."