Here are some of the features that Roofstock claims set it apart from traditional estate agents and real estate crowdfunding platforms alike.
Invest in Single-Family Rental Properties
Roofstock focuses on helping users purchase single-family rental properties and it does so by making its fees much cheaper than a standard real estate agent. You can browse a variety of properties on the Roofstock marketplace to find potential investment opportunities.
Transaction costs are the biggest barrier to entry for many investors when it comes to real estate investing. Rental properties especially can be intimidating, because the down payment is so high.
While Roofstock can’t (and shouldn’t) reduce the down payment too much, its transaction fees for single-family rentals are low compared to conventional real estate agents.
Roofstock vets all its properties thoroughly before listing them on its online marketplace. This is one of the main selling points of the platform since it helps you with due diligence and to find properties that match your investing goals and budget.
Here’s what Roofstock provides for its 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’s also plenty of information regarding the financials of properties, like how net cash flow should play out over the next five to ten years. Overall, Roofstock provides lots of documentation and useful information, and you can schedule a property inquiry call with its team as well if you have questions.
Plus, with its new “shop with an agent” option, you can work with a Roofstock certified agent to find real estate opportunities that match your goals, risk tolerance, and capital.
Rental Property Management
Roofstock offers users the opportunity to have their property taken care of by experienced property managers. The platform vets its managers as rigorously as its rental properties. If you’re looking for a passive real estate investment, this feature is for you.
Property management is an option rather than a mandatory feature. You can manage your Roofstock properties in person, ensure the property meets your standards, and get to know your tenants.
Low Minimum Investment
Roofstock has a $5,000 minimum investment amount, although there’s no fees for actually opening your account. This is a higher fee than certain real estate crowdfunding platforms charge. However, it’s very low for the world of single family home investments.
Educating customers is a hallmark of a good business, and the Roofstock team hasn’t disappointed here. Its Roofstock Academy program helps teach investors the skills they need to invest in real estate, regardless of if they invest through Roofstock or on their own.
There’s no free option for study at the Academy, although you can check out free articles via the Roofstock Knowledge Center.
The self-study program costs $399 per year, which will get you access to 50+ hours of on-demand lectures. Upgrading to the Workshop program costs $999 per year and adds group coaching and one-on-one coaching sessions if you want to work with a real estate specialist.
Roofstock works with the New Direction Trust Company to integrate your real estate investing choices into a self-directed IRA (individual retirement account). This allows you to defer taxes on your rental properties, as they become part of your retirement savings – your IRA will be listed as the holder on your title report.
If you’re interested in building a portfolio through the Roofstock marketplace, the platform allows you to make timely 1031 exchanges. This means you can avoid capital gains tax by upscaling your portfolio.
Roofstock One is closer to a conventional managed real estate portfolio than the platform’s main offering. It’s available to accredited investors and comes with a minimum investment of $5,000.
Rather than direct 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 just investing in one single rental unit. If you want to diversify risk or invest in several markets, this new feature is excellent news.
It requires a time commitment of at least five years. You’ll need to be an accredited investor to participate. That means you’ll need to provide evidence of gross income of $200,000 per year or over for the past two years, or $300,000 combined income with a spouse for the same period. You’ll also need to show evidence that this income level is set to continue.
Sell Your Home
If you’re looking to sell a rental property, you can also list it through Roofstock. According to its website, most listings receive an offer within 18 days, and you only pay a 3% final sale fee. And the main advantage is that tenants can stay in place, so it’s very enticing for other landlors who want to buy income-generating properties right from the start.