Roofstock review - investing in rental properties made easy
Roofstock is the perfect platform for any first-time real estate investor. They offer low fees, homes with tenants already occupying them, and you don’t have to be an accredited investor to open an account.
- Low-fee investing
- Real estate
- Beginning investors
Investing in real estate has the potential to make you a lot of money. So if you have some extra cash to invest, looking into real estate can be a lucrative way to grow your long-term wealth.
There are many ways you can go about this, but one of the most popular methods is to buy rental properties. Owning a rental property can become a steady source of passive income.
If you’ve been thinking about buying rental properties, you have plenty of opportunities in the market. There are even businesses that specialize in helping people purchase specific types of rental properties.
In this article, I’ll try Roofstock and share what it was like to test it out. From there, you can determine if it’s something you want to use for investing or not.
How does Roofstock work?
Roofstock is a company that allows you to invest in , with a focus on . They offer a wide selection of homes to buy, and you can make money by using them as rental properties.
They sell homes with tenants already in them
One of the most exciting things about Roofstock is the homes they sell are already being rented out. Essentially, property owners who want to move on from investing in rental properties list their houses on Roofstock.
From there, new investors purchase these listed properties and have a steady flow of rental income right from the start.
You might be wondering why the previous homeowners would want to sell a property capable of making money. The answer is actually pretty simple: In many cases, people want to diversify their investments, or they may want to move away without having to worry about being a landlord.
Either way, it’s an excellent investment opportunity for anyone who wants to find a passive income source and knows the real estate market reasonably well.
Each property must be certified
Roofstock has a comprehensive system that ensures homes are held to a certain standard when being offered through their service. For example, each property will need to be certified before it can be considered.
Many different factors go into getting a property certified. First, the property must be inspected by a professional investment property inspection business. Then, any repair costs will need to be estimated, and the property will be given an accurate valuation. Other necessary items include photos of the property, property floor plans, and a title report.
With this in mind, you can see that Roofstock holds its multiple properties to a high standard. They work diligently to ensure that only the best single-family rental properties are available on their platform. Roofstock will even refuse to list properties if the seller is asking for a price they feel is too high.
You can also invest through Roofstock One
If you want a more passive approach to real estate investing, Roofstock now offers the ability to customize actively managed Roofstock portfolios of real estate, via Roofstock One. You’ll need a minimum investment of $5,000 to get started investing, but at least that’s way less than actually purchasing an entire property.
It’s important to note here, that you should definitely plan to stay invested for at least five years. Real estate investing isn’t a make money quickly kind of investment.
How does Roofstock work for sellers?
As a seller, you can enjoy a relatively painless and affordable experience when selling your rental home on Roofstock. Here’s how the process will unfold:
- Submit your listing. You’ll need to answer some questions about the property and include pictures to showcase it.
- Roofstock certification. The Roofstock team will run through some upfront paperwork and due diligence on the property. The goal is to give potential buyers the confidence they need to move forward.
- Launch the listing. After the property has passed the Roofstock certification process, an attractive listing will go live on the site. Typically, this process takes between 15 to 35 days.
- Accept an offer. You can accept the offer completely online. Once you sign the purchase and sale agreement, you should expect to close within 30 days.
Throughout the process, Roofstock will handle the paperwork for you. With that, you can enjoy a streamlined experience that connects you with interested buyers. Plus, you won’t have to go through the process of removing a tenant and preparing the property as you would in a traditional marketplace.
Roofstock fees and pricing
With fees and pricing, you’ll see why Roofstock stands out from the competition. It’s a great platform that offers you real estate investment opportunities at reasonable prices.
Roofstock offers their service for half the fees
You can expect lower fees than you would typically pay. When you do business with a traditional real estate agent, there will be fees of around 6%. Roofstock can cut fees in half or go even lower than that.
Sellers will typically be paying a 3% marketing fee to Roofstock. Those who are buying will be paying half a point in commissions, so it’s truly much more cost-effective than working with traditional realtors.
Signing up for Roofstock is free
You’d expect there to be a catch for signing up for the service, but there isn’t. Signing up for Roofstock is entirely free.
The reason they can provide you with fees lower than traditional real estate agencies is due to technology. They use technology to pair potential buyers and sellers efficiently.
This streamlines the process, and they can pass on these savings in far lower fees.
30-day satisfaction guarantee
You can view properties right away when you sign up, and buying a home through this platform will give you direct ownership of the properties.
Roofstock offers a 30-day satisfaction guarantee. This means that if you are not satisfied with a property within 30 days of purchasing it, you can notify them in writing.
They will then re-list the property without charging any money and Roofstock will even repurchase it if it does not sell within 90 days.
What some Roofstock offerings look like
To give you an idea of what you can buy, here’s what I was able to pull up in a basic search:
The property I highlighted above shows two stars out of five for the neighborhood rating, a rent of $650, an asking price of $55,000, and several other basic metrics.
Now let’s look at the listing page:
As you see, you get a bunch of information on the property, valuations, and neighborhood. You can even go visit the property if you’d like.
Should you use Roofstock as a buyer?
Roofstock will work out well for you if you are a first-time investor. If you’re thinking about investing in real estate and you’re not an accredited investor, this platform will be convenient for you.
It’s easy to understand, and the information you need will be at your fingertips. There will be some work involved in researching the properties, but it will be a potentially very lucrative investment for you.
This is preferable to buying properties through traditional real estate services in several ways. The fees are much more reasonable, and everything is very intuitive overall.
Should you use Roofstock as a seller?
As a seller, you stand to gain by using Roofstock.
The first major feature that Roofstock provides is the connection to buyers looking for an income-producing property. If you are ready to move on from a single-family home with tenants in place, you won’t have to remove the tenants before the sale of the home. Not only will this save you time and hassle, but also money. You’ll be able to collect rent from these tenants until the closing day.
Beyond that key feature, Roofstock provides a streamlined process with minimal paperwork on your end. And the best part is that you won’t have to pay an arm and a leg for these services. You’ll only have to face a 3% commission fee, which could save you thousands!
Of course, Roofstock will only be able to provide you with a valuable experience if you are trying to sell a single-family home with tenants in place. If that’s the case, then Roofstock is an excellent decision.
Pros & Cons
- The homes have already been inspected — Homes on Roofstock have been thoroughly inspected and have gone through a stringent process ahead of being listed. It is a great way to purchase properties that can give you a constant flow of money.
- There are already tenants — The house you buy on Roofstock will be making money when you buy it. The home is already being rented out the day you purchase, meaning your money will come in immediately.
- Roofstock offers property managers — Another thing you can take advantage of is that Roofstock offers affiliated property managers without making them a necessity. You can have a professional manage the property for you, or you can act as the landlord and property manager yourself.
- Low fees — You can avoid paying the standard 6% charged by traditional real estate agents. Sellers will have to pay only out 3%, and buyers will just spend half of a point of the agreed-upon price.
- Great customer service — The customer service of Roofstock is outstanding too. The fact that they offer you a 30-day guarantee shows you how confident they are in the homes listed on their platform.
- They're open to more than just accredited investors — Finally, you don't have to be an accredited investor to invest in properties using Roofstock. This makes it possible for people just starting out with real estate investment to enjoy the service.
- Large downpayment — If you don't have the means to buy a property outright, you'll be forced to look into mortgage options. This will require a large down payment and may make things difficult for potential investors.
- Owning a rental property requires work — Owning a rental property is not always easy, either. You'll need to make sure you set aside money in case of emergencies, for instance. If something breaks in the house (like a dishwasher or furnace), you as the owner are responsible for it.
- You have to do a lot of your own research — You'll need to research the property you're thinking about purchasing extensively.
The Roofstock platform offers potential buyers only the best single-family rental properties via their online marketplace. Each home goes through a strict process before it’s even listed on their platform, making it one of the most convenient and cost-effective ways to purchase investment properties. The 30-day guarantee makes it easier to invest in one property too.
Just don’t forget about the risks of investing in rental properties and being a landlord. While you can make excellent passive income, you can also bring on a ton of headaches.