Roofstock Review 2021: Easy Remote Real Estate Investing

Would you like to create a passive income by investing in the real estate market?

Then investing in a rental property may be perfect for you!

Investing in rentals can be a lot of work- it takes time, money, and patience. Ain’t nobody got time for that!

In this case, we’re not talking about renting an Airbnb or flipping houses, but about single-family rental properties.

In this Roofstock review, we’ll discuss how investing with Roofstock works plus look at some pros and cons so you can decide if they are right for you!

Roofstock Review

Real estate may be one of the best investments you can make to earn more money on the side, and Roofstock is a great tool to boost your earnings.

Roofstock is an online real estate marketplace co-founded by Gary Beasley and Gregor Watson that allows investors to purchase  US-based single-family rental properties.

It is a platform that allows you to invest in passive income-generating properties without ever leaving your home.

Roofstock’s an easy and enjoyable way to invest in single-family residential (SFR) rental properties through crowdfunding, which gives you access to deals that you might not otherwise be able to get.

Roofsock even offers investment property managers (RPMs) who provide similar services as a traditional property manager – all at significantly lower costs.

Account Details

Single-Family Rental Properties

Investors can purchase single-family homes. These properties are typically priced below market value, so investors get a good deal on their investment property!

Portfolios

Investors can also purchase portfolios of homes that come with an RPM.

This option is perfect for those interested in purchasing real estate, but don’t want to find and manage

Fees

Like most online marketplaces and investing platforms, Roofstock also charges a marketplace fee to use its service.

Fees for the buyer:

Once you make an offer and it is accepted, you can expect to pay $500 or 0.5% (whichever is higher) of the contract price.

Keep in mind other fees will differ per rental. These include costs such as closing costs which include a property inspection report and title report, maintenance fees, HOA, management fees, and other costs of owning a property, such as insurance.

Fees for the seller:

Listing a property is free. However, when the property is sold, there is a 3% fee on the contract price or $2,500 per property, whichever is higher.

Key Features

One of the key features of Roofstock is it is a more hands-off approach to investing in real estate.

This platform provides you with access to some amazing properties all over the US on a searchable online database.

Each certified property comes complete with:

• pictures, physical address (when available)
• location data like schools or amenities nearby
• and property details including the purchase price
• Online open houses

The company offers a 30-day money-back guarantee.

Customer Service

Roofstock’s customer service department operates in three different ways.

The Roofstock team can be reached at their toll-free number at 800-466-4116. You can also chat with them online by filling out the chatbox on their website. Another way to contact their customer service is by emailing them at [email protected]

Roofstock Certification

Investors are protected from purchasing a property that is going to need immediate repairs to make it habitable, and sellers are protected by ensuring they list their home on the marketplace only when there has been a thorough inspection.

The Roofstock certification includes having an inspection to check the roof, heating and cooling system, exterior walls, a check for water damage in the house as well as looking at the windows to make sure there is no need for immediate repairs.

Who Is Roofstock Best For?

Investing in any real estate property requires some due diligence on the part of the investor. It also involves making a substantial investment of your money.

This service is best for:

• beginners who want to get started in real estate investments
• experienced investors
• anyone looking to make a long-term passive income
• investors who want diverse portfolios
• those who want to own rental property, and funds to do so

How To Invest With Roofstock

There are a few different options available for those who want to become part of this online marketplace.

Single-Family Properties

Investors can choose to purchase a property that is currently being rented or one that will be vacant when they close on it.

Another option for investors is purchasing vacant properties that need some work before being ready to be rented out again. This means there will be an additional cost associated with doing the work necessary to make it habitable again.

Retirement Investing

The market is always changing, and it’s important to adjust your investment strategy accordingly. One of the best ways to do this is by holding real estate in your IRA.

To hold real estate in your IRA, you will need to have a self-directed IRA account with a custodian that specializes in self-directed IRAs. All the paperwork and financial reporting will go to the custodian to make sure that you are not violating any rules regarding real estate transactions.

The real estate property you purchase with your IRA cannot be used by family members of the IRA owner or the owner of the IRA.

Cash is usually required when purchasing real estate within an IRA. The IRA must also pay all property ownership expenses.

Per Roofstock, there are benefits of owning real estate property in an IRA.

• “You don’t have to pay current taxes on rental income or capital gains, allowing your assets to grow more quickly.”
• “Real estate provides great diversification because its returns are not correlated with the stock market.”
• “When you reach the retirement age of at least 59 ½, the rents on your properties provide you with ongoing income.”

Roofstock One – Managed Investing

Investing in real estate can be a great way to build wealth, but it’s not for the faint of heart.  

If you’re looking for an easier or hands-off way to invest in property, Roofstock One could be the perfect option for those who are qualified as accredited investors.

Roofstock One is a new investment platform that lets investors buy 1/10 shares of single-family rentals without any management responsibilities on their part.  

To begin investing with Roofstock One, you must be an accredited investor with at least an individual income of $200,000 per year or a joint income of $300,000 per year.

You will need to make a minimum investment of $5,000 and pay the annual asset management fee of 0.5% of the home price as well as a management fee of 10% of the gross rent for Roofstock to take care of all the management and maintenance.

Roofstock will retain 10% ownership in the property and you will receive economic rights in the property, which includes tax benefits, net rental income, and appreciation.

Roofstock Pros & Cons

Pros

• You don’t have to be an accredited investor to invest in Roofstock
• Roofstock offers a 30-day money-back guarantee
• You can passively invest and start getting cash flow from rental income almost immediately
• The transaction fees are lower with Roofstock
• Buyers get access to properties in hot rental markets
• Buyers own 100% of the single-family houses they purchase
• Roofstock facilitates the closings on the property
• Calculations like Cap Rate, Gross Yield, Cash Flow, etc all calculated 
• It is free and easy to sign up on the Roofstock website

Cons

• There is a high minimum investment – the total price you are paying for the property
• To invest in Roofstock One there is a minimum investment of $5,000
• It is a long-term investment
• You cannot cash out of the investment quickly if you need cash fast in the case of an emergency

How To Sign Up With Roofstock

Signing up for an account with Roofstock is completely free and easy.

Go to the Roofstock homepage and click the signup button in the upper right corner of the page. This will take you to a “Welcome to Roofstock” page.

Roofstock provides three ways to sign up on the Welcome page:

1. fill in your personal information on Roofstock
2. use your Google account
3. use your Facebook account

Next, you will need to create your Roofstock Investor Profile. It will ask you whether you are an accredited investor and what your goals are.

Once you’ve submitted this information successfully, it’s time to start looking for properties Roofstock lists that are available to invest in.

Is Roofstock Right For You?

Roofstock gives you an opportunity to invest in investment properties and start getting passive income from rental properties, but there is more work to do on your end.

Roofstock is the right option if:

• you have the desire to get started investing in rental properties
• are willing to put in a little work and do your due diligence when selecting properties
• and if you have some finances available that you can invest in the properties.

Comparing Roofstock To Competitors

Our review has shown Roofstock is a great platform for real estate investors who would like to own single-family home rentals without having to personally manage them to use to build a passive income stream.

But there are other real estate investment platforms that also offer ways to invest and earn passive income cash flow in the real estate investment market.

Roofstock Vs. Fundrise

Fundrise is a crowdfunding platform that allows you to buy and sell real estate investment portfolios by investing in one of two main ways through REITs and eFUNDs.

Depending on your investing goals, there are different portfolios for real estate investing available on Fundrise. You can choose from one of the following: Starter, Supplemental Income, Balanced Investing, or Long-term Growth.

The minimum to get started investing with Fundrise is as low as $10 with the Starter portfolio.

While both Roofstock and Fundrise are easy to use to invest in real estate, there are some key differences that investors should be aware of.

• Entire single-family homes are purchased on Roofstock.
• Real estate investments are made through REITs and eFUNDS on Fundrise
• There is no minimum to get started on Roofstock, however, the total investment is the purchase price of the property you are buying
• There is a 1% annual fee on Fundrise
• The fee for buyers on Roofstock is $500 or 0.5% (whichever is higher) of the contract price and the fee for sellers is 3% fee on the contract price or $2,500, whichever is higher
• Roofstock offers a 30-day money-back guarantee

Roofstock Vs. Crowdstreet

CrowdStreet is a real estate crowdfunding platform that focuses solely on commercial properties.

It offers investors the opportunity to buy shares in commercial properties that include multifamily homes, office buildings, retail strip malls, self-storage facilities, and even parking garages.

Investing with CrowdStreet is based on performance rather than property type which makes it unique from other real estate investment platforms like Roofstock who only focuses on single-family residential properties.

While investing with Roofstock requires an investor to have more capital available than investing on CrowdStreet, both platforms are easy to use and offer investors an opportunity for passive income through real estate investments.

There are three ways to invest with Crowdstreet.

• Diversified funds and vehicles
• Individual deals
• Tailored portfolio

Accredited investors (those with a net worth of $1 million or a high income) can get started on CrowdStreet with a minimum of $25,000. The fees on CrowdStreet are between 0.50 % to 2.5%.

Roofstock Vs. PeerStreet

PeerStreet is another real estate crowdfunding platform that specializes in providing a different way to invest in real estate.

With PeerStreet, accredited investors can invest in peer-to-peer lending through real estate loans. The loans are not unsecured but are backed by real estate assets.

Investors can invest as little as $1000 and get started without any lender fees or interest rate charges.

Fees are charged differently with PeerStreet than other crowdfunding platforms. For example, a borrower may obtain a loan on PeerStreet with 7% interest. PeerStreet would then sell it to an investor and pay them 6.5% of the interest to the investor.

PeerStreet’s fee is the difference between what the borrower is paying and what PeerStreet is paying the investor who buys the loan.

With PeerStreet, you have to consider your goal when investing instead of picking from pre-selected portfolios like with Roofstock and Fundrise.

Roofstock Vs. Wealthfront

Wealthfront is a Robo-advisor that specializes in providing investors with low-fee investment advice.

Investing with Wealthfront is easy and ensures that you are protected in case of the market dropping. Investing with Wealthfront offers a way to invest in stocks, bonds, real estate, and ETFs for low fees.

Investing with Wealthfront requires no minimum and does not charge fees for investing with balances under $5,000. There is a required minimum deposit of $500.

Wealthfront is easy to sign up and easy to use with automatic portfolio rebalancing. If you are looking for a Robo-advisor that can provide investment advice without the high fees of other companies, then Wealthfront may be the right fit for you.

Roofstock FAQs

Is it safe to invest with Roofstock?

It is generally safe if you do your research on the rental homes you want to purchase. There is a 30-day money-back guarantee on property purchases and they offer a Lease Up Guarantee.

However, there are risks involved with any investment. The investment may make less money but it may also make more money than their experts predict.

Is Roofstock a good investment marketplace?

Yes. It is a good online marketplace for real estate investing.

It is a great way to get started in real estate investing. Investing with Roofstock requires an investor to have more capital available than investing in other real estate online marketplaces.

Where does Roofstock get properties from?

They source a majority of their properties from property owners directly who want to sell, the agents and brokers who represent investment property sellers, and property management companies.

How do I invest with Roofstock?

To get started, an investor must sign up to become part of the online marketplace. The process is free and there are no fees for signing up.

An investment can be made by researching properties based on your specific criteria, selecting a few that meet your needs, and submitting an offer.

To use Roofstock, you do not have to be an accredited investor. However, if you want to invest in Roofstock One, you will need to be an accredited investor and there is a minimum investment of $5,000.

What sort of return should I expect from Roofstock?

It depends on the single-family residence you want to purchase. Roofstock provides details of the neighborhood trends and also a neighborhood score in each property listing.

Investing in single-family residences may yield, on average, between five and eight percent with a gross return of 11% to 12% before expenses.

When you decide to sell, you will also get any appreciation the property has accrued.

Final Thoughts

Our Roofstock review reveals that the company is a good investment marketplace for people who want to invest in single-family residences and start getting passive income from rental properties.

Investing with them requires a bigger investment than other real estate online marketplaces, but they do have lower transaction fees when compared to traditional closings on property.

Investments can have long-term cash flow from rental income which is great for their finances.