Deciding where to invest in real estate can be a big step. Roofstock vs Fundrise – two big names that often pop up when you’re planning to invest in real estate.
Both have their strengths and understanding these can be key to developing your investment strategy.
Whether you’re a first-time investor or looking to expand your portfolio, getting to know these platforms is essential.
Let’s take a no-nonsense look at Roofstock vs. Fundrise to determine which platform might suit your investment strategy best, especially if you’re considering getting into a rental property.
- Roofstock is an online platform for buying certified rental property, offering investors thorough vetting, ownership transfer, and property management options.
- Their fee structure includes marketplace fees to buy a rental property and optional fees like having Roofstock handle property management.
- Fundrise offers an accessible investing experience through eREITs and eFUNDs, providing diverse portfolio options and various account levels.
- It also has low initial investments starting at $10, with a clear fee structure of 1% annually.
- While Roofstock allows for direct ownership of single-family homes and offers fractional shares for diversification, Fundrise democratizes investment with low-entry costs.
Final Verdict: Roofstock Vs. Fundrise
When it comes to affordability and a variety of plans and properties, Fundrise takes the lead over Roofstock.
Fundrise stands out with its low minimum investment threshold- allowing you to dive into the real estate market with as little as $10.
This democratizes passive real estate investing, making it possible for almost anyone to start building a portfolio without the need to commit a large sum of money upfront.
Moreover, Fundrise’s fee structure is transparent and investor-friendly, with an annual fee of just 1%.
In comparison, Roofstock, while offering direct ownership of rental properties and a marketplace for buying and selling, has a higher barrier to entry in terms of initial costs.
Their marketplace fee starts at 0.5% or $500, whichever is greater, and the initial investment for Roofstock One’s Starter Pack is $5,000- significantly higher than Fundrise’s $10 entry point.
But let’s get more into the comparison and see what features stand out to you and work better for your investment goals.
Roofstock serves as an online hub for real estate investors wanting to generate monthly rental income by acquiring and managing certified rental investment property.
Acting as the middleman, Roofstock represents the seller throughout the transaction, making it easier to find and purchase properties.
However, these aren’t just any properties. All properties on Roofstock undergo thorough vetting to ensure their quality and viability as investment choices.
I’ll get into more details below, but check out my full RoofStock Review to get an in-depth rundown on the platform.
Roofstock is an innovative online platform for investing.
It offers a range of services and features designed to make the process of buying, selling, and managing investment property more accessible and efficient.
Here are the key features of Roofstock:
- Wide Range of Properties: Offers diverse single-family rental properties across the U.S. with detailed information and virtual tours.
- Roofstock Certification: Each rental property is thoroughly inspected, guaranteeing quality and reliability.
- Taxable Account: Focusing on direct ownership. It’s perfect if you want to get started with buying and managing your own rental homes as a property manager.
- Investment Accessibility: Available to both accredited and non-accredited investors.
- 30-Day Money-Back Guarantee: Offers a safety net to investors, enhancing trust and confidence in property investments.
Roofstock offers a unique path to earning rental income. Here are the options for investing:
Single-Family Homes: Investors can choose homes with tenants for immediate rental income or select vacant homes that may require some work, offering the potential for a value increase.
Short-Term Rental Properties: For those interested in the higher payout of vacation rentals, Roofstock includes properties suited for short-term leasing.
Self-directed IRA: Roofstock collaborates with New Direction Trust Company, offering investors a solution for acquiring and maintaining real estate investments within a self-directed IRA.
Portfolio Investment Option: Roofstock caters to larger-scale investors by offering portfolios that include multiple properties to diversify portfolios.
When it comes to investing in real estate through Roofstock, there are two primary paths you can take: the Regular Roofstock Account and Roofstock One:
Regular Roofstock Account
The Regular Roofstock Account is the standard option for investors looking to purchase single-family rental properties directly.
This account is ideal for individuals who want the full experience of being a property owner, including all the responsibilities and potential rewards that come with it.
- Direct Ownership: You have complete control over the property you purchase, making all the decisions regarding its management and maintenance.
- Full Selection: Access to the entire marketplace of Roofstock-certified rental properties
Roofstock One for Accredited Investors
This premium service is designed for investors who have achieved accredited status and are looking to invest in the real estate market without the complexities of direct property ownership.
Roofstock One allows you to buy fractional shares in single-family rental properties, which means you can invest in high-quality real estate with a much lower initial capital outlay.
With a minimum investment as low as $5,000, investors can diversify their portfolio across multiple properties, spreading risk and increasing the potential for stable returns.
Roofstock One also includes property management services, so investors can enjoy passive income without the day-to-day responsibilities of being a landlord.
Pricing & Fees
- Buying Fee: 0.5% or $500, depending on which one is greater.
- Roofstock One Fee: $5,000; add more funds in $100 increments
- Property Management Fees: Cost varies depending on the provider
- The Extras: Property repairs, insurance, taxes, and HOA fees when you own property are all on you
Roofstock values customer service highly, and they’re known for their responsiveness and willingness to assist you.
You can contact them by phone at (888) 402-6913 or via email at [email protected]. Unfortunately, their business hours are not listed on their website.
Rest assured that Roofstock’s customer service provides answers and solutions whenever you have questions or need assistance.
Roofstock Pros & Cons
- Buy rental properties- be the sole owner
- Simplified real estate process
- Pre-vetted properties
- Detailed property information
- Offers a self-directed IRA
- Open to nonaccredited investors
- Roofstock One for accredited investors
- Limited property selection
- Higher account costs
- Regular account- manage the property yourself
- Selling a property can be difficult
- Fees for Roofstock managing the property
- Roofstock One minimum- $5,000
- High investment costs- you pay for a whole property
- No REITs investing (no property shares)
Fundrise is different from your typical real estate crowdfunding platform- it starts with fractional shares available at just $10.
So, whether you’re a seasoned real estate industry pro or starting, you can jump into commercial real estate projects with a pretty low initial investment.
It’s a game-changer, especially if you’re new to rental property investing.
It’s my top pick for real estate investing, and I can’t wait to share the details with you! Also, read my in-depth Fundrise Review to get a more comprehensive view of the platform.
Fundrise offers a range of unique features that make it a standout choice among investment apps.
- Accessibility for All: Fundrise is open to accredited and nonaccredited investors, making investing accessible to everyone.
- Low Entry Point: Start investing with as little as $10. This minimal initial investment is ideal for those who want to begin with a small budget.
- Diverse Investment Options: Fundrise primarily focuses on Real Estate Investment Trusts (REITs) and eFunds, allowing you to diversify your portfolio with commercial and residential properties.
- Levels of Investment Plans: Fundrise offers 5 investment plans tailored to your funds and real estate goals.
- User-Friendly Platform: Its user-friendly website and app make it easy for real estate investors to navigate and manage their portfolios.
Fundrise offers a range of choices to suit different investment strategies:
- Income Real Estate Fund: For those searching for a reliable income stream, the Income Real Estate Fund has got you covered and provides a steady source of income.
- Flagship Real Estate Fund: If you aim for long-term value appreciation, you can start with a minimum investment starting at $10,000 and dive into a growth-oriented investment trust.
- Innovation Fund: This option breaks away from traditional real estate investment trust models. It’s perfect for folks who want to blend real estate and technology in their portfolio.
Fundrise understands that every investor is unique and offers a range of investment plans tailored to meet different needs.
Whether you’re just starting or an experienced accredited investor, Fundrise has a plan for you:
- Minimum Plan Investment: $10
- Perfect for: Beginner investors who are nonaccredited.
- Plan Benefits: Low investments in fractional shares.
- Minimum Plan Investment: $1,000
- Perfect for: Those who have more capital to invest.
- Plan Benefits: Diversify your portfolio and explore more investment opportunities.
- Minimum Plan Investment: $5,000
- Perfect for: Investors prepared to make a more substantial financial commitment and seek greater growth opportunities.
- Plan Benefits: 3 Plans: Supplemental Income, Balanced Investing, and Long-Term Growth.
- Minimum Plan Investment: $10,000
- Perfect for: Experienced investors looking for greater investing options.
- Plan Benefits: Access to investment opportunities with potentially higher returns.
- Minimum Plan Investment: $100,000
- Perfect for: Investors with accredited status seeking exclusive investment opportunities.
- Plan Benefits: Designed for an accredited investor and offers the most comprehensive investment option, including priority access to investor relations.
Pricing & Fees
- Property Management Fee: 0.85% per year
- Advisory Fee: 0.15% per year
- Initial Property Fee (Origination): up to 2%
- Early Withdrawal Fee: 1% – 3% (if withdrawing after the initial 90 days or before 5 years)
Do you need a helping hand with your investments or have some burning questions? No worries! Fundrise’s Investor Relations team has got your back.
You can contact them by filling out the contact form on their website or simply email them.
They’re there to assist you Monday to Friday, except on holidays, starting at 9:00 AM and wrapping up at 5:00 PM Eastern Time.
Fundrise Pros & Cons
- Welcomes both accredited and nonaccredited investors
- $10 minimal investment
- Offers a wide range of options for investing
- Easy to use
- Very low annual fees
- No additional transaction fees
- Annual account fees (not high, but some stock investing is commission-free)
- Money is typically invested for 5 years- withdrawal fees before then may apply
What are some investment platforms for real estate?
If you’re interested in real estate investment, some user-friendly platforms can help you get started without requiring a large initial investment. Here are a few options:
Fundrise allows you to invest in real estate with as little as $10. They offer investment choices like eREITs and eFunds, making it easy for beginners to diversify their real estate portfolio.
This is the best option for new investors and those who don’t want to buy and manage a property.
Roofstock is an option if you have the funds to buy a rental property and want to be the sole owner and beneficiary of all rental income.
These platforms offer a convenient way to start investing without needing significant money or in-depth knowledge.
Before you invest, remember to do your research, assess your risk tolerance, and consider your financial goals.
Is Fundrise the best real estate investing platform?
Fundrise can be a strong choice for newcomers to invest in property, with investments starting at only $10.
It offers flexibility in fund selection, the ability to create personalized investment plans, and access to specialized tools through Fundrise Pro.
Not only is it great for new investors, but accredited investors can also get into it and get a higher plan to invest more funds and get access to vetted properties.
These features make it a user-friendly option for those looking to start a supplemental income in real estate investment.
How do real estate investing apps work?
Real estate investing apps offer a user-friendly interface where you can explore various real estate opportunities, from single-home properties to commercial ventures.
You can easily allocate funds, track your investments, and diversify your portfolio.
This digital approach provides the convenience and transparency that traditional investment brokers often lack.
Is Roofstock a reliable investment app?
Roofstock is considered a reliable investment app for real estate. It offers a marketplace where you can buy and sell properties with existing tenants.
It provides detailed property information, including financials and inspection reports, making it easier to make informed investment decisions.
What’s the 1% rule when investing on Roofstock?
The 1% rule on Roofstock is pretty straightforward.
It just means that when looking at a rental property, the monthly rent should ideally be around 1% of what you paid for the property.
So, if you invest $100,000 in a place, you’d want to aim for about $1,000 a month in rent.
But remember, it’s a rule of thumb, not a strict law. Other factors like local market conditions and financial goals should also influence your decision.
Roofstock shines with its certified rentals, self-directed IRA, and direct ownership in single-family homes.
At the same time, Fundrise attracts with its low minimum investment and diversified portfolios in real and commercial real estate projects.
I think Fundrise is best for new investors, but the best platform for you heavily depends on your investment goals and funding and preference for property management vs. REITs.
No one says you can’t start with one and then use both when the money rolls in. So sign up and go luck investing!