- Real Estate
Roofstock Review -- Buy and manage rental properties online
Roofstock is a marketplace for buying and selling single-family rental properties, most of which are offered with a “certification” and some even include a rent guarantee
Roofstock
- Investment Types: Real Estate
- Sectors: Residential Real Estate
- Minimum Investment: $20,000
- Open to all investors
Pros
- Services available across the entire US, catering to various property types.
- Free to search and browse listings and use (excellent) calculators
- Certification program for most listed properties
- Helpful categories (eg "high yield", "under $100K")
- Outstanding site design and usability
Cons
- Buying a rental property typically requires at least 20% of the purchase price
- Insurance costs are separate from the management fee.
- Roofstock currently operates in limited markets
- Selection is dependent on Roofstock's sourcing (excludes MLS-listed properties, for example)
Overview
This Roofstock Review will help you learn more about Roofstock's investment offerings, including how the alternative investments on Roofstock are structured, and what your potential returns might be. You can read more about the criteria we use to review investment platforms here.
Roofstock is not, technically speaking, a “crowdfunding” platform. But many investors exploring crowdfunding and online alternative investments are looking for opportunities in real estate, and Roofstock is among several sites looking to make searching for and buying direct rental properties much more like ecommerce and crowdfunded investing.
Roofstock is an exclusive marketplace, which means that unlike some other sites pulling in rental properties from MLS listings, the homes for sale on Roofstock are not offered for sale elsewhere. The benefit to the investor is that it’s easy to browse and search for a rental property, and requires far less hands-on management then going out and finding, buying, and managing a rental property yourself, through you may be able to find a better deal by working directly with a broker or agent to find a property and/or managing the property yourself.
As of November 2011, Roofstock has added a new type of investment they call “Roofstock One”, which offers accredited investors a way to invest fractionally (and passively) in a portfolio of single-family rentals.
Types of investments Roofstock offers
Roofstock is an online marketplace for buying and selling single-family rental properties.
As of November 2021, Roofstock also offers fractional investments in a portfolio of single-family rentals through their Roofstock One offering, available to accredited investors.
What do you get when investing with Roofstock?
can help you locate and purchase rental properties, but if you choose to invest, you will be purchasing a physical property, not a security.
How does Roofstock make money?
Roofstock does not charge a fee to sign up and use the site. They collect a “Marketplace Fee” of 0.5% of the sale price when an investor initiates a purchase, and they collect 2.5% from the seller as a commission.
Potential returns and cashflow
The specific returns from any particular property will vary quite a bit on factors like maintenance expenses, rent amounts, and vacancy rates. Investability provides a number of useful calculators to analyze and model cash flow and return scenarios for each property.
Breadth of offerings on Roofstock
As of this writing, Roofstock showed about 500 properties available across the 15 markets they currently operate in. You can set filters and alerts (after creating an account) to be notified of new properties that become available that meet your particular criteria.
Regulatory framework
Because you’re purchasing an actual property, rather than a security, the transaction is not governed by SEC rules as with most of the investment crowdfunding and online alternative investment platforms we review. Instead, a purchase via Roofstock is subject to the particular laws of the state and county where the property is located.
While some other platforms offering rental properties provide a customized search on top of MLS listings, Roofstock takes a more curated approach, in particular offering a “certification” program for most of the properties listed. (A loose analogy woud be like the “certified” used cars offered by some dealerships.). From the Roofstock FAQ regarding their certification:
A Roofstock Certified Property is a property that has passed the Roofstock vetting and review process, which includes: (i) a property inspection conducted by an experienced property inspection firm, (ii) an estimate of the cost of major repairs necessary in the short and near term, (iii) preliminary title report with no uninsurable encumbrances or liens and preliminary title commitments where applicable, (iv) a valuation analysis of the property and market conditions in the local rental market, and (v) review and summary of the lease terms and payment history. Certification is completed prior to close of transaction.
There are also some properties offered that did not meet those certification criteria, and those are offered as part of the “Roofstock Rack” section of their offerings.
The Roofstock One offering is available to accredited investors through SEC Reg D.
This review was first published on 25 March 2017, and last updated on 11 November 2021.
Our Rating
ExcellentShare this review:
Other Investment Opportunities
Featured Reviews
EquityMultiple
EquityMultiple stands out among real estate crowdfunding investment platforms because their main investors and senior leadership come from institutional real estate finance, rather than being VC-funded. Seed funding for the company was provided by Mission Capital (later acquired by Marcus & Millichap) and their co-founders and board of advisors come from the New York real estate finance and law community. They offer fewer investments than some other platforms, but that’s a deliberate choice to take a more curatorial approach to dealflow. Overall, EquityMultiple is a solid choice for accredited investors looking for a hands-off way to invest in commercial real estate.
"Gain exclusive access to high-yield commercial real estate deals"
Read more
First National Realty Partners
First National Realty Partners (FNRP) is a commercial real estate private equity firm that focuses on grocery-anchored commercial shopping centers, offering both investments in individual properties and an Opportunity Fund across all of their offerings.
"First National Realty Partners (FNRP) is a rapidly growing commercial real estate private equity firm that owns and operates real estate throughout the United States. FNRP focuses on expanding its portfolio by acquiring market-dominant, well-located commercial assets well below replacement cost. "
Read more
Percent
Percent aggregates private-credit investments from a range of originators offering small-business, crypto, venture loans, litigation finance and more, including international debt investments. Low minimums.
"Percent unlocks exclusive private credit investments for your portfolio. Access select alternative investments on the platform powering the future of private markets."
Read more