Roofstock is an online marketplace that provides investors with opportunities to invest in single-family rental homes with great cash flow potential. Roofstock differentiates itself from competitors by offering already-occupied homes, so investors can start earning a return as soon as they close on a Roofstock property. Additionally, Roofstock doesn’t own the properties. Instead, they evaluate, negotiate, and close the transactions on behalf of the investor. This effectively removes the hard work involved in real estate investing, providing investors with a much easier path toward owning a rental property.
How you make money
Roofstock sells homes with tenants already in them. Investors purchase these properties and have a steady flow of income right from the start. Returns are earned from the rental cash flow on your investment properties and any appreciation in the property value when it’s sold. If you decide not to self manage, a Property Manager can be appointed to collect rents, pay expenses and remit the net income to each investor.
How Roofstock makes money
Roofstock charges investors a marketplace fee of 0.5% of the contract price. The seller pays a 3% broker commission and a 2.5% all-in-seller fee. For investors looking for a hands-off investment, Roofstock offers a property management solution for an 8% to 10% management fee, however, investors have the option to manage the property themselves and save on property management fees.
Is it safe?
They offer an industry-leading guarantee that allows you to invest with confidence, regardless of whether the home is leased or vacant.
- 30-Day Money Back: If you are not satisfied with your purchase, contact them within 30 days of closing and they’ll start the refund process.
- Lease Up Guarantee: Buy a vacant home with confidence. They guarantee that you’ll secure a signed lease on your rent-ready home within 45 days, or they will cover rent for up to a year. You must work with a Lease Up Guarantee-eligible Preferred Property Manager and the home must have passed a Roofstock-approved inspection prior to closing. Plus, you pay no monthly management fees until your property is leased.
Owning a rental property requires work, and it can come with its own obstacles. 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. Rental property is highly illiquid, and it can be much easier to buy than to sell. And unlike investing in a REIT or loaning money on a real estate crowdfunding platform for a specified term, you're buying a home on Roofstock.