Investing > Roofstock Review

Roofstock Review

Looking to buy a turnkey rental property without the hassle? Roofstock might be just for you.

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Reviewed by
Updated January 10, 2022

All reviews, research, news and assessments of any kind on The Tokenist are compiled using a strict editorial review process by our editorial team. Neither our writers nor our editors receive direct compensation of any kind to publish information on tokenist.com. Our company, Tokenist Media LLC, is community supported and may receive a small commission when you purchase products or services through links on our website. Click here for a full list of our partners and an in-depth explanation on how we get paid.

Checking out your options for investing in real estate? There really is so much to consider.

Apart from the high fees, buying into rental property typically comes with a lot of responsibility and maintenance, making it anything but a passive investment.

Well, turnkey rental property Roofstock has changed all that by providing a transparent and innovative marketplace in the single-family rental investment space. 

And it continues to be an investor favorite. After only 3 years on the market, Roofstock had already surpassed an impressive $2 billion transactions and since, it has been recognized as the fintech to watch for in 2020.

In this review, we take a look at what exactly Roofstock is, if it’s legit, the platform’s rock-solid certification process, how much ROI you can expect over a 10 year period, and more.

Ready? Let’s jump in.

Roofstock is a marketplace where real-estate investors can buy a single-family home with tenants, ensuring a cash-flow from the very start. All properties are screened and certified so investors know exactly what they are buying into.

Fast Facts

  • Fees: 0.5% purchase fee (one time)
  • Best for: Beginners or budget conscious investors
  • Investor eligibility: Open to non-accredited investors
  • Highlight: Offerings in over 25 markets

Ratings

  • Commissions & Fees: 8.5/10
  • Customer Service: 8.5/10
  • Ease of Use: 8.5/10
  • Diversification: 8.0/10
  • Amount of Deals: 8.5/10
  • Due Diligence: 8.0/10
  • Overall: 8.0/10
Visit Roofstock on Roofstock’s website

What is Roofstock?

Roofstock is a turnkey rental property platform, founded as recent as 2015. The company offers investors a marketplace to buy and sell single-family rental properties. 

The individual investments offered are unique and are a far cry from typical crowdfunded models. Roofstock investors are buying into entire homes with single family tenants to rent on a per month basis.

Roofstock's journey

This is a more accessible, easier path to real estate. Roofstock users can choose from a huge range of properties in the marketplace, finance it or buy it cash in hand, get the title of the property, hire a property manager to look after all the property maintenance and tenanting (or manage it themselves — their choice).

The Roofstock marketplace allows you to buy and/or sell properties with current tenants that will offer an immediate cash flow once the deal is closed. 

This platform is ideal for those with a budget. It’s free to join and look through the properties, and it’s differentiated from most other crowdfunding platforms in that non-accredited investors are welcome.

Investors can easily set up search parameters to help filter and find the deal you’re after. And Roofstock’s massive range of over 70 markets is sure to produce the results you’re looking for. 

Roofstock Property Marketplace
A snapshot of the Roofstock property page

In addition, the platform launched Roofstock One, (for accredited investors only). With Roofstock One, you can buy shares in rental homes that are already fully managed. The shares offered represent 1/10th of the home’s equity.

Investors pay the company’s asset management fee in exchange for a mirroring of the economics of direct ownership, including tax benefits, rental income, and appreciation, without the hassle or responsibilities that come with being a landlord.

Once you own the property for 6 months, Roofstock offers owners liquidity options. For example, investors will have the option to convert traditional ownership and possibly even sell shares back to the company.

Roofstock Overview and Summary

A quick summary of what you need to know about Roofstock:

  1. Roofstock is a turnkey rental property platform, founded as recent as 2015. 
  2. In December 2019, the company successfully surpassed $2 billion in transactions, doubling its investor base.
  3. Roofstock has two key competitors: Fundrise, an online, crowdsourcing platform, and Peerstreet, a real estate investment platform, specializing in short term investments.
  4. Roofstock aims to give you the most information on the property possible to help you make a confident decision.
  5. Roofstock carries a one year guarantee for those who buy a home and work with a rent-guarantee eligible manager.
  6. A critical component of the Roofstock Certification process is its Full Property Analysis.
  7. The majority of properties on Roofstock are projected to have a cap rate of between 5% and 8% along with a gross return of between 11% to 12%, net of expenses.

Raising the Roof: The Roofstock Journey

Long time investor and founder of multiple investment firms Gregor Watson joined forces with techie, Gary Beasley (Not to mention the CEO and Founder of Roofstock) to rethink property buying and selling. Soon they invited Rich Ford to the conversation. 

Rich had over 20 years of M&A and capital raising experience and soon their combined experience resulted in the building of the Roofstock marketplace. There, investors can invest in real estate as easily as they can invest in stocks.

Just one year on from its launch in 2016, the company surpassed $1 billion in transactions and by December 2019, the company had successfully surpassed $2 billion in transactions, doubling its investor base of newbies

There was also significant growth on the supply side as the company grew the number of sellers on its marketplace by 10x from 2018.

Bain Capital Ventures’ Matt Harris had this to say about the Roofstock journey: 

“Roofstock’s incredible growth can be attributed to its rockstar employees, dynamic leadership team and a unifying vision to make the benefits of real estate investing available to everyone. Roofstock is leading the transformation of this industry, using technology to create a platform that offers more access, more opportunity and a better experience than anything previously available.”

Since, the company has been announced as a Fintech to watch in 2020, and has secured prominent award wins including a spot on the coveted Forbes Fintech 50 list. This success has enabled the platform to invest further in more hires, product release and awards that put it in a key position for long term success.

Pros

  • Access to a wide range of markets
  • Massive deal flow
  • 30 day satisfaction guarantee
  • Immediate cash flow
  • 100% property ownership. 
  • Cost-efficient way to buy real estate.
  • Speedy closing time 

Cons

  • High amount of deal flow could potentially make the platform riskier. 
  • No mobile app

Roofstock’s Huge Property Selection

Since its launch, Roofstock has grown its inventory immensely. Today, Roofstock offers over 450 properties for sale. 

Sample Roofstock Property Selection
One of Roofstock’s ample selection of properties

This is a significant number in comparison to some other turnkey places that offer little to no inventory, making you wait and often making you feel compelled to accept what you’re given once you get an offer. It’s not a nice experience, believe us.

However, the value of Roofstock is not in the size of its inventory. The value is in their pricing, categorization, and impartialness.

$3 Trillion Single-Family Rental Market

Roofstock currently has properties in 25 markets, with a serious expansion rate. Most, of course, are single-family homes.

Roofstock Coverage
Roofstock has a growing range of properties across 25 markets

Who Are Roofstock’s Competitors?

Roofstock has two key competitors: Fundrise, an online, crowdsourcing platform, and Peerstreet, a real estate investment platform, specializing in short term investments. Here are the back-to-back, raw stats for all 3 platforms.

DescriptionRoofstockFundrisePeerStreet
Minimum Investment$0$500$1,000
Management Fees0.5% one-time purchase fee1% a year1%-4%
Investment TypeSingle family rental propertieseREITsReal estate debt
Investment ModelTurnkeyCrowdfundedOnline
Mobile AppNoYesNo
Accredited Investor RequirementNoNoYes

Which Is Better: Roofstock or Fundrise?

As we can see from the quick-fire facts above, Fundrise and Roofstock offer investors different benefits, depending on what your individual goals are. As an online crowdsourcing platform, Fundrise specializes in eREITs. Roofstock, on the other hand, is a turnkey rental property platform focusing on single-family real estate rentals.

We’ve also done a back-to-back comparison of Fundrise vs Betterment that you can check out to help give you a better picture of the competitive landscape.

Is Roofstock Legit?

In December 2019, Roofstock reported its facilitation of over $2 billion transactions in the marketplace. One year later, in January 2020, Roofstock closed a $50 million series D funding round. This brought the total amount of equity to $133 million.

The ownership of rental real estate generally provides the opportunity to make money in one of two way:

  • Rent provides a monthly income
  • Market price appreciation of the property. This is realised once the property is sold.

Many of Roofstock’s offerings predict a cap rate of 6% to 10%.

Roofstock provides an in depth analysis on all listings.
Roofstock provides an in depth analysis on all listings

It’s more or less impossible to try and determine what investors are earning from market appreciation but so long as you select your property carefully, it should go up at a similar rate to inflation. This will vary between markets, of course.

Roofstock Compared

Account Info
Minimum investment

N/A

$5,000

Fees

0.5%
(set up fee)

0.5% – 1%

Advertised returns

11% – 12%

14% – 20% (Equity)
10% – 14% (Preferred Equity)

Investment length

N/A

1-5 years depends on investment types

General
Best for

Budget conscious investors looking to break into rental property ownership

Accredited investors looking for high-quality, long-term deals

Restricted to accredited investors?
Account Info
Minimum investment

$5,000

$25,000

Fees

0.5% – 1%

No fees for investors
(0.5% – 2.5% for sponsors)

Advertised returns

14% – 20% (Equity)
10% – 14% (Preferred Equity)

7.6% – 23%

Investment length

1-5 years depends on investment types

2-10 years

General
Best for

Accredited investors looking for high-quality, long-term deals

Accredited investors looking for long-term investments

Restricted to accredited investors?
Account Info

Minimum investment

N/A

$5,000

$25,000

Fees

0.5%
(set up fee)

0.5% – 1%

No fees for investors
(0.5% – 2.5% for sponsors)

Advertised returns

11% – 12%

14% – 20% (Equity)
10% – 14% (Preferred Equity)

7.6% – 23%

Investment length

N/A

1-5 years depends on investment types

2-10 years

General

Best for

Budget conscious investors looking to break into rental property ownership

Accredited investors looking for high-quality, long-term deals

Accredited investors looking for long-term investments

Restricted to accredited investors?

🏡 Curious to see other real estate investment options? See our top real estate crowdfunding sites.

How Does Roofstock’s Certification Process Work?

Putting your time and money into a property on the far side of the country is a big step and requires a lot of trust in those involved. Roofstock recognizes this, wholeheartedly.

To help ease any potential doubt that might come with your purchase, Roofstock aims to give you the most information on the property possible to help you make a confident decision. This information, in addition to its quality standards, combine to create the Roofstock Certification.

Requirements for the Property Certification

Roofstock Investment Property Details
Roofstock provides all the details need to help investors make a sound decision

Property’s will only become Roofstock certified once they pass the following list of requirements: 

  • Property is valued and a rental market analysis is conducted to ensure property prices are reasonable.
  • Property is inspected by an experienced national inspection firm.
  • An estimation is given for the cost of any and all repairs, as well as a bid from the local vendor to finalize the work at the quoted price.
  • A title report with no liens or uninsurable encumbrances and preliminary title commitments, where applicable. 
  • A full review and summary of the concerned tenant to make sure that rent is up to date and consistent, as well as meeting all credit qualifications and background checks.
  • A full review and summary of the terms of least to confirm the lease is in line with market standards, and crucial terms disclosed, including monthly rent, term, and utility responsibility.
  • Home disclosure reports summarizing any and all potential local risks including local crime rates and natural hazards.
  • Certified and Roofstock vetted property managers, all of who are experienced in their given area.
  • Roofstock 3D Virtual Tour of the property. This lets interested inventors take a virtual tour of the property and offers a unique tool for releasing it.
  • Professional marketing photos of the property and a professional property floor plan.

Guaranteed Rent on Selected Roofstock Properties

Roofstock carries a one year rent guarantee for those who buy a home and work with a rent-guarantee eligible manager.

Roofstock pay’s those who meet the terms and conditions an amount equal to 75% of the estimated market rent which started 45 days after the property was rent ready. This removes a huge amount of risk from buyers.

Full Property Analysis

A critical component of the Roofstock Certification process is its Full Property Analysis. This is made up of three parts. These are:

  1. Pricing Appraisal
  2. Title Report
  3. The Inspection Report

The first two listed are pretty clear-cut and support the listing price. The inspection, however, is where the fireworks happen. This is an essential part of the final walk through.

Roofstock’s Inspection Report

The inspection report is an extremely thorough, detailed report on all major aspects of the property.

Here’s what the first page looks like:

Roofstock Property Inspection
A Summary of Evaluation results 

This report is usually around 12-15 pages and delves into some deep information on all areas on the summary above. In it you’ll find pictures and descriptions, where required.

The aim of this is to inform interested investors on the exact state of the property before it’s bought. This is a notable part of the Roofstock 30-day money-back guarantee.

Roofstock doesn’t want investors to uncover any surprises post-purchase. The platform profits when its users profit.

🏘 Interested in peer-to-peer real estate investing? Check out our in-depth PeerStreet review.

What’s the Roofstock 30-Day Satisfaction Guarantee?

As soon as you sign up to Roofstock you can look at properties and buy a home that you will have direct ownership over.

The Roofstock 30-day satisfaction guarantee allows investors who are unsatisfied with a property to notify them in writing within 30 days.

The platform will then re-list the property and you will not be charged anything. Roofstock will repurchase the property itself if it is not sold within 90 days.

Roofstock Self-Directed IRA

Those looking to boost their retirement savings can utilize Roofstock’s Self-Directed IRA program.

Roofstock’s IRA service enables investors to put your real estate earnings to a tax-deferred retirement account. The biggest benefit to this is that it protects your money from income taxes on rental income earned from Roofstock properties. Just be aware of the IRA contribution limits for 2019 and 2020.

Looking to save for retirement? Check out our report of the best brokers for IRA accounts.

Roofstock One

Roofstock One was launched in February 2019 and allows accredited investors to purchase shares in properties. One share equals 1/10th of the home’s equity. 

Roofstock One Page Screenshot
Roofstock One allows accredited investors purchase property shares

With this, investors will receive economic rights in the property including rental income. Roofstock will look after all of the management and maintenance aspects, leaving you free as a bird to collect some passive income. 

Roofstock will take 10% or more ownership interest per property for year one, which should help ease any worries.

After an initial 6 months holding period, investors can redeem shares or alternatively, move to a traditional ownership model (once you own 90% or more in shares).

To take part in Roofstock One, there is a minimum investment of $5,000. Keep in mind, this buys you a minimum of 1/10th of a property.

Owning shares in a variety of Roofstock One properties will help diversify your portfolio, potentially creating stronger, and potentially more lucrative estate holdings.

Am I Eligible to Invest in Roofstock?

Luckily, Roofstock accepts non-accredited investors. This doesn’t mean that you’re exempt from doing extensive due diligence and independently checking out all projections on Roofstock offerings.

Accredited investors have the option of investing in Roofstock One. Those interested in gaining a better understanding of how to deal with everything that comes along with buying, selling and closing, especially in a pandemic, can check out the Roofstock Academy.

What Is the Minimum Investment With Roofstock?

Essentially, the minimum investment will be the price you pay for the house, unless you need to finance the purchase. For loans, lenders generally ask investors to put down a minimum of 20% of the purchase price. There will also be closing costs which generally run at about 4% to 5% of the purchase price. 

That is, a property costing $80,000 will require a minimum investment of about $20,000. 

On the other hand, Roofstock One requires a minimum of 1/10th of the price of the house. A house costing 50,000 would need a $5,000 minimum investment, for example.

💡 Helpful tip: To minimize costs and get an edge on capital gains, it is imperative to learn what tax loss harvesting is, and how it works.

What Are Roofstock Fees?

When it comes to investing your money, you don’t want to be ripped off with fees and pricing.

Roofstock Fees
Roofstock offers investors a quality platform with reasonable fees.

Roofstock takes the lead on its competitors by not only offering a quality platform that is easy to navigate, but meeting users half way by also charging reasonable fees. Here’s the detail:

Firstly, it’s free to set up an account or, indeed, to put in an offer. Should your offer be accepted, you will be required to pay a marketplace fee of $500 or 0.5% of the contract, whichever is higher. 

For example, a home priced at $100,000 will be charged a fee of $500.This is the fee on the buyer’s side.

Property management, closing costs, HOA, maintenance, and other additional costs are property specific.

With Roofstock One, investors will be charged an asset management fee. Initially, this is set at 0.5% of the home price or an interest price that is calculated each year, divided and charged per quarter. 

For example, a home costing $100,000 will be required to pay an asset management fee of 0.5% x $100,000 = 500 per year / 4 = $125.

Any changes to the price in gross will also result in changes to the fee, and could change at the discretion of the manager, just like the property management fee.

The reason Roofstock can charge lower fees than traditional real estate agencies is because of its use of technology. The platform uses technology to couple interested buyers with sellers efficiently. This creates a more streamlined process which results in a trickle down of overall lower expenses.

How Does Roofstock Make Money?

Now that we’ve established how Roofstock can afford to charge lower fees than traditionally high fee real estate companies, let’s talk about how they actually make money. 

The platform makes money through each transaction. It also charges a 2.5% to sellers, and 0.5% to buyers.

What Kind of Return Can I Expect With Roofstock?

The majority of properties on Roofstock are projected to have a cap rate of between 5% and 8% along with a gross return of between 11% to 12%, net of expenses. Projected appreciation is listed alongside the properties, too. 

In addition, potential investors will be able to view a neighborhood score and some details on historical and projected trends.

Average Return on RoofStock

Wondering how much exactly you would be projected to earn if you invest in a Roofstock property? 

If you were to invest in a property of between $80,000 you would pay a minimum investment of about $20,000. Assuming a gross return of 12%, we have calculated what your average return on Roofstock would be over a 10 year period.

YearInvestment AmountROITotal
1$20,000$2,400$22,400
3$25,088$3,010.56$28,098.56
5$31,470.39$3,776.45$35,246.84
10$55.461.59$6,655.39$62,116.98

On-The-Go Investing: Does Roofstock Have a Mobile App?

Roofstock does fall short in the area of real estate mobile investing because of its lack of an app. That said, while it doesn’t provide an app, its website is mobile optimized, at least. This ensures users will have access to all the information and functions needed to carry out their task.

Users can put in an offer, move a transaction forward through the online signature process, and close the transaction on any mobile device.

Interested in mobile investing? See our report of the top investment apps.

Roofstock Risks: Is Roofstock Safe?

Due to the fact that Roofstock offers a 30-day satisfaction guarantee, there is reduced risk involved. Granted, you might need to pay some costs with this, but having the opportunity to get a refund in the real estate industry is pretty much unheard of!

Were you to buy a home the traditional way you would certainly not have this opportunity. Properties on Roofstock all have preliminary insurance quotes but you can get a policy from another insurer too, if you like.

In line with the position that Roofstock sells properties that offer immediate cash flow, the company also guarantees an income on properties that do not have tenants at the time of sale.

Were Roofstock to file for bankruptcy, it would not affect investor’s ownership interests in the properties they’ve previously bought on the marketplace. New buys might be impacted while the company transitions to a third party.

How COVID-19 Has Impacted Real Estate

With the crushing effects of COVID-19 being felt all around the world, real estate companies are feeling its wrath in different ways, mostly dependent on asset class and region.

In the near-term, executives in real estate are worried about maintaining its liquidity and value, keeping tenants and visitors from harm, including increasing cleaning, and staying in line with governmental requirements. 

Practical Next Steps

A Deloitte report on understanding the impact of COVID-19 suggests that leaders in real estate will be defined by their actions and how they manage the crisis; respond, recover and thrive. It highlights some items including;

  • Prioritizing the safety and well-being of people and tenants
  • Short-term liquidity needs
  • Remote working considerations, including location and access to information/data, cyber IT infrastructure complaints, and financial reporting processes and internal complaints.

Summary: Is Roofstock a Good Investment?

Similarly to crowdfunding platforms like Fundrise, Roofstock offers a marketplace where interested investors can look at and buy rental homes with an enticing cash flow potential, and sellers can put homes on the market to attract potential investors.

The availability and opportunity with single-family rental properties makes it easy to buy and build a diverse portfolio of cash-flowing homes. 

After launching only 3 years ago, Roofstock has since been funded with $133 million in venture capital, finalised its first transaction in March 2016 and brands itself as a marketplace “created by investors for investors.”

With each property, users can utilize the research, analytics, and insights that enables them to thoroughly asset and buy independently certified properties. 

Use the search filter to easily find certified investment properties that match your needs, whether you’re looking for a specific price, location, neighborhood rating, gross yield, estimated annual appreciation, funding type, or other criteria. 

Once you are Roofstock registered, you can save the custom filters so you don’t need to waste time doing it every time.

A key aspect of buying and owning a rental property is managing the property. This includes placing tenants and managing the tenant turnover, screening, collecting rent, and taking care of maintenance issues. 

If this isn’t thoughtfully looked after, it can cost more time and money than anticipated. Investors can access. Roofstock provides “preferred property managers” who’ve been screened, but the investor themselves decides how they want the property to be managed after closing. 

The location is the huge factor to take into consideration and it will determine how reliable your monthly income will be. For this, Roofstock offers information on the local area. 

Then, if you want to do some more digging on neighborhood ratings, crime rates, schools, job availability, commuting experience, and other things that matter to tenants when choosing a rent property.

Roofstock FAQs

  • What Can I Invest in With Roofstock?

    With Roofstock, you can invest in real estate, focusing on single-family rental properties. There is a wide range of properties available to purchase, and there is potential for a good ROI if you rent them.

  • What Is the 2% Rule in Real Estate?

    In real estate, the 25 rule states that potential investors or those looking to buy a property should aim for one that can be rented at 2% of the total cost. For example, if the property costs $50,000, all in, and it can be rented for $1,000 per month, you will have an income that is 2% of the total cost.

  • How Does Crowdfunding Real Estate Work?

    Real estate crowdfunding uses the power of social media to connect investors with property investments. Real estate crowdfunding is similar to equity investing since investors can purchase properties and become shareholders. This offers companies access to capital that they may have never been able to raise otherwise.

  • What Does Being Sold Turnkey Mean?

    Seeing or hearing the word turnkey refers to something that is ready to be used right away, typically in the sale or supply or goods or services. In terms of real-estate investing, it means that the property is ready to be rented immediately.

  • Are Turnkey Properties Worth It?

    The real question is, are turnkey properties all they’re made out to be? Honestly, there are better deals out there. 

    But if you’re really looking for a passive investment, want to avoid as much hassle and work as possible, and are happy to release control of the process, turnkey real estate is a good option.

  • Is It Smart to Invest in Real Estate Right Now?

    Although uncertainties loom on the current economic crisis as a result of the coronavirus, real estate investing is still an attractive investment consideration, partly because of its historically low rates. 

    Just keep in mind that much of the value of real estate investing comes from long term results, buying a property and growing your investment over time. Those looking to make profit in the short-term will be disappointed.

    If short term is your goal, why not check out our guide on stocks, and how they differ from both bonds and mutual funds.

Roofstock and the Competition

See how Roofstock compares to the top real estate investing platforms by reading one of the reviews below.

All reviews, research, news and assessments of any kind on The Tokenist are compiled using a strict editorial review process by our editorial team. Neither our writers nor our editors receive direct compensation of any kind to publish information on tokenist.com. Our company, Tokenist Media LLC, is community supported and may receive a small commission when you purchase products or services through links on our website. Click here for a full list of our partners and an in-depth explanation on how we get paid.

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