What Roofstock competitors should you use in case you want a software solution to complement the platform?
Table of Contents
- What Is Roofstock?
- How Does Roofstock Work?
- Roofstock’s Features
- Top 3 Roofstock Competitors to Consider
- Which Platform Should You Work With?
Real estate is a numbers and data game. Savvy real estate investors are always looking to equip themselves with up-to-date data and reliable market trends. Real estate market and property analyses help investors put their money into profitable investment opportunities. A profitable opportunity refers to a property that matches your investment goals and search criteria while also offering you an excellent return on investment.
The process is a bit complex. Doing it manually would expose the analysis to inaccuracies and unreliability. You’d also need to spend a lot of your time and effort compiling the data, analyzing it, then organizing it into spreadsheets. It is a lot of trouble that you’d rather not go through.
As such, there are many real estate software solutions that help newbie and experienced investors access crucial data and also streamline their day-to-day tasks. One such software solution is Roofstock.
In today’s article, we look at what the platform is, Roofstock reviews, its features, how it benefits its users, and Roofstock competitors and alternatives.
What Is Roofstock?
Roofstock is an online real estate marketplace featuring hundreds of tenant-occupied rental properties. The platform mainly focuses on single-family homes. When we say “tenant-occupied rental properties,” we mean that for an investment property to be listed on the Roofstock marketplace, it must be occupied by tenants who satisfy Roofstock’s tenant screening guidelines.
Primarily, Roofstock’s founders viewed the home searching and buying process as inefficient. They, therefore, put their heads together and brought different skills to develop a tech solution with the main aim of making real estate investing accessible and affordable for ordinary investors.
Unlike some Roofstock competitors, Roofstock doesn’t own any of the properties listed on its marketplace. Instead, its focus is on helping evaluate, negotiate, and close real estate deals.
How Does Roofstock Work?
How can investors differentiate the platform from other Roofstock competitors? Since Roofstock works for both buyers and sellers, let’s split this section into two categories:
Roofstock for Buyers
Here is what Roofstock does for real estate buyers:
Helps Buyers Find Tenant-Occupied Rentals
What makes Roofstock marketplace stand out from other online real estate platforms is that the listed properties are already occupied by tenants. Essentially, most of the investors who list their properties on Roofstock are landlords who might want to walk away from investing.
It is special for buyers since they start earning from their investment immediately after they buy the property. You’re assured of a steady flow of income right from the start.
Many people may not understand why Roofstock sellers list property that’s already occupied. So, why would anyone walk away from an investment providing them a steady income?
The reasons may vary. In many cases, investors simply want to diversify their investment portfolios. In other cases, the investors want to walk away from the daily responsibilities of being a landlord.
Either way, it is a great investment opportunity for both newbie and experienced investors.
Certified Rental Property
Roofstock imposes stringent requirements and guidelines that ensure listed homes meet a certain standard to be listed on the service. Each investment property must be certified so that it can qualify for consideration.
How is property certified?
- The property must receive a comprehensive inspection by a professional home inspection business.
- The property is accurately evaluated, and any repair costs are estimated.
- The platform must receive proper property documentation, including a title report, floor plans, and quality property photos.
You can see that the platform holds listed properties to a high standard. Roofstock’s team works to ensure that only remarkable single-family rental properties are listed on its platform. They may even reject a property if they feel the owner’s selling price is unreasonably high.
If you’ve already made up your mind to invest in rental property, then you need to use Mashvisor’s Rental Property Calculator. It is an online tool that investors use to calculate a property’s profitability. You’re only required to enter basic details, such as the property’s buying price, funding option, and total cash investment, and the calculator will provide important return on investment metrics, such as cash flow, cash on cash return, and cap rate.
The best thing about Mashvisor’s tool is that it provides numbers for both traditional and short-term rental strategies. In such a way, you can settle on the most ideal rental strategy for your investment.
Roofstock for Sellers
Roofstock also allows property sellers to follow a streamlined selling process when selling their single-family rentals. Here’s the typical process:
- Listing submission. In the submission process, you need to answer some basic questions about your property and include high-quality property photos.
- Property certification. Roofstock’s team then goes through some paperwork in advance and also carries out due diligence on your property. While the process might seem intimidating, the main goal is to give interested buyers confidence to proceed with the purchase.
- Listing launch. Once a property’s met the certification guidelines, the listing will go live on the marketplace. The process takes between 15 and 31 days.
- Accept an offer. If a buyer makes an offer that interests you, you can accept it online. The deal can close within 30 days after signing the purchase and sale agreements.
As a real estate property seller, the Roofstock team handles the paperwork for you throughout the process. In such a way, you can take a backseat and enjoy a straightforward process that connects you to potential buyers.
Even better, you don’t need to evict your current tenants to prepare your property for the sale, as you would do in a traditional property sale setup.
Let’s take a closer look at some of Roofstock’s key features that set it apart from traditional real estate platforms and other Roofstock competitors.
If you want to invest passively in real estate, then Roofstock One is for you. The feature is only available for accredited real estate investors and allows them to invest in portfolios of single-family properties, instead of buying the entire home. In short, you buy property shares.
To become an accredited investor, you need to provide proof of a $200,000 annual gross income over the last one or two years. Alternatively, you can provide evidence of a combined income of $300,000 with your spouse over the same period. You’re also required to show that your current income level will continue.
To get started on Roofstock One, you must also provide a minimum investment capital of $5,000. Once you’ve purchased the property shares, Roofstock’s team takes care of everything from there. It includes the management of all properties that are in the Roofstock One portfolio.
It means that Roofstock One is an excellent opportunity for investors looking for a more hands-off investment approach. It’s also great if you’re looking for exposure to a wider variety of rental properties.
Perhaps the most notable downside of Roofstock One is its illiquidity. Currently, there’s no secondary market for Roofstock One’s property shares. You may need to hold on to your shares for longer once you decide to sell.
One of the hallmarks of any great business is educating its customers and teaching them the ropes. Roofstock’s done a good job at it.
Roofstock Academy is one of the company’s latest products. As the name suggests, it’s an educational program that teaches real estate investors how to grasp investing in turnkey investment properties. The program is created by experienced real estate investors who love sharing their experiences.
Other than learning how to invest in real estate, here are other important aspects of real estate you’ll learn from Roofstock Academy:
- Crucial real estate investment strategies
- Analyzing investment opportunities
- How to build a six-figure passive income
- Managing real estate investing risks
- Negotiating and submitting a winning offer
- Selecting a good property manager
- Selecting the best place to buy rental property
This program is special since it combines online coaching with one-on-one learning sessions. You also get access to a private network of other great real estate investors.
Top 3 Roofstock Competitors to Consider
Based on our Roofstock review and after seeing what it offers to its users, it’s now time to look at a few Roofstock competitors and alternative platforms for you to consider.
It’s common for most investors to search for Roofstock vs Fundrise when looking for alternative platforms. The two platforms are quite similar when it comes to making it easier for real estate investors to invest in income-generating real estate.
Fundrise is a real estate platform that offers investors a crowdfunding approach. Investors on the platform pool their resources to invest in residential homes and private commercial properties. The main investment products on the Fundrise platform are:
- eREITs. Fundrise eREITs are in the public non-traded category of Real Estate Investment Trust (REIT). In this category, real estate investors put their money in debt and equity opportunities that align with the particular eREIT goal. The goal can be consistent income or long-term growth.
- eFUNDs. Fundrise eFUNDs allow investors to directly invest in an assorted portfolio of listed properties in high-growth neighborhoods in major metro areas in the US.
Investors can purchase eREIT and eFUND shares by buying Starter, Balances Investing, Supplemental Income, or Long-Term Growth Fundrise portfolios.
Compared to other Roofstock competitors, Fundrise can be quite expensive. The platform charges a management fee of 0.85% for managing its eREITs, eFUNDs, and funds. The fee is charged annually. In addition, there’s a 0.15% annual advisory fee charged to manage the account.
In addition, Fundrise can also charge other fees such as liquidation fees and development fees. The fees are charged for work on specific projects. If you redeem your investment before the specific timelines, you’ll pay a redemption fee of up to 3%.
Fundrise Pros and Cons
To invest with Fundrise, you don’t need to be an accredited investor. It’s also affordable since the minimum investment is $500. If you invest a higher account, you’re provided with many eREITs to choose from.
On the other hand, the fees can be higher than mutual fund investments or traditional low-cost ETFs. You must also invest at least $1,000 before you can choose which eREIT you want to invest in.
RealtyMogul is a real estate platform that focuses on commercial real estate. It allows you to invest in one of two ways:
- You can invest in individual property offerings if you’re an accredited investor; or
- If you’re not accredited, you can invest in RealtyMogul’s REIT options.
RealtyMogul’s fees are based on the investment option you choose. For example, if you’re an accredited investor and choose individual property offerings, the fees are included in the property details. If you aren’t accredited and want to invest in the platform’s REITs, the fees are included in the REIT’s description.
RealtyMogul Pros and Cons
Here are some of the advantages of investing with RealtyMogul:
- There’s an option to invest in individual properties for accredited investors.
- Non-accredited investors aren’t locked out since they can invest in REIT offerings.
- RealtyMogul’s team reviews each investment before it’s offered on the platform.
As for the drawbacks, you need to invest at least $5,000 in the platform. Also, non-accredited investors are limited to REITs since they can’t access individual properties. The costs can also be higher than other ETF investing options and traditional low-cost mutual funds.
Homeunion is another online real estate marketplace that’s similar to Roofstock in very many ways. However, there are a few key differences to consider.
Humeunion’s technology recommends listed properties and portfolios that align with your investment goals and financial preferences. On top of recommending ideal properties for you, the platform also helps you choose the best financing option, and also purchase the property on your behalf.
Unlike Roofstock, the properties listed on Homeunion aren’t occupied by tenants. However, their team markets the property on your behalf and finds tenants for you. They can also manage the property for a fraction of your monthly rental collections.
Homeunion Pros and Cons
The main benefit of Homeunion is that you can do everything from finding a property to managing it all under one roof. The platform is also open to all investors and provides them with comprehensive property research.
On the downside, you must create an account on the website to browse the properties, which are also not available in all areas. As for the cost, you’ll need to part with a 3.5% acquisition fee and 10.5% of the total monthly rent for rental property management.
Which Platform Should You Work With?
Roofstock and Roofstock competitors all bring different values to the table. They’re all different in unique ways. Consider your needs and your budget. Remember, they’re all available at different levels and at different costs. Also, determine whether you’re willing to be involved in your rental property management.
Mashvisor’s platform offers various online real estate tools that you can use for your business. Schedule a demo to learn more about what our tools can do for your business.