If you’re looking for an online platform to help you invest in rental real estate, Roofstock is one of the websites you might’ve come across in one of your online searches.
Table of Contents
- What Is Roofstock?
- Investing in Rental Property: Roofstock vs Mashvisor
- Final Verdict: Is Roofstock Worth It?
In today’s real estate investing market, there is an abundance of online tools and platforms that specializes in helping specific types of investors or serving niche market demands. As the number of online platforms increases, however, it becomes more difficult to find trustworthy platforms that solve the problems facing investors today.
So, in this article, we will talk about Roofstock, the tools they have, and how they may help you on your journey to investing in rental property.
Read on to learn more about Roofstock and how it works for real estate investors.
What Is Roofstock?
Roofstock is an online real estate investment platform that facilitates buying and selling single-family homes. The Roofstock Marketplace is a core feature of the website that acts as an online shop.
On the marketplace, buyers can search for properties based on specific addresses or use filters to narrow down their search based on their investment criteria. Sellers and homeowners can also list their properties for sale on the marketplace. However, Roofstock charges a service fee once the property is sold.
How Does Roofstock Work?
One of the biggest advantages of using the Roofstock Marketplace is to get access to their property insights and analytical data. The property insights that are provided include:
- Cash Flow
- Cap Rate
- Cash on Cash
- Gross Yield
- Total Return
- Annual Return
It helps buyers find properties that suit their investment goals and show promising projected returns. Sellers, on the other hand, can list their properties to get them analyzed by Roofstock. The data that the platform provides on the property can help sellers find interested buyers more easily, especially if the rental property is performing well.
The marketplace, combined with the above analytics, is what attracts most investors to the platform. However, there are two additional features that Roofstock offers that make it unique from other platforms that you may find online.
Related: What Is a Good Cash on Cash Return?
While the Roofstock Marketplace allows buyers to choose from rental properties that they can purchase and own, Roofstock One acts more like a REIT (Real Estate Investment Trust). The tool allows you to invest as little as $5,000 in a single property or split your investment across multiple properties to diversify your portfolio.
Since it works like a REIT, other investors will be pitching in their own money, and each investor will be eligible for a portion of the profit depending on the amount they’ve invested.
Of course, Roofstock’s niche is the rental market, which means that the profits generated from rental properties you invest in will generate a passive income stream instead of a big lump of profit. Such a method of investing in rental property can eliminate lots of risks since you will be diversifying your portfolio and sharing the risks with other investors.
In addition, the tool allows you to customize your portfolio based on the cities and regions you want to invest in. It will also let you track the economic performance of the rental home that you’ve invested in.
Investors will also be required to pay a fee as a percentage of their profit, which Roofstock One uses to hire property managers for the rental properties being invested in.
In addition to the tools mentioned above, you can also use the Roofstock Academy to purchase an online real estate investment course. There are three options to choose from on the Roofstock Academy:
The Self-Study plan is the cheapest of the three, and it only gives you access to 50+ hours of exclusive lectures.
The Workshop plan is more expensive, but it includes other perks like one-on-one coaching sessions, as well as free marketplace credit.
The Mastermind plan, which is substantially more expensive than the previous two, offers more of the same benefits that the previous plan includes.
However, it is difficult to assess the lectures’ quality, especially when considering how expensive they are.
How Does Roofstock Make Money?
Here, we will look at the prices that Roofstock has for its different features. Like any other online business, Roofstock makes money in several different ways:
Roofstock Marketplace Fees
When it comes to the marketplace, both buyers and sellers need to pay a fee upon closing a deal using the platform.
For buyers, they must pay $500 or 0.50% of the sale price, whichever is greater. As for sellers, the fee is $2,500 or 3% of the sale price, whichever is greater.
Roofstock One Management Fees
In addition to the minimum investment requirement of $5,000, Roofstock One charges a fee of around 0.50% of the monthly profit in exchange for rental property management. The said fee, however, adjusts at the same rate as the gross rent of the property changes.
Since the fees are percentage-based and real estate investments involve large amounts of money, you should expect to pay a considerable amount when investing through the platform.
Roofstock Academy Sales
As mentioned above, the academy’s course plans are quite expensive.
The cheapest plan costs $39 per month (or $399 for the annual plan), while the more expensive one costs $99 per month (or $999 for the annual plan). However, the most expensive plan costs a staggering $5,000 for the annual plan (or $499 per month).
It’s worth mentioning, of course, that the second and third plans will provide you with marketplace fee credit ($1,000 and $2,500, respectively).
However, it means that you will need to invest a substantial amount of money in a property using the platform to take advantage of the fee credit from the marketplace. Additionally, the earned fee credit is only for the marketplace, so you can’t use it if you invest in Roofstock One.
Investing in Rental Property: Roofstock vs Mashvisor
Now that you’ve seen our Roofstock review, the best way to decide whether to use it or not is to compare it with its top alternative: Mashvisor.
If you’re interested in real estate investing and looking for rental properties in particular, then Mashvisor is a tool designed just for you.
What Is Mashvisor?
Mashvisor is a real estate investing platform that aims to help investors find lucrative traditional or short term rental property that they can purchase. With a focus on both types of rental properties, Mashvisor can help an investor determine the best rental strategy to use to make more money.
By comparing the performance of each property as both a traditional and an Airbnb rental, and based on data analytics, buyers can see what a property’s projected returns are before buying it.
How Does Mashvisor Work?
Mashvisor gathers data from multiple credible and up-to-date sources like the MLS for traditional rentals and Airbnb for short-term rental data. The data that we collect includes all the necessary information that our algorithm needs to calculate important metrics like the cap rate, cash on cash return, and the payback ratio for up to 10 years in the future.
After calculating the said metrics for tens of thousands of rental homes in each market, our machine-learning AI will then compare all properties in the market based on similarity and projected returns. The insights that we get allow us to provide nationwide market data on each city and neighborhood and run comparative analysis reports on-demand and across our tools.
Finding Rental Properties for Sale
Finding properties for rent that you can purchase and use as a source of passive income can be done in multiple ways. For this reason, Mashvisor offers two different tools to help investors find the home of their future investment:
1. Property Search Tool
Mashvisor’s Property Search tool is almost the typical search tool you will see on most platforms for investing in real estate. However, there are multiple unique features to the tool that you won’t find on most other platforms.
In addition to a map interface and a search bar for finding specific markets or addresses, the tool includes all the necessary filters for:
- Cash or Mortgage (and percentage of the mortgage)
- Cash on Cash Return
- Cap Rate
- Neighborhoods (if you’re searching at the city level)
- Rental Income
- Property Type
- Year Built
- Number of Bedrooms
- Number of Bathrooms
- Area (in Square Feet)
If that’s not enough, the map tool also includes a Heatmap feature that is helpful when searching at the city or neighborhood levels. The heatmap provides a quick visual indicator of how each area on the map performs on average, depending on the filter you’ve selected.
The real estate heatmap feature includes filters for:
- Listing Price
- Airbnb Cash on Cash Return
- Traditional Cash on Cash Return
- Airbnb Rental Income
- Traditional Rental Income
- Airbnb Occupancy Rate
2. Investment Property Marketplace
Mashvisor’s Marketplace is very similar to the Roofstock Marketplace in most aspects. Like Roofstock, Mashvisor allows sellers to list their rental property for sale on our marketplace. It means that buyers interested in off-market properties can find interested sellers and get in touch with them using our platform.
The marketplace allows you to search for properties based on your investment criteria in up to five different cities at once. After choosing the cities and the search radius around them, you can choose your budget (up to $5 million), your preferred rental strategy, and the type of property you’re interested in:
- Single-family resident
- Multifamily resident
Investment Property Calculator
In addition to helping investors when searching for a real estate investment, Mashvisor also provides the tools needed to analyze each rental property and predict its returns.
Unlike the tool offered by Roofstock, Mashvisor’s version is a customizable calculator that lets you modify the input, such as the costs and expenses or the mortgage details, to get the most accurate results relevant to your particular case.
The calculator will be pre-filled by default with values based on the market’s average one time costs and recurring expenses such as:
One-Time Startup Costs:
- Closing Costs
- Home Inspection
- Furniture and Appliances
- Home Repair
- Property Insurance
- Property Tax
- Property Management
- HOA Fees
- Rental Income Tax
However, you can edit any of the above values or add new ones if needed. Additionally, the mortgage calculator lets you choose the type of mortgage, amount, duration, and interest rate.
They will all be reflected immediately in the calculator’s results and will affect the cap rate and cash on cash return. It makes Mashvisor’s calculator superior to Roofstock’s analytics tool since it allows for more customization, making it a tool you actively use in your investment.
Do you want to use our real estate investment tools? Click here to sign up for a 7-day free trial of Mashvisor today, followed by 15% off for life.
Final Verdict: Is Roofstock Worth It?
So, after reading this Roofstock review, is it worth using the platform? The answer is: it depends.
If you’re looking to make a REIT-type investment, then Roofstock One is a great tool for doing so. The property management fee that you will be paying is worth the value when considering the outcome of a passive income stream.
However, when it comes to finding properties for rent that you can purchase and rent out for a profit, Mashvisor is simply a cheaper option that offers more data that you can use to your advantage.
As for the Roofstock Academy, I believe that it’s too expensive for what it offers, including the cheapest of their plans. It is because you can find information and guides about investing in real estate for free.
Mashvisor, for example, includes a library of thousands of real estate guides and reports that are available for free and that cover all sorts of topics related to investing in real estate.
So, if you’re a beginner real estate investor, I recommend that you start your journey with Mashvisor as a much cheaper option that can help you make a lucrative real estate investment. To learn more about Mashvisor’s tools and how they can help you, schedule a demo now.