Real Estate Investment Analysis and Insights

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Roofstock is one of the best real estate investing apps for active investors who want to buy and sell actual properties. Jennifer Streaks, Senior Personal Finance Reporter & Spokesperson

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About Roofstock

Roofstock is an online real estate platform that lets you buy or sell rental properties (these properties usually already have tenants). If you choose the buying route, Roofstock allows you to finance properties or pay with cash. It also matches you with a vetted property manager that handles the day-to-day responsibilities of your property.

It exclusively offers single-family real estate properties for a $0 minimum. Average annual return range from 6% to 20% depending on the specific properties. The company also has an option — Roofstock One – for accredited investors interested in more of a passive approach to real estate investing, but you’ll need at least $5,000 to get started.

Roofstock offers a handful of financial tools and services, including a financial analysis calculator, a proprietary neighborhood rating system, an online accounting feature, and more. One of the platform’s best features is the Open House feature, which allows you to look at properties that haven’t yet been listed. The 24-hour window then allows buyers to make an offer at, above, or below the open house price. 

And if for some reason you buy a property and later decide that you’re not satisfied with your purchase, Roofstock provides a refund if you notify them within 30 days of buying the rental.

Is Roofstock Right For You?

Roofstock is best for active investors interested in collecting regular rental income by purchasing single-family rental properties. Both accredited and nonaccredited investors can utilize the platform.

Unlike Fundrise or DiversyFund, which offers real estate assets suitable for passive investors (REITs), Roofstock lets you invest in actual properties. Only passive, accredited investors who are willing to pay the high $5,000 minimum for a Roofstock One account should consider Rooftstock.

Real estate investments are generally illiquid and are best as long-term investments. Only folks willing to play the long game for better returns should invest in real estate. 

Roofstock: Overall Rating

Roofstock Pros and Cons

The Better Business Bureau has given Roofstock a C rating. The BBB rates companies using a grade range of A+ to F. In addition to customer complaint history, the bureau also considers a company’s time in business, advertising issues, and licensing and government actions.

The BBB lists the reason for Roofstock’s C rating being three complaints filed against the business, with one failure to respond.

It’s important to note that the BBB’s ratings don’t necessarily indicate that a company will be reliable or perform well. Since the bureau mainly looks at customer interaction data, it’s best to do your own research as well. This may include talking with friends and family that have used Roofstock or reading customer reviews on the business. 

Roofstock hasn’t acquired any major lawsuits since its founding. 

Ways to Invest with Roofstock

Basic Investment Account

If you’re a buyer, you’ll have three options:

• Invest in a property
• Invest in a portfolio of multiple properties
• Bring your own property

Whether you’re investing in a single rental property or multiple properties, Roofstock displays a series of real estate rentals in different cities and states. Each portfolio lists things like total price, cap rate, average monthly rent, net operating income, locations, and more.

The “bring your own property” account option allows you to submit the address of a rental property that isn’t listed on Roofstock’s marketplace. Roofstock will screen the property, and if it’s approved, Roofstock will pair you with a local real estate agent who can guide you through the entire process.

The platform will also give you a better idea of the properties’ surrounding areas by providing neighborhood ratings and school ratings. In addition, its 1031 exchange services offer investors tax perks when they reinvest returns in new properties of equal or higher value.

Roofstock One

In 2019 Roofstock launched Roofstock One to offer managed investments for passive, accredited investors (accredited investors are generally individuals with a net worth of $1 million or an annual income of $200,000). 

The account lets you purchase a 1/10th shares of single-family rental properties while Roofstock managed everything for you. 

For a $5,000 minimum, you’ll get access to professional in-house property and asset management. In addition, Roofstock One gives customers multiple liquidity options once the initial six-month holding period ends. Investors also get the option to sell their home interests to another accredited investor or redeem shares when fractional interests fell below 90%. 

Retirement Savings Accounts

You can also invest in real estate offerings if you have a self-directed IRA or solo 401(k). In other words, Roofstock’s self-directed IRAs actually allow you to purchase rental properties and assign your IRA as the title holder.

To take advantage of this offering, you’ll need to open an IRA account with New Direction Trust Company. You can roll over or transfer plans if you have an existing IRA or employer-sponsored plan retirement plan. 

Once you’ve set up your account, you maintain the tax perks of your IRA while using it to choose one, or multiple, investment properties. If you have any other questions, Roofstock offers an IRA investing transaction guide, a real estate investment guide, and a real estate owners guide.

Investment Options

Roofstock only offers single-family real estate properties in markets from the following US states: Alabama, Arizona, Arkansas, California, Delaware, Flordia, Georgia, Illinois, Indiana, Kansas, Kentucky, Michigan, Minnesota, Mississippi, Missouri, Nevada, New Jersey, New York, North Carolina, Ohio, Oklahoma, Pennslyvania, South Carolina, Tenessee, Texas, Virginia, and Wisconsin. 

Residents of states not listed above can still open a Rooftstock account. You just can’t list properties to sell or buy from unlisted states. 

Roofstock Fees

Roofstock currently offers investment properties in roughly 27 states. While there’s no account minimum to get started, Roofstock charges $500 or 0.5% (whichever is higher) of the contract price for offers on properties. Down payments and fees will also vary per rental, but the process for buying a property is different than that for selling one. 

Folks selling on Roofstock are charged 3% or $2,500 (whichever is greater) of the sale price. 

Roofstock One accounts require a $5,000 minimum to open an account. 

Roofstock Frequently Asked Questions (FAQs)

Compare Roofstock

Roofstock vs. Crowdstreet

Roofstock and CrowdStreet are both real estate investing platforms, but they offer different investment options, fees, and investment minimums. 

Roofstock is a lower-cost option with no minimum to start investing and only requires a $5,000 minimum to access the Roofstock One account option. Plus, it’s available to both accredited and nonaccredited investors.

Crowdstreet, on the other hand, is better suited for high-net-worth and accredited investors looking to invest in Crowdstreet funds, single-sponsor funds, individual deals, and tailored portfolios. You need at least $25,000 to use Crowdstreet. 

Read our Crowdstreet review.

Roofstock vs. Fundrise

If you’re interested in investing in REITs, Fundrise is a better option. Fundrise is best for beginners looking to dip their toes into real estate investing. For only a $10 minimum, you can invest in REITs, electronic real estate funds, venture funds, and Fundrise IPOs. 

Roofstock is better for hands-on investors wanting to utilize the platform’s account features and tools. 

Read our Fundrise review.

Methodology: How We Reviewed Roofstock

We examined Roofstock real-estate investing app using Personal Finance Insider’s rating methodology for investing platforms to examine account types, pricing, ethics, security, and overall customer experience when reviewing investing platforms. Platforms are given a rating between 0 to 5. 

Real-estate investing platforms generally offer multiple assets, trading tools, fees, and other resources. Some investing platforms are better for more advanced investors or active investors, while others may better suit beginner investors and passive investors. Roofstock was evaluated with a focus on how it performed in each category.