Roofstock Review 2024: Invest in Single-Family Rental Properties (2024)

Paid non-client promotion: Affiliate links for the products on this page are from partners that compensate us (see our advertiser disclosure with our list of partners for more details). However, our opinions are our own. See how we rate investing products to write unbiased product reviews.

Roofstock is a data-driven real estate crowdfunding platform for investing in single-family rental homes with the help of vetted property managers. Investors can easily diversify their portfolios using Roofstock's proprietary data and underwriting technology.

Business Insider's personal finance team compared Roofstock to the best real estate investing apps. We found its fees and platform accessibility to be a standard offering for the industry. Its investments are also highly illiquid.

Introduction to Roofstock

With Roofstock, accredited and non-accredited investors can buy and sell individual single-family rental (SFR) properties using the platform's proprietary and analytical data. Instead of dividend payouts, SFR properties generate passive income through tenant rental payments. There are no sign-up fees.

Accredited investors (aka those with a net worth of $1 million) can buy and sell physical properties, hand-pick real estate units, and create a curated portfolio of SFR properties. Roofstock's team of experts can help build and manage these SFR portfolios.

Roofstock aims to modernize real estate investing with the help of artificial intelligence and real estate market experts. It wants to make owning and managing SFR properties accessible and affordable to everyday investors. However, investing in real estate is still expensive compared to traditional asset classes like stocks and ETFs.

Real estate investing comes with significant risk. Only experienced investors with a high risk tolerance and willing to play the long game for better returns should consider Roofstock. Non-accredited investors seeking REITs should consider a different real estate platform.

Roofstock: Overall Rating

How Roofstock Works

Roofstock Property Marketplace

On Roofstock's online marketplace, you can browse pre-vetted single-family rental properties. SFRs are pre-vetted using Roofstock's algorithm that factors in home value, estimated rental income, total return, and the surrounding areas' crime level, employment status, and average income.

Each market listing provides detailed information on the property's valuation and the local market, leasing terms, short and long-term repair costs, and a full inspection report from an independent property inspector. Most available properties are in states with warmer climates, like California and Florida. But there are properties available throughout the country.

You can use the "shop with an agent" feature to find the best real estate opportunities that match your goals. Similarly, If you don't wish to manage your invested property yourself, you can hire one of Roofstock's pre-vetted property managers to do the legwork for you. You can also find real estate brokers and agents on Roofstock.

Roofstock One

Roofstock One offers pre-built SFR portfolios for accredited investors interested in hands-off real estate investing. You can invest in the entirety of the portfolio as is or pick and choose individual units for a custom portfolio. Different states and cities have separate portfolio options.

Whether you're investing in a single rental property or multiple, Roofstock displays a series of real estate rentals in different cities and states. Each portfolio lists the total price, cap rate, average monthly rent, net operating income, and location of each rental property within the investment portfolio.

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 fall below 90%.

Roofstock Self-Directed IRA

You can also invest in real estate offerings with a self-directed IRA for tax-advantaged rental income. In other words, Roofstock's self-directed IRAs allow you to purchase rental properties and assign your IRA as the title holder.

You must open an IRA account withNew Direction Trust Company. New Direction becomes your IRA's custodian and handles your administrative obligations. To fund your account, you can do a 401(k) rollover or transfer funds from an existing retirement plan without tax or penalty.

Roofstock Fees

Roofstock property acquisition fees are $500 or 0.5% of the contract price for offers on properties (whichever is higher). Down payments and fees will vary per rental, but the process for buying a property is different than that for selling one.

People selling on Roofstock are charged a listing fee of $2,500 or 3% of the sale price (whichever is greater). Property management, brokers, and agents will also charge their own fees.

Opening an account costs $0 ($5,000 for Roofstock One).

Pros and Cons of Roofstock

Roofstock Trustworthiness

The Better Business Bureau has given Roofstock an F 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.

Roofstock hasn't acquired any major lawsuits or been part of a public scandal since its founding.

Roofstock vs. Other Real Estate Investing Apps

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 and no setup fees. It's best for accredited investors seeking to diversify their portfolio with fractional shares of real estate properties across the U.S. However, Roofstock only offers single-family rental properties and doesn't pay dividends.

Crowdstreet is a better option for generating passive income through individual properties or Crowdstreet funds. Crowdstreet offers multifamily, industrial, office, retail, and land opportunities. But the platform is only available to accredited investors who can devote at least $25,000 to investing in real estate.

Crowdstreet review

Roofstock vs. Fundrise

Fundrise is another popular real estate crowdfunding platform. In addition to real estate, Fundrise offers private credit and venture capital investment opportunities. It is also available for non-accredited investors.

Fundrise is the better choice for those interested primarily in REITs. It offers multiple curated income and growth plan options with access to quarterly liquidity. Fundrise is best for newbie real estate investors looking to enter the market. Fundrise's minimum investment is $10.

If you want a more hands-on approach to investing in the market — or you're interested in buying and selling physical properties — Roofstock is the best way to go.

Fundrise review

Roofstock FAQs

Why You Should Trust Us: How We Reviewed Roofstock

We examined Roofstock real-estate investing appusing Business Insider's rating methodology for investing platforms to examine account types, pricing, ethics, security, and overall customer experience when reviewing investing platforms. Each real estate investment platform also receives a liquidity rating based on how it compares next to other real estate apps, not other types of investment apps. Platforms are given a rating between 1 to 5.

Real estate platforms offer buying opportunities, trading tools, fees, and management services. Roofstock was evaluated based on its performance in each category.