Investing with Roofstock: A Beginner’s Guide to Buying Rental Properties Online

Introduction

Real estate has long been one of the most powerful ways to build wealth—but traditionally, it’s also been time-consuming, expensive, and difficult to break into. Between saving for a down payment, finding properties, managing tenants, and maintaining buildings, many aspiring investors find themselves overwhelmed before they even begin. That’s where Roofstock comes in. This platform helps simplify the real estate process, making it possible to purchase fully-managed, tenant-occupied rental homes online. In this post, we’ll explore how Roofstock works, the benefits and drawbacks, and how to get started.

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What Is Roofstock?

Roofstock is an online marketplace for buying and selling single-family rental homes. Founded in 2015, the platform was created to make real estate investing more accessible and efficient. It caters to both new and experienced investors by offering a streamlined, tech-enabled way to invest in income-generating properties without having to live near the homes or manage them personally.

The core idea is simple: Roofstock lists properties that already have tenants in place, professional management options, and financial data available upfront. This allows investors to start earning rental income from day one.

How Does Roofstock Work?

Here’s a basic overview of the Roofstock process:

1. Browse Properties: You can search Roofstock’s online marketplace based on location, price, expected return, and more.

2. Review Financials: Each listing includes detailed investment analysis—rent roll, expenses, projected returns, inspection reports, and tenant information.

3. Make an Offer: You can either buy the property outright at the list price or submit an offer below asking.

4. Close Remotely: Roofstock facilitates a remote closing process, handling the legal and financial aspects for you.

5. Property Management: You can hire a Roofstock-approved property manager, or manage the property yourself if you prefer.

Types of Properties on Roofstock

Roofstock specializes in:

• Single-family rental homes (the majority)

• Portfolios of homes for larger investors

• Turnkey properties (renovated and rent-ready)

• Leaseback homes (occupied by previous owner and leased back after sale)

Most properties are already rented out, making them ideal for investors looking for instant cash flow.

Key Benefits of Roofstock

1. Remote Investing

   • You can buy rental properties in top-performing markets around the country, no matter where you live.

2. Passive Income

   • With tenants and property management already in place, Roofstock allows for a more passive investing experience.

3. Data-Driven Decisions

   • Listings include inspection reports, lease terms, tenant payment history, neighborhood ratings, and projected returns.

4. Lower Barriers to Entry

   • Properties typically start in the $80,000–$150,000 range, much lower than prices in many large metro areas.

5. Certified Properties

   • Roofstock’s certification process ensures that listings meet quality and income standards.

6. 30-Day Money-Back Guarantee

   • If you’re unsatisfied after purchasing a property, Roofstock offers a 30-day money-back guarantee on select homes.

Drawbacks to Consider

1. Not 100% Hands-Off

   • Even with property managers, you are still the owner and responsible for decisions, taxes, and emergencies.

2. Market Risk

   • Property values and rents can fluctuate with local market conditions. Make sure to do your own research.

3. Liquidity Issues

   • Like any real estate investment, your capital is tied up, and selling the property could take time.

4. Due Diligence Required

   • Roofstock provides lots of data, but it’s up to you to analyze it thoroughly before committing.

Roofstock vs. Fundrise

FeatureRoofstockFundriseProperty OwnershipDirect (you own a house)Indirect (you own shares in a fund)Involvement LevelModerateVery lowMinimum Investment~$20,000+$10Rental IncomeDirect to youPooled and distributed as dividendsControlHigh (you choose the property)NoneLiquidityLowModerate (quarterly redemption)

If you want full ownership and control of real estate, Roofstock may be the better choice. If you prefer complete passivity, Fundrise is more hands-off.

Who Is Roofstock Best For?

• DIY investors who want control over which properties they own

• People looking for out-of-state investments

• Buy-and-hold investors seeking long-term rental income

• Investors who want property management help but still own the asset

Roofstock is not ideal for:

• People who need fast access to their investment funds

• Those who prefer ultra-passive investments

• Investors who are uncomfortable managing tenants or managers

How to Get Started with Roofstock

1. Create a Free Account

   • Sign up at Roofstock.com to start browsing properties.

2. Set Investment Criteria

   • Choose your target markets, price range, expected cash flow, and risk tolerance.

3. Analyze Listings

   • Use Roofstock’s analytics and reports to compare properties based on ROI, cap rate, appreciation potential, and neighborhood scores.

4. Make an Offer

   • Submit an offer or buy the property at list price. Roofstock guides you through the closing process.

5. Close and Start Earning

   • Once closed, you’ll start receiving rent. You can either use Roofstock’s recommended property managers or choose your own.

Costs and Fees

• Marketplace Fee: 0.5% of purchase price or $500 minimum

• Closing Costs: Varies by property and state

• Property Management: Typically 8–10% of monthly rent

• Other Costs: Home inspections, insurance, property taxes, and potential maintenance

Roofstock One: A More Passive Option

For those looking for a more passive experience, Roofstock also offers Roofstock One, which allows accredited investors to purchase fractional shares of rental homes. With a minimum investment of $5,000, you can earn income and appreciation from professionally managed properties without owning the full house.

However, Roofstock One is limited to accredited investors (high income or high net worth) and is less customizable.

Roofstock Performance: What to Expect

Returns vary by market and property. Here are typical metrics:

• Cap rates between 5%–7%

• Cash-on-cash returns in the 6%–10% range

• Appreciation depends on local market trends

Many investors use Roofstock to build diversified portfolios across different markets to balance risk and return.

Final Thoughts

Roofstock opens the door to direct real estate ownership for investors who don’t want the full-time job of managing properties. With access to cash-flowing homes, vetted financials, and professional management, it’s never been easier to invest in rental real estate remotely.

While it’s not as passive as REITs or platforms like Fundrise, Roofstock offers more control and the potential for higher returns. It’s ideal for long-term investors who want to build wealth through real assets without having to live near their investments.

As always, do your own research, understand the risks, and only invest money you can afford to tie up for several years.