With demand for single-family rentals at an all-time high, there has never been a better time to sell your rental property than right now. Unfortunately, a lot of investors are reluctant to strike while the iron is hot because the traditional process of selling real estate takes too long, costs too much money, and requires too much work. So instead of cashing out on a property and using the profits to grow their portfolio—or finally buy that boat they’ve always wanted—they just hold steady and let opportunity pass them by. But here’s the thing. Selling your rental property doesn’t have to be hard. Thanks to advancements in technology, and forward-thinking companies like Roofstock, you can now sell your rental property for top dollar right from the comfort of your own living room.
If that sounds pretty appealing, you need to keep reading.
Single-family rental (SFR) properties have always made outstanding investments, because unlike a lot of other assets, they give you two ways to make money. First, they generate income every month in the form of rent, which ideally will cover your mortgage and give you a little extra to put in the bank. Second, when chosen wisely, SFR properties will appreciate in value, allowing you to either use that equity to refinance and buy more properties, or pocket the profits when it comes time to sell.
The SFR market also provides a lot of stability. Studies based on data from the U.S. Census Bureau, S&P 500 returns, and the U.S. Treasury show that investments in the SFR market typically provide returns similar to the stock market. And while the SFR market has ups and downs just like the stock market, there is not a strong correlation between the two. In 2008, for example, when the U.S. housing bubble burst, the stock market crashed and overall home prices took a major hit. But the SFR market remained steady throughout the economic downturn and has been growing ever since. That’s why SFRs are an excellent choice for investors who want to diversify their portfolios with investments that hedge against downturns in the stock market.
Of course, until recently a lot of investment experts still categorized single-family rentals as an “alternative” asset class. However, as a result of the COVID-19 pandemic, now even that is starting to change.
When the pandemic hit in the spring of 2020, and all of a sudden everyone was stuck in their homes 24/7, it triggered a significant shift in consumer preferences. People who previously had been perfectly content with small apartments in urban environments now desired larger living spaces with backyards and spare bedrooms they could turn into home offices. However, this increase in demand contributed to a rise in housing prices that have made home ownership impossible for a lot of people. According to real estate analytics firm Attom Data Solutions, last year average earners in 43 percent of U.S. counties could afford to own a home there. Today, average earners in 55 percent of U.S. counties can’t afford to own a home there.
With more people wanting bigger homes, but fewer people actually having enough cash for a down payment, the single-family rental market has exploded. Now, big-time institutional investors are taking an interest in an asset class previously dominated by small landlords.
“Three years ago I would have said this was a fad,” Mike Clow, Executive Director for Greystar Real Estate Partners recently told Bloomberg. “But it’s become more prevalent because it’s filling a need for consumers.”
Of course, the way big institutional investors approach the increased demand for single-family rentals is to actually build more single-family rentals. And that may sound like bad news for individual investors. But it’s not. It’s actually good news. For starters, not all build-to-rent developments have corporate owners. Many are developed with individual investors in mind. In fact, some experts believe the percentage of newly built SFR properties sold directly to investors could hit 5 percent in the coming years.
The other great thing about newly built SFR properties is that they are uniquely appealing to the new generation of renters looking for modern homes.
“Imagine if consumers could only lease old cars, not new cars,” Rick Palacios Jr. of John Burns Real Estate Consultants recently told the Wall Street Journal. “That’s how single-family rentals have been.”
What does all of this mean for you if you own one or more single-family rental properties? It means right now might be the perfect time to cash in some of the equity you’ve built up and reinvest it. But what’s the best way to actually do that?
Selling real estate the old-fashioned way is extremely difficult and time-consuming. It’s also very expensive, between the brokerage fees and commissions, the capital expenses to prep the property, and the loss of rent from displacing current tenants.
Roofstock was founded by people who understood the benefits of investing in brick and mortar real estate, but who also realized that doing so has its own unique set of challenges. So in 2015, they set out to revolutionize the SFR sector by creating a high-tech online marketplace that makes buying, selling, and managing investment properties radically simple and cost-effective. This platform was specifically designed to remove the geographical and logistical barriers of investing in rental properties by giving buyers and sellers the tools, analytics, and expert support they need to make smart choices.
Forget Geographic Limitations
Roughly 70 percent of all rental properties in the United States are owned by investors who live no more than one-hour away. But this state of affairs was born out of necessity, not choice. The traditional method of buying, selling, and managing a rental property requires you to be there in person for just about every step of the process. Unfortunately, this kind of geographic limitation is bad for buyers and sellers alike. For buyers, only shopping for properties close to you limits your choices in terms of both volume and variety. For sellers, only listing your property locally means there are fewer potential buyers. That means there will be less demand for what you’re selling, which means you may not get the best possible price.
One of Roofstock’s key features is that it removes the geographic limitations on buying and selling investment properties. This platform creates an online marketplace of high quality single-family rental properties located across the country, and it allows you to purchase from anywhere in the world. That means, when the time is right to sell your rental property, Roofstock gives you access to a global network of investors. And more potential buyers means greater demand, which means a faster sale at the best possible price.
The Tools You Need To Sell Your Rental Property With Confidence
Does the idea of buying and selling investment properties completely online, without anybody setting foot inside the house, sound crazy to you? That’s certainly what realtors want you to think. In the past, sellers were completely reliant on them for all the data and number crunching required to make smart decisions.
When you buy and sell on Roofstock, all you need is their incredibly powerful AI-driven app. When shopping for properties, prospective buyers can sort listings based on extremely specific criteria, including things like estimated annual return, total return over the course of five, 10, 20, or 30 years, or expected appreciation. Prospective buyers can also use Roofstock’s built-in calculators to adjust the purchase price, down payment, and expected rent so they understand all their options. And every single property listed on the Roofstock marketplace includes a proprietary Neighborhood Score, all inspection reports, offering documents, and property certification.
When you put all the data right at people’s finger tips, selling and buying properties online makes so much more sense. That’s why Roofstock has completed over $3 billion in transactions to date.
Selling your income property with Roofstock could not be easier. The first step is submitting a listing. To do that, you simply enter your property information, answer a few questions, and submit a few high quality photos. Once your listing is submitted, you will receive a free price estimate. After that, if you wish to proceed, your property will undergo the official Roofstock Certification process.
During the certification process, Roofstock will perform all necessary due diligence. That includes collecting additional photos, leases, ledgers, and documents, as well as performing a property inspection, ordering a title report, and creating a listing agreement. All of this guarantees complete transparency for buyers and sellers. And by doing it up front, it speeds up transactions. Once your property is officially certified, you will work with Rookstock’s team of account executives to determine a proper valuation based on the condition of the property and Roofstock’s proprietary market data. However, the final decision on listing price is up to you. And once that decision is made, Roofstock will create an attractive listing and publish it in their marketplace.
Get Your Property Listed Fast
In most cases, the entire process of getting your property listed takes just 15-to-35 days. And you can do it all without leaving your house. You don’t have to meet your real estate agent every other day to sign papers. You don’t have to worry about renos or staging. You don’t have to arrange showings and open-houses, because with Roofstock, there are no showings or open-houses. In short, with Roofstock you get to skip all the hassles of listing your income property.
Roofstock Virtual Open House
With a traditional real estate listing, an open house is how you attract attention and get people to come see your property. So you might wonder whether you are missing out when you sell your rental property online. But you’re not. Roofstock gives every listing a virtual open house. This virtual open house is a 24-hour period during which your property will be featured at the top of the Roofstock marketplace, and thus will get high traffic and visibility. During this period, buyers can submit offers, and you will have 24 hours after the virtual open house to respond.
For anybody looking to sell as quickly as possible, this is an absolutely essential feature.
Hassle-Free Closing When You Sell Your Rental Property
Closing sales is also easier with Roofstock. When you sell your rental property the old fashioned way, every offer requires you to go through a stack of paper. With Roofstock, all offers are received and managed completely online. Then, when you accept a bid, Roofstock’s team of expert advisors handles the closing process and takes care of all the paperwork required to finalize the deal so you can go on with your life.
The ability to sell your rental property fast and without all the hassle is great. But would it really be worth it to most sellers if it cost them more money? Probably not. Luckily, selling investment properties on Roofstock isn’t just faster and easier. It’s also cheaper.
Keep Earning Rent
Though it is not impossible, it is very difficult to sell your rental property the old-fashioned way without removing tenants. That’s because all the steps involved in selling a house—bringing in an agent, making repairs, staging, arranging showings and open houses—are just too difficult to pull off when somebody is still living there. Unfortunately, what that means is you lose the rent you would have collected while the property is listed. And since most traditional home sales take three months to complete, you stand to lose at least three months worth of rent.
Luckily, when you sell your rental property on Roofstock, you don’t have to displace your tenants. On the contrary, properties that are already occupied by quality tenants are preferred because they are more attractive to investors who want to start earning income as soon as possible. That means you keep collecting rent right up until the day your sale closes.
Zero Capital Expenses
Roofstock also saves you money on capital expenses. When you sell your rental property with a realtor, you almost always have to perform some renovations and upgrades before it gets listed on MLS. Sometimes the cost of those renovations and upgrades can be pretty high. While capital expenditures can provide some tax relief, sometimes you just want to sell a property and be done with it. When you sell on Roofstock, you’re selling a rent-ready property to a fellow investor, so there are no capital expenditures required. That makes selling faster and cheaper.
Half The Commission
As you probably guessed, selling a property on Roofstock is not completely free. They have to make money somehow. However, the fees you pay to Roofstock are only half what you would pay to a brokerage. When you hire a realtor to sell your rental property the old-fashioned way, you’re typically on the hook for a 6-percent commission, though sometimes you might be able to negotiate them down to 5 percent. But when you use Roofstock to sell your rental property, you’re only on the hook for a 3-percent commission.
The Savings Add Up
Let’s say you want to sell a SFR property worth $100,000 that brings in $1,200 per month in rent. If you hire a realtor and list the property on MLS, you would most likely lose three months worth of rent while the property is for sale. That’s $3,600. Meanwhile, the average capital expenditure to prepare a property for sale through MLS is 2 percent. That’s $2,000. And last but not least, there’s the 6-percent brokerage commission. That’s $6,000. So, on average, it will cost you about $11,600 to sell a $100,000 rental property when you do it the old-fashioned way.
But what if you sell your rental property on Roofstock? Well, you wouldn’t lose any rent, and you wouldn’t have any capital expenditure to prepare the property for listing. You would only have to pay Roofstock’s 3-percent commission, which works out to $3,000. Thus, on the sale of a $100,000 rental property you would save a whopping $8,600 by going with Roofstock. And of course, you would probably sell it faster because your property would be marketed to a global network of buyers specifically shopping for SFRs. And you wouldn’t have to arrange inspections or deal with mounds of paperwork. And you would have all the data, analytics, and expert advice you need to guide you through the process. And you could complete the entire transaction from the comfort of your living room couch.
Once you experience how easy it is to sell your rental property on Roofstock, you’ll probably want to stick around and see what else they can do for you. And that’s good, because Roofstock isn’t just for selling SFR properties. It's a one-stop online marketplace for learning, selling, buying, financing, and managing SFR properties.
Buying Made Easy
Looking to reinvest the profits from your last sale? Roofstock’s online marketplace makes buying rental properties incredibly simple. Their inventory of SFR properties have been selected for their ability to generate income. Each one has gone through the same Roofstock Certification process your property went through, so you know the standards are high. And you’ll have all the data and analytics you’ll need to evaluate properties from anywhere in the world.
When you buy with Roofstock, you have total financial flexibility. If you have a mortgage broker you trust and have worked with for years, you are free to arrange your own financing. All you have to do is upload your pre-approval letter via the Roofstock app. However, you can also apply for financing directly through the Roofstock platform. They have a pool of trusted lending partners that often offer preferred rates to Roofstock users. And of course, if you have any questions about financing, Roofstock has a team of experts ready to help.
Become A Real Estate Mogul
Being a landlord is not easy, especially when it’s not your full-time job. But Roofstock makes being a landlord easy thanks to their established network of fully vetted and highly skilled property managers. These firms have been specially selected for their experience in operating properties as investments, and they have specialized knowledge of their local markets. They can handle all the administrative and operational tasks required, including marketing, leasing, repairs, maintenance, bookkeeping, tax reporting, and tenant relations. That leaves you free to focus on optimizing your portfolio instead of interviewing prospective tenants and fixing clogged sinks.
And speaking of optimizing your portfolio, Roofstock can help you do that, too, through their Roofstock Academy training program. Created by experts who have decades of experience in SFR and have purchased thousands of properties, this hands-on training program will teach you how to avoid costly mistakes and become a successful real estate investor. Roofstock Academy offers one-on-one coaching, group coaching, private and group chats and forums, and over 50 hours of on-demand lectures covering SFR investment strategies for both beginners and experts alike.
Right now the demand for single-family rental properties has never been higher. And with more modern, highly desirable SFR properties being developed every day, now is the perfect time to leverage your equity and expand your portfolio. Don’t miss out on your chance to grow your wealth because you’re scared to try something new.
Roofstock is a groundbreaking online marketplace with a global network of real estate investors, and they give buyers and sellers the high tech tools they need to perform real estate transactions completely online. If you’re a SFR investor and you’re sick and tired of all the hassle and expenses associated with selling properties the old fashioned way, list your property with Roofstock, today. It might be the smartest financial decision you’ll ever make.
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