When it comes to investing, real estate has a lot of advantages over traditional portfolios of stocks and bonds. However, those advantages do not come without a cost. And historically, the biggest cost when investing in real estate had to do with liquidity. The stock market may be a fickle beast, but at least selling your shares in a company or commodity is as easy as making a phone call or tapping a few buttons on a screen. In fact, with some stock trading platforms, the process is completely automated, so you don’t have to do anything. The same cannot be said when you try to sell your rental property, at least not when you do it the old-fashioned way. First you have to find a trustworthy real estate agent or brokerage to list your property. Then you have to arrange showings and inspections, figure out what to do with your tenants, negotiate sale terms and prices, and navigate the complicated closing process. In short, selling investment properties is a lot of work. But what if it wasn’t? What if selling your rental properties was as fast and easy as selling stocks? Well, thanks to an innovative proptech platform called Roofstock, it can be.
Single-family rental (SFR) investment properties make outstanding investments. For starters, they give you two different ways to make money. First, they generate income every month in the form of rent, which ideally will cover your mortgage and hopefully leave you with a little extra cash. Second, SFR investment properties can also appreciate in value over time, allowing you to either use that equity to refinance and buy more properties, or pocket the profits when it comes time to sell.
Another benefit to owning SFRs is that they offer stability. Studies based on data from the U.S. Census Bureau, S&P 500 returns, and the U.S. Treasury indicate that investments in the SFR market offer similar returns 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, the stock market crashed and overall home prices took a major hit when the U.S. housing bubble burst. But SFR rent remained steady throughout the economic downturn, and in some markets it even grew. 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, investing in SFRs has disadvantages, too. And historically speaking, the biggest problems come when it’s time to sell. We’ve already discussed the ways in which the selling process can be extremely difficult and time-consuming. But between the brokerage fees and commissions, capital expenses to prep the property, and the loss of rent from displacing current tenants, selling your investment property can also be very expensive.
Then there’s the issue of market competition. Right now there are approximately 16-million single-family rental units in the United States worth an estimated $3 trillion. That’s great news when you’re looking to buy. With that many potential investment properties to choose from, it makes it easier to find properties that meet all of your criteria, and it gives you a little more leverage when negotiating a price. But this is not such great news when you’re looking to sell. With so many SFR properties on the market, how do you make sure yours stands out? And how do you make sure you get the best possible price so you maximize the return on your investment?
The answer is Roofstock.
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 building 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.
No Geographic Limitations
It’s estimated that about 70% of all rental properties in the United States are owned by investors who live no more than one-hour away. But this is only because, until now, most investors didn’t have the ability to own properties they didn’t personally manage. 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.
But here’s the good news: Roofstock 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.
Invest With Confidence
If the idea of buying and selling investment properties online is new to you, it’s understandable if you’re a little skeptical. Do people really buy investment properties without even seeing them? But the answer is yes. To date, Roofstock has completed over $3 billion in transactions. And the reason is that they provide all the tools people need to invest with complete confidence.
Advanced Tools And AI Analytics
When shopping for properties, prospective buyers can sort properties 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 calculator 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.
These are all things for which you would have needed a realtor in the past. Now all you need is the Roofstock app.
The Roofstock Guarantee
Most importantly, every single property listed on the Roofstock marketplace comes with the revolutionary Roofstock Guarantee, which is a 30-day money back guarantee and a lease up guarantee rolled into one. If a buyer is not satisfied with their purchase within 30 days of closing, Roofstock will re-list the property and give them a refund when it sells again. And if you purchase a property that currently has no tenants, Roofstock guarantees you’ll get a signed lease within 45 days or they will cover rent for up to a year.
In short, Roofstock lets potential investors from all over the world shop and buy with 100-percent confidence. And that’s great news if you’re looking for a fast and convenient way to sell an investment property.
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.
Setting The Price
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 Without The Hassle
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 no 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.
No Hassle Closing
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.
Ready to learn how?
No Lost 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—bringing in an agent, making repairs, staging, arranging showings and open houses—are just too difficult to pull off when a family is still living in the house you’re trying to sell. 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.
But 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. That means you keep collecting rent right up until the day your sale closes.
No 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.
Pay 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 go the traditional route and hire a realtor, 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, instead, 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.
Of course, 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 online easier than buying a pair of shoes. Their curated 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.
Last but not least, let’s not forget the Roofstock Guarantee, which gives you a 30-day money back guarantee and a lease-up guarantee on every purchase. To put it quite simply, there is no other place to buy investment properties—whether online or in person—that provides this level of security to investors.
Manage Your Property And Grow Your Expertise
Being a landlord is not easy, especially when it’s not your full-time job. It takes a lot of time and a lot of knowledge most people just don’t have, which is the number-one reason why more people don’t invest in the SFR market. But Roofstock makes being a landlord easy thanks to their established network of fully vetted and highly skilled property managers.
Of course, if you purchase rental properties in your area and you want to manage them personally, you are free to do that. However, for those who want to dip their toes into other markets, or those who simply don’t want the hassle of managing their properties themselves, Roofstock’s nationwide network of property management firms is an invaluable asset. 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.
Selling rental properties used to be expensive and time-consuming. Then Roofstock came along and built a groundbreaking online marketplace, established a global network of real estate investors, and gave them the high tech tools they need to perform transactions completely online. Now selling rental properties is almost as easy as selling stocks and bonds.
If you’re a SFR investor and are looking for a way to make your next sale a lot easier—not to mention more profitable—list your property with Roofstock. You will not regret it.
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