Start Earning Money as a Rental Landlord with Roofstock Without Having To Buy A Property
Starting 2022, we enter a time where New Year’s resolutions take full effect. The task to save money and grow your income is one that is on many people’s minds. Despite the different financial situations of people, there are still common investment options. You can grow your investments with some of the best apps or pursue real estate investments.
If you’re looking for a risk-free, fun, and profitable field to try your hand at, then single-family rental (SFR) real estate investing may be the perfect investment for you! When you buy one property and stick to it, you don’t have to worry about losing out on potentially lucrative properties because of your limited portfolio.
Roofstock One is a platform that allows accredited investors to invest in real estate properties just by using their computers with no high upfront costs. This will allow them to seamlessly invest in these properties, without the worries of significant capital and infrastructure.
Are you curious about how this one works?
Luckily, you are in Real Estate Heaven and we’ve compiled all the details you need to know about Roofstock. By knowing every single detail about this platform, you will be able to determine how to earn money as a rental landlord without having to buy a property.
Remember, that while the first step is completing this amazing blog, the second and possibly more important step is taking action even if it’s imperfect action.
Let’s begin with getting to know what Roofstock One is.
Roofstock is a venture backed real estate investment company that allows investors to assess their interest in property using technology and data. The company uses this information to acquire properties that fit their criteria for the most exciting purchase.
After identifying promising markets and acquiring single-family properties that are selected for their rental potential, Roofstock One provides investors with shareholder options. Investors can also choose to invest in different portfolios based on geography or other characteristics to increase their exposure.
This process allows accredited investors to select investments that are beneficial for those goals. The process is effortless; many shoppers can add investments from their shopping cart and checkout with a personalized portfolio.
Gary Beasley, CEO and co-founder of Roofstock, said “we believe Roofstock One makes SFR real estate investing the simplest it’s ever been.”
Roofstock One reduces the hassle of buying and selling real estate by function in investment tasks. Investors can forget about title searches, mortgage approvals, agents and property managers while they work on assembling investment portfolios with allocations across markets and a specific investment goal.
Often, people with a single property feel like they are at the risk of losing their entire investment if something goes wrong. However, investors can decrease this risk with shares of tracking stock that give you exposure to multiple properties. Investors who buy stocks of tracking companies may receive a pro rata distribution based on the economics of the underlying properties, and receive potential long-term growth from housing price appreciation.
With a curated list, investing is tailored to your individual needs. By picking the different investments that suit your goals, you can choose between numerous options, and no one is excluded from building their own investment with Roofstock One.
If this is all not clear to you yet, we’ve got some answers for your questions.
How much do I need to invest in Roofstock One?
$5,000 is the minimum initial investment, but there are no limits to how an investor allocates their funds to businesses across a variety of industries. Investments can be made at $100 increments in the months that follow.
Is Roofstock One a good platform for long-term investors?
Roofstock One is a company that aims to continue growing your investment for the foreseeable future, with investors requiring an investment horizon of at least five years. This ensures the longevity of your portfolio’s value in the long term and keeps it from risk.
Is Roofstock One ideal for beginner investors?
There are a lot of factors to consider when making investment choices. As a starting point, beginners must first assess their goals and risk tolerance before determining how much capital to allocate to any investment. So if you’re new to investing then it can be difficult to navigate the process alone. To make things easier on yourself, be sure to learn about any tips and guides, and listen to “The Remote Real Estate Investor podcast”.
Investors interested in a fully passive investment may find the features of Roofstock One appealing. The company currently manages portfolios in several markets with international coverage.
On the other hand, Roofstock One is not registered with the SEC and has not been approved by any other regulator. This is an unregistered security ICO. It’s speculative and vulnerable to loss of your invested funds.
How will you know if you’re an “accredited investor” to start investing with Roofstock?
Roofstock One is an accredited investor opportunity. But, what does that require?
According to the Securities and Exchange Commission (SEC), an accredited investor includes anyone who:
Earned income that exceeded $200,000 ($300,000 combined with a spouse) in each of the last two years and expecting to earn the same for this year or This person has come into their net worth of over $1 million either alone or together with a spouse or spousal equivalent (excluding the value of the person’s primary residence), or holds in good standing a Series 7, 65 or 82 license.
Roofstock One, Inc. operates out of the state of Maryland and does not operate as a broker, dealer, investment advisor or investment manager in the U.S., either individually or as a registered funding portal. Roofstock One’s stocks are available only to accredited investors as defined by Rule 501 of the U.S. Securities Act 1933
How much does Roofstock One impact your tax filing?
As with other investments, investors are responsible for tax obligations on capital gains or proceeds from revenue. Roofstock One is a platform that simplifies taxes by providing investors with a 1099 which captures their share of income after applicable deductions for depreciation that had been calculated by algorithm.
It’s important to note that those who invest in SFRs are responsible for tracking income and expenses, calculating appropriate depreciation, and completing necessary tax forms.
Now, let’s proceed with the insights on what are Roofstock’s plans on the single-family rentals industry.
The real estate market was facing a problem with the single-family home. Pricing and quality were different depending on what neighborhood you looked into. Tenants were unpredictable and data on rental homes is a mess. In fact, in aggregate 14.7 million single-family rentals total worth $4 trillion couldn’t really be considered a class of asset–they were all over the place in terms of value.
New startups are taking a new approach to scaling quickly, capitalizing on investors who consider them the next hot startup. Roofstock is a recent example of this new trend. As if investors didn’t find it difficult enough to figure out which startups to back, they now have more options for investment due to revenue and strategy graphs that get more and more “smooth” as time goes on.
With the emergence of new technologies, startup companies are gaining traction in the market. They find themselves with massive capital and venture firms fighting to back them. Roofstock, a company that raised $240 million in March at a $1.9 billion valuation, is one of the latest startups that focus on reaching out to their customers via digital platforms.
Originally founded in 2015 by Gary Beasley, Gregor Watson, Devin Wade and Rich Ford, Roofstock is an online platform where single-family homeowners can rent their homes. Individual investors can buy and sell homes so that they already have a tenant living in them, with the company providing key metrics such as annual return on investment and price appreciation.
Roofstock charges sellers 3% and buyers 0.5% of the total purchase cost, removing the broker role so everyone can become a real estate investor. Property management is available as an optional add-on service to offer passive investment opportunities for those with limited time or financial means.
But also for the institutional classes.
Investors of single family rentals are now able to sell real estate on a large scale by pooling their funds, selling hundreds of properties at a time. By calculating your desired capital and where you want to deploy it, algorithms can generate profitable leads for both the buyer and seller.
Run by an alumnus of a behemoth that dominated the field in the mid-2010s, it wants to be the main platform for the entire real estate industry, acting as a central nervous system that connects all parts of this sector. The single-family rental experience looks and acts more like a commodity with easy access to both new buyers and renters.
But, if the house becomes a commodity, who will end up winning? The lion’s share of Roofstock’s business is institutional and they’ve created tools that make it easier for big investors to identify, buy and manage homes. As a result of managing their concerns, they’ve had to adjust on how homeownership has been creating wealth for average Americans throughout history. This could trigger regulation.
CEO for Roofstock, Beasley, does not agree with the narrative. “We are creating more liquidity and transparency and bringing down costs, which ultimately benefits investors of all sizes,” he said in an interview for this story.
Let’s break it down.
The action is the juice
Without a large number of users, platforms such as Facebook would be less valuable. Many platforms create value when their network effect is reinforced. The more new users join the platform, the greater importance existing users feel towards it.
This is the same for Roofstock. The company’s resources are geared toward implementing activity, which means quite a bit of its growing war chest is going toward this task.
Focusing the effort entirely on accredited investors, who are the type to have the assets and resources to sustain a position in real estate investments, this platform offers lectures, tutorials -for beginners or those learning new skills- online coaching, and fellow memberships with no minimal investment. This sounds like something more than it’s reached as a profit-generating foundation, but as a means of fanning out consistency around the current speculative practices coming in.
If you happen to own an online business, the startup may be worth your attention. They provide podcast resources including episodes on topics like how beginners and experienced investors might invest $50K, as well as how to tap into retirement accounts with no capital gains taxes.
“It takes time to build credibility,” Beasley said of the firm’s content initiatives. “What we are doing is being relevant to people in whatever phase of their cycle they may be in.
Beasley, commented that the single-family rental and real estate sector is a bond with an equity kicker. By receiving a monthly return in the form of rent, investors collect from paying credit card debt. Beasley noted that most investors finance the bulk of their purchase with debt, making the return on equity even more appealing.
“If you have a home that just covers its costs over a five-year period and it can add 3.5% per year and get an 80% loan on it, you can get a 14 or 15% return on investment for it,” he stated on the podcast.
While a good supply of homes may make people more comfortable buying, it’s also important that Roofstock has enough capital to purchase them in bulk so they will have variety in their availability. The risky process is being undertaken by Opendoor and Offerpad who are continuing to lose money and whittle away at their customer base. Zillow also came out with this option but has since gone back from the market.
“There are an awful lot of positives to institutional capital providing quality, affordable workforce housing for people who choose to rent.” Gary Beasley, Roofstock
Yet Beasley believes Roofstock’s preference for buying homes with tenants sets it apart.
“Each day, we keep these homes on the market, and we make money. And each day that the traditional investor holds onto those homes, it costs them money,” he told The Real Deal. “We don’t have to turn out capital as quickly, and since we have such good insights into what investors are looking for, this really is in service of creating marketplace liquidity and putting products on the shelf they want.”
Fractionalized ownership of homes is available through Roofstock One, which allows investors to buy shares in single family rentals instead of acquiring all of them at once. Spreading your risk across 20 homes instead of two is a strategy that could reduce the cost of acquiring rental properties.
With investments for single family homes, investors can either buy common stock and become an owner of all the properties in the program or invest in tracking stocks, which allow them to bet on regions or types of available homes — say two-bed, two-baths in the mid-Atlantic. This is a long term investment process but might change. Down the road, they want to commoditize this piece of their business by creating a secondary market trading platform.
The digital ledger would hold granular information about each property, from previous sale and rental information to inspections, property upgrades and more. The tokenized ownership of a property could also speed up investment for real estate investors and create more deal flow for the industry.
Real estate transactions are a risky venture frequently because there is an endless supply of potential owners, with limited demand for the property. With these issues in mind, Beasley talks about the “instant liquidity that eliminates that asymmetry of information between the buyer and seller” through the use of tokenization.
Mailing it in
“So you want to be a landlord?” is an expression often shared in the Twitter-verse by real estate owners. Owners share stories of how wrong things can go at their properties, ranging from boilers bursting at midnight to more lurid tales.
It is an illustration that real estate investing is difficult to become passive with because the investment has to be nearby. Roofstock has utilized this thought with the majority of its M&A activity going towards making it easy.
In March 2021, with an investment from commercial real estate giant JLL, Roofstock acquired single-family asset management software platform Stessa. The tool is used for income and expense tracking and helps with financial reporting and tax documentation.
It has recently acquired Great Jones and also created a preferred partner program with other property managers to stand out from the competition. It is a membership site like Airbnb that accepts “superhosts” with consistently high ratings and providers of title insurance and escrow services.
“I look for someone with a long track record, and has the ability to share data with me as to how well they operate their properties–even if there is a leak,” co-founder Watson said on a company podcast. “They need to be able to negotiate terms with another company, or provide one if they don’t want to do that themselves.”
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