Proptech startup Roofstock is aiming to create more real estate investors with their platform that allows people to buy shares of homes for as low as $5,000.
The Oakland-based tech firm created a marketplace that offers its users a lower barrier to entry to become investors in single-family rental homes in 41 markets and 23 states across the United States. In addition to offering users data analytics, property management oversight, and other tools, Roofstock hopes to provide its investors with the economic and tax benefits of rental home ownership without the responsibilities of being a landlord.
“Investor priorities may be changing, and we recognize that the old ways of doing things may no longer apply when it comes to real estate investing,” Roofstock CEO Gary Beasley said. “With Roofstock One, we’re making it frictionless and seamless for investors to reap the potential benefits of real estate investing.”
Financing, insurance, leasing, property management, and asset management are handled by Roofstock, the company said, which provides returns in the form of potential dividends, tax benefits associated with real estate ownership, and price appreciation.
The “invest-by-the-share” model will not only free up investors’ time but also lower barriers to entry for would-be real estate investors, the company said.
“Given the levels of the stock market and recent volatility, SFR investments may provide some protection in the event of a down market, as rental homes have historically enjoyed rental demand even through recessionary cycles,” Roofstock co-founder Gregor Watson said.
The next proptech winner?
The company already has been recognized as an innovator in real estate, earning such commendations as the “Best Real Estate Platform” at the Benzinga Fintech Awards in 2018. Founded in 2015, Roofstock has completed more than $1 billion of property sales since its launch, attracting such venture capitalists as Bain Capital Ventures, Lightspeed Venture Partners, Canvas Ventures, Khosla Ventures, QED Investors, Nyca Partners, and FJ Labs.
Roofstock represents one of many startups blossoming in the fast-growing proptech space. Venture capitalists are investing billions of dollars into the proptech sector, short for property technology. Proptech firms — which include big names like Zillow, Compass, Homelink, and more — create new products or business models for the real estate market, including products or services for homebuyers and sellers, smart-home devices, office administration, building management, marketing, construction, and even city-planning.
“Roofstock One exemplifies why there has been an interest in proptech these days,” said Roofstock board member Matt Harris, a partner at Bain Capital Ventures. “The Roofstock team took feedback from their marketplace and designed a product for the passive investor looking for direct real estate exposure.”