Investment Property Marketplaces – The Easy Way to Invest

Buying a home is never easy, but it can be even more frustrating when the home you’re buying isn’t your own. In addition to the home buying process itself, there are other considerations such as managing the home and financing the purchase.

It would be much easier if you didn’t have to handle all of those steps on your own, wouldn’t it? Well, that is exactly what a real estate investment marketplace can do for you.

Of course, these marketplaces do charge fees for their services. Is it worth paying a fee for these services? That will be for you to decide.

For now, let’s take a look at what exactly these marketplaces can do for you and how they simplify the process.

The particular marketplace this article will reference is Roofstock, although you may see other companies create similar services in the future.

An investment property marketplace is specifically meant for buying and selling rental properties. That could be anything from residential to commercial.

But, on Roofstock, for example, you will only find residential properties. In particular, the properties on this platform are single-family homes.

The purpose of the platform is to simplify the process for investors. Instead of having to find your own property manager, financing, and insurance, all of that is rolled into one seamless experience.

Because the process is streamlined, it also moves more quickly. If you pay in cash, the closing can be complete within 15 days or 30 days if you finance.

That means you start earning a return on your investment sooner. All in all, it’s great for real estate investors who want to skip the cumbersome buying process.

Buying a Rental Home

When you buy an investment property on an investment marketplace, things are easier from the very beginning. That’s because these websites are meant specifically for investors rather than those buying a home for themselves.

The result is that depending on the site you’re using, you’ll get various investment projections, such as gross yield and annual return.

Better yet, because you are buying investment properties and not a home for yourself, some of these properties are already occupied. So, you don’t have to worry about finding tenants.

Many of them already have dependable tenants who pay their rent on time and don’t cause problems.

Finding a Property Manager

If you buy a home the traditional way, you have to manage each step separately. That includes finding a property manager if you don’t want to manage the home(s) on your own.

But that isn’t the case when you use an investment property marketplace. They will handle finding a property manager for you.

More importantly, they will find you a local property manager.

If you live in New York but are interested in properties in California, it would normally be difficult to invest in a property that far away. You may not know the market, and you’re even less likely to know property managers in the area.

That, too, is a non-issue with a real estate investment marketplace. They will assign you a local, reputable property manager with whom they have partnered.

No need to do hours of research finding a decent property manager in a new market.

As you can see, not only is finding a property manager easier, but you are no longer location-limited.

Financing and Insurance

Financing is relatively simple when using a marketplace. Instead of finding your own lender, you’ll be presented with a list of partner organizations.

And lending partners are able to offer discounted rates, so you could save money overall – even with the marketplace fee. In addition, there is an on-site calculator to help estimate your loan amount.

Once you have found a lender that suits your needs, you can apply to be pre-approved. In most cases, the pre-approval process is entirely online.

After the pre-approval is complete, you can select a property in your price range. Then the loan is funded during the closing process.

Easy-peasy.

Finding an insurance policy is similarly simple. During the closing, they’ll help you find an insurance policy that meets your needs.

How Much Does it Cost?

There may be other companies offering these services in the coming years, so it’s difficult to give an exact cost. However, two examples of popular marketplaces Roofstock and Fundrise.

This website focuses primarily on residential real estate, making it a great way to diversify your portfolio during a tumultuous business market.

Roofstock charges very reasonable fees. Making an offer on a home is free; if accepted, you’ll pay a 0.5% fee or $500, whichever is higher.

In addition to that cost, there may be seller closing costs and other costs that are specific to each property.

That is the only fee you pay, however. There is no ongoing or monthly fee. It is also possible to sell properties on the marketplace, which has a higher fee of 3%.

Which Markets Are Included?

The answer to this question depends on the type of property you are seeking. For example, Roofstock currently only has properties in the United States but is looking to expand its reach.

Other parts of the world do have investment property marketplaces, but they tend to focus more on commercial investments.

For example, those interested in the European market can browse properties on Consorto.

Another option is a new marketplace, Juwai.asia, which has properties all over the world. That includes the US, UK, Asia, and more.

Despite all of the recent developments around real estate investments, don’t forget the old mainstays. Craigslist, Realtor.com, Trulia, and other websites may have investment properties for sale as well.

Final Thoughts

If you’re looking for an easier way to invest in real estate but don’t want to go the REIT or crowdfunding route, this could be the right option for you.

Investment property marketplaces give you the opportunity to buy properties almost anywhere without ever seeing them.

That’s because they handle everything for you – finding a property manager, financing, and insurance. Many of the properties are already occupied, so you don’t even have to worry about finding tenants.

I would recommend this option to anyone who wants to start investing in real estate. It takes much of the hassle away, and that is more than worth the small fee.