I had problems installing data.table for R version 3.5.0, and was advised to check that RTools was properly installed.
After installing RTools 3.5 (this seems to be
UPDATE
The utility find_rtools has been moved to the package pkgbuild (as noted in devtools News). The function pkgbuild::find_rtools() correctly discovers Rtools 3.5 in my system.
Old answer
I had this same problem and it occurs because devtools has not been updated to consider the newest version of RTools (3.5). Here is an easy fix that should work while they update the package:
# add missing RTools 3.5 info
v_i = devtools:::version_info
v_i[["3.5"]] = v_i[["3.4"]]
v_i[["3.5"]]$version_max = "3.5.99"
assignInNamespace(x = "version_info",
value = v_i,
ns = "devtools")
# now find_rtools should work properly
devtools::find_rtools()
Of course, this approach assumes that devtools::find_rtools worked for you before updating R and RTools. If this is not the case, then you might have a faulty installation and/or PATH variable as others have mentioned.