How to Find a Good Investment Property

So, you want to buy a good investment property. But how?

There are so many steps involved in purchasing an investment property, and any real estate investor knows that making a mistake at any phase of the investment property analysis and search can be costly. Knowing how to find a good investment property is the difference between a profitable real estate investing business and a huge money pit.

Fortunately, there is a surefire way to approach the investment property search process successfully. The most successful real estate investors are using trustworthy data and predictive analytics to help them find and analyze potential investments.

The best part? Using real estate investment software allows you to streamline your processes. This means you save time, energy, and the headache of using real estate investment spreadsheets and making tedious calculations manually.

Let’s take a look at some of the most important real estate investment tools to help you find good investment properties:

Use the Best Software for Your Neighborhood Market Analysis

The first step in finding a good investment property is analyzing markets. This is a costly step to overlook. While you might be tempted to either buy locally or go off of recommendations to find “hot” real estate markets, data speaks volumes.

If you’re wondering how to access data on real estate markets, you’ll be happy to learn it’s much easier than you think. To help you understand what neighborhoods make for top-performing rental markets, you’ll need to use software called a real estate heatmap. In the US housing market, this tool will be more important than ever, as markets that have been historically “hot” have cooled, while some unexpected markets have been heating up.

A real estate heatmap will help you find a good investment property by visually displaying neighborhood data. You will quickly be able to tell which neighborhoods in a real estate market are performing well based on intuitive color coding. For example, Mashvisor’s real estate heatmap displays four different filters (or data displays):

Listing price
Cash on cash return
Rental income
Aribnb occupancy rate

How to Find a Good Investment Property with the Mashvisor Real Estate Heatmap — Use Mashvisor’s Real Estate Heatmap to Find Good Neighborhoods for Investing

Seeing listing prices in an area will help you determine if you can afford a particular neighborhood. A good investment property for one investor may not be a good investment property for another, and you should be able to comfortably afford your investment.

Cash on cash return will show you how great a return you will get back back on your investment. You want to find neighborhoods that show both a high rental income and a good cash on cash return, so you can make the most profit. Lastly, if you’re in the short-term rental property business, you will need to find locations with a high Airbnb occupancy rate in order to keep your units full.

Carefully Consider Your Investment Property Search Tools

When it comes to searching for individual investment properties for sale, keep in mind that not every website to find investment property for sale is created equal. In fact, many free websites contain unavailable listings, outdated real estate and rental information, and inaccurate profitability estimates.

The best investment property databases will pull large amounts of online data from trustworthy sources. Like Mashvisor’s investment property finder, it will also make use of machine-learning algorithms and predictive analytics. This means the database is using AI to deliver the best possible property data and analysis to you based on patterns.

Using state of the art real estate databases is one of the quickest and easiest ways to find a good investment property. With Mashvisor’s Property Finder, you can search via your own criteria, such as:

Listing price
Number of bedrooms/bathrooms
Location
Budget
Rental strategy

Our database will serve you the most relevant and profitable matches to the filters you set, saving you tons of time when searching for a good investment property.

Search for My Investment Property

Invest in Software for Finding Off Market Properties

Sometimes, the best properties on the market simply aren’t on the market yet! Having a real estate database for finding properties on the market is essential, but it’s not the only way to find a good investment property.

With the potential increase in foreclosures and bank-owned properties once the foreclosure moratorium expires, this could be more true than ever. In our current state of low inventory, most investors will be going after the same few properties on the market. This can cause an increase in competition and drive prices up.

The solution? Mashvisor’s Property Marketplace is a real estate investment tool that helps investors search for off market properties. Good investment property comes in all forms, so try not to limit yourself to MLS properties and listings from mainstream sources. You might be surprised that off market properties can be hidden gems for real estate investors.

Buy an Investment Property Calculator

Once you locate the perfect neighborhood and find a good investment property in it, your work is done, right? Not so fast!

Many investors skip this next crucial step in their property search: rental property analysis. Just like you must analyze a neighborhood, you must also analyze individual properties. While it might seem unlikely, there’s always the possibility of finding that one not-so-great property in the middle of a good neighborhood.

The traditional way of analyzing investment properties includes gathering rental comps, filling out real estate investment analysis spreadsheets, and making long-hand calculations to find the estimated return on investment. With real estate investment software, however, finding a good investment property has never been easier.

Once again, Mashvisor offers a rental property calculator that does the work for you. For any property you find in our database (as well as for any property for which you enter the address), we provide the following information automatically:

Rental comps
Estimated expenses
Rental occupancy rate
Cash on cash return
Cash flow
Cap rate
Projected rental income
Long-term return on investment forecast

In addition, Mashvisor’s calculator provides both traditional and Airbnb analytics. It is best to look at different real estate investment strategies in order to determine which is most profitable in a particular market and for a specific property. For instance, a property you had intended for renting short term might actually perform better with a traditional strategy. Without a calculator that can compare, you will have a harder time choosing the right rental strategy. And a good investment property with a bad strategy is a waste of an investor’s time and money.

Another important aspect of a good rental property calculator is an interactive capability. This means being able to adjust its results based on custom information specific to the investor. For example, Mashvisor’s investment property calculator allows you to account for your mortgage, down payment, and purchase price as well as any other number that you feel needs adjusting. Finding a good investment property means accounting for data specific to your circumstances, and it’s important to have the tools to do this.