Mashvisor’s investment property calculator is essential for real estate investors to perform thorough real estate market analysis and guarantee successful real estate investments. In the past, real estate investors had to conduct a great deal of research and collect a lot of data so that they could calculate the rate of return on investment and make proper analysis of potential investment properties.
However, with the help of advanced technologies, the way real estate investors perform market analysis has also become more advanced. Nowadays, to calculate the rate of return, real estate investors simply use an investment property calculator.
In this blog, we’ll discuss a specific calculator and how you can use it to estimate your rate of return on investment, and that is Mashvisor’s investment property calculator.
Why You Should Use Mashvisor’s Investment Property Calculator
Mashvisor’s investment property calculator is an application or a real estate tool that enables actual and interested real estate investors to search for investment properties online. You don’t have to hire a real estate agent to find you an investing bargain; you can do that on your own with a click of a button using Mashvisor’s investment property calculator, which gives you access to real estate market analysis, neighborhood insight, comparisons between different real estate investments properties, and even more.
Typically, the main disadvantage of an investment property calculator is that it might be pricey. However, Mashvisor’s investment property calculator is affordable and easily accessible from any place at any time, as well as fast. Most importantly, it provides real estate investors with the most accurate results possible and minimizes the risk of miscalculation, which makes decision making a lot easier
The best part is that it calculates and predicts the rate of return of any potential investment property that is listed on the website, based on the input provided by the user. Mashvisor’s investment property calculator computes various real estate metrics and evaluates whether or not a property is a good investment opportunity. Another benefit of this real estate tool is the function of comparing various real estate properties simultaneously. In this way, the realtor can fully understand the pros and cons of each one and choose the best real estate investments.
Key Calculations Provided by Mashvisor’s Investment Property Calculator
Cash Flow:
Cash flow is a very simple but important real estate metric. Basically, the cash flow of investment properties is the difference between the monthly income generated by the investment minus the monthly expenses associated with it.
In order to generate a high rate of return on investment, it is important to own positive cash flow properties. Having negative cash flow (when the expenses exceed the profits) indicates that you’re not earning a good rate of return on investment, which makes the real estate investment a bad one.
Consequently, the cash flow analysis is an extremely important metric to estimate when choosing the best real estate investments. Mashvisor’s investment property calculator offers real estate investors cash flow details after all the numbers have been added.
Capitalization Rate:
The capitalization rate (or cap rate) estimates the real estate investor’s return on investment properties that are paid for all in cash. To calculate cap rate, we divide the net operating income (NOI) by the market value (purchase price) of the investment property.
For example, if the NOI is $10,000, and the market value of the property is $100,000, the cap rate would be 10%. In general, if the cap rate is below 10%, real estate investors are not advised to invest in that income property.
Mashvisor’s investment property calculator allows real estate investors to use the cap rate metric for various reasons besides estimating the rate of return on investment such as: searching for the best real estate investments; calculating the market value of an investment property; determining how much to charge for rent; etc.
Cash on Cash Return:
Cash on cash return (or CoC, for short) is a popular metric used in real estate transactions as it calculates the rate of return on investment properties that are paid for with a loan – which is what most real estate investors opt for.
The cash on cash return equals the net operating income (NOI) divided by the total cash actually invested in the real estate property. For example, if a real estate investor’s annual NOI for an investment property was $15,000, and the investor had put down $60,000 as a down payment, then the cash on cash return will calculate the rate of return on investment in relation to the down payment only, which would be 25%.
Real estate experts disagree on what is a good cash on cash return. Some say that anything in the range 8-12% is good, while others recommend going for investment properties that promise cash on cash return of at least 20% to assure good profitability.
Needless to say, cash on cash return is an essential real estate metric that Mashvisor’s investment property calculator provides for estimating the rate of return on investment properties, and conducting investment property analysis to evaluate whether the investment will be profitable or not. Moreover, cash on cash return allows for a comparison between different real estate investments, and also to measure and evaluate real estate investments’ long-term performance.
Unique Features of Mashvisor’s Investment Property Calculator
Now, if you’re still wondering what makes Mashvisor’s investment property calculator special, the answer is that Mashvisor’s investment property calculator does not only calculate the finances of your investment properties in the form of cash flow, cap rate, and cash on cash return. It offers way more than this.
Neighborhood Analysis:
Mashvisor’s investment property calculator gives detailed analysis about the chosen neighborhood for investment. Moreover, the Mashmeter tool shows real estate investors whether investing in a particular neighborhood is a good investment decision or not.
Investment Property Analysis:
This feature allows realtors to be more interactive with Mashvisor’s investment property calculator. It does not only provide real estate investors with insightful information about specific properties but also allows investors to enter estimated numbers and understand their potential rate of return on investment.
Optimal Rental Strategy:
Not only does Mashvisor’s investment property calculator provide valuable information, such as Airbnb occupancy rates, but it also gives advice about the optimal rental strategy. This tool shows real estate investors a comparison between the potential of the property as an Airbnb rental and a traditional rental, as choosing the optimal rental strategy is key for success in the real estate investing business.
Advanced Financial Analysis:
Last but not least, Mashvisor’s investment property calculator allows you to select the financing method for your investment property. Thus, if you finance your real estate investments through a mortgage, the tool lets you enter your down payment, loan type, and loan amount as well as interest rate. This certainly gives real estate investors more precise cash flow analysis and provides a better understanding of the rate of return on investment.
The Bottom Line
Using an investment property calculator is the ultimate way to understand the potential of any real estate investment property.
Mashvisor’s investment property calculator is your own personal guide to real estate investing. It allows you to estimate your potential rate of return on investment and find the best real estate investment property based on your input and financial situation. Now, with a click of a button, you can become your own realtor, accountant, and financier.
So, are you still looking for the best real estate investment property calculator? Look no further; Mashvisor’s investment property calculator is the right place for you!
So, if you’re following this series of blogs concerning the rate of return on investment (click here if you’re not, it will lead you to the very first blog of the series), by now you should be able to understand what the rate of return is, its types, and how to calculate it. The next question you should be asking now is “What is a good rate of return?”. Click here to find the answer.